NAVER D-Commerce Report 2021
NAVER D-Commerce Report 2021
D-Commerce Report 2021
NAVER D-Commerce Report is published annually to provide insights into online entrepreneurs and the digital business ecosystem through data, and to explore opportunities for improving seller welfare. This year, we looked into how offline SMEs were able to overcome the COVID-19 crisis and scale-up through NAVER SmartStore in Part 1., and how NAVER ShoppingLIVE is enabling SME sellers enter and thrive in the live commerce market in Part 2.
Part 1. NAVER SmartStore, helping offline SMEs’ digital business expansion and growth
Part 1 of D-Commerce Report 2021 used seller survey and analyzed data to find out how offline sellers overcame the COVID-19 crisis and scaled-up through NAVER SmartStore and to measure the impact of the SmartStore platform on seller satisfaction and sales growth.
75.5% of offline SMEs experienced sales growth after joining NAVER SmartStore
According to survey, offline SMEs experienced 5% decreases in offline sales in the first half of 2020 due to COVID-19, but also experienced 15% online sales growth through NAVER SmartStore, thereby offsetting the offline sales drops through digital transformation. In addition, 75.5% of sellers that participated in the survey experienced sales growth after expanding their operations online, with 16% of sellers experiencing 50% or more sales increases.
Sales channel and consumer diversification, employment growth and various scale-up effects of digital expansion
The study also found that more than 90% of offline SMEs that digitally expanded their businesses experienced customer base growth and consistent annual employment growth. NAVER SmartStore also confirmed its role as a stepping stone for digitally starting and growing a business, as 80.9% of survey participants answered they started a digital business for the first time through NAVER SmartStore. 70% of multi-homing sellers answered they expanded their businesses to other online platforms within two years, confirming NAVER as an effective technology platform for digitally starting and growing a business.
Professor Choi Boreum of University of Seoul, who led the study, stated, “Digital transformation, which has risen as an imminent social challenge during the pandemic, has been proven to be a necessary element of growth for offline SMEs, especially given the high share of self-employed businesses in Korea’s economic structure.” She continued, “More offline SMEs will be able to stably achieve digital business expansion and growth in the future by utilizing NAVER services and support programs that enable innovative growth of SMEs.”
Part 2. ShoppingLIVE, a new sales tool for SMEs
Part 2 of D-Commerce Report 2021 studied how ShoppingLIVE contributes to performance growth of sellers and how it lowers the live commerce entry barrier for SMEs. Business implications for ShoppingLIVE sellers were also provided, including factors that affect seller performance on ShoppingLIVE.
Sales volume increased by 49% and sales grew by 48% after streaming on ShoppingLIVE
Stores that used ShoppingLIVE performed substantially better than those that did not use it in terms of sales. While the former experienced an average growth rate of 49% and 48% in sales volume and sales respectively between before and after livestreaming, the latter experienced sales volume and sales growth rates of 7% and 16% respectively.
ShoppingLIVE also contributed to marketing, such as acquisition of regular customers. The average growth rates in the number of ‘bookmarks + subscription to store news’ and visitors for stores that used ShoppingLIVE were 128% and 47% respectively, while stores that did not use ShoppingLIVE experienced much lower growth rates.
ShoppingLIVE’s growth effect was three times more amplified for SME sellers
The aforementioned growth effect of ShoppingLIVE was more amplified for smaller scale stores. For example, sales growth after participating in ShoppingLIVE for SMEs was much greater than for large scale stores. ShoppingLIVE’s sales growth effect was 1,575% for SMEs, which was approximately three times greater than that of non-SMEs(531%). ShoppingLIVE’s marketing effect, such as its contribution to acquiring regular customers, was also greater for SMEs. While ‘bookmarks + subscription to store news’ grew 3,292% for SMEs, it only grew 1,464% for non-SMEs. The growth rate of store visitors for SMEs and non-SMEs were 1,343% and 506% respectively. These performance improvements were more amplified for SMEs compared to non-SMEs in measures of long-term performance as well, measured by changes in non-live sales volume, sales, and visitor.
Promotions using comments and hearts, introducing a diverse range of products, and setting livestream alerts positively affected ShoppingLIVE performance
Finally, the following implications were derived after analyzing other factors that affect the sales performance of ShoppingLIVE. 1) ShoppingLIVE effects strengthen when customer participation increases, such as an increase in views, comments, and hearts. 2) Not only sales but also customer interest increases when various products are introduced during the livestreaming. 3) ShoppingLIVE effects become larger as more customers receive livestream alerts. Sellers can expect to boost ShoppingLIVE’s performance by properly applying these implications in their sales strategies.
Sungkyunkwan University Professor Jiyoung Kim, who conducted the research, stated, “Live commerce, which combines the strengths of offline and online commerce and social media, is rapidly growing as it provides Korean sellers who are suffering from the COVID-19 crisis with a new opportunity.” He said, “In particular, the results of empirical analysis confirmed the significant marketing effect of NAVER ShoppingLIVE, an open live commerce platform, on SME sales growth and customer acquisition. Sellers can maximize ShoppingLIVE’s sales support effect by properly using NAVER’s support programs such as the free seller education and studio rental programs along with various sales strategies such as promotions that draw customer participation in comments and hearts, introducing a diverse range of products, and setting livestream alerts.”