NAVER D-Commerce Report 2022

Enhancing Diversity and Expanding the Ecosystem with SmartStore Seller Support

 

NAVER SmartStore: Expanding the E-commerce Ecosystem by Enhancing Diversity

SmartStore, as NAVER’s main technology platform, offers the opportunity for any and all young adult sellers, small and medium-sized enterprises (SMEs), and local businesses—even those without capital or technological know-how—to create a store and start selling online. In particular, SmartStore enables e-commerce sellers to focus on their business operations by providing tools and solutions for tasks ranging from store launch, product management, and marketing to order and payment, logistics, customer management, finance, business administration, and data analytics. Sellers can also participate in various programs that offer financing support, training, consulting, and studio rental services. 

 

 

NAVER’s advanced seller support system has helped attract diverse sellers to the SmartStore platform. As of December 2022, there are approximately 550,000 SmartStores, with product listings having increased 50% year-over-year, making SmartStore the most diverse e-commerce ecosystem in South Korea. Thanks to its diverse pool of sellers and products, SmartStore has been able to meet the various shopping needs of more than 30 million NAVER users through search and recommendation technology. As a result, SmartStore has grown rapidly at a 72% compound annual growth rate (CAGR) from 2015 to 2021.

 

 

 

‘D-Commerce Report 2022’ Fifth Edition: Analyzing the Effects of SmartStore Seller Support Solutions on Promoting Diversity and Expanding the Ecosystem 

Our empirical analysis confirms that SmartStore seller support solutions catalyze market entry of diverse sellers including young adult, small-town, small business sellers, enhancing seller diversity in the e-commerce market and driving both seller and market growth. 

 

 

 

SmartStore Seller Support Solutions: Helping Young Adult, Small-town, Small Business Sellers Grow  According to Korea University Professor Gunwoong Lee and his research team’s analysis, pro-seller solutions and services that NAVER has been steadily enhancing increase both seller diversity and overall market efficiency. Results show that as NAVER strengthens its business, financial, operations support services, the number of stores, merchandise value, and order volume of young adult (ages 10s to 30s), small-town (non-metropolitan), and small business sellers with annual sales of less than 300 million KRW increases relatively faster than non-young adult, large-city, large business sellers. 

 

 

In particular, as SmartStores of young adult, small-town, small business sellers reach more users, the total gross merchandise value and order volume of the entire market increase as well. The growth effects on GMV and order volume are, respectively, 2 to 3x and 2 to 5x, greater compared to that of non-young adult, large-city, large business sellers. This indicates that an increase in seller diversity drives market growth and efficiency.

 

 

These benefits also have a positive impact on individual store growth. Sellers using various business and financial seller support services experience 2.6x more gross merchandise value and 2.5x more order volume compared to sellers not using these services. In addition, young adult, small-town, small business sellers who use support services record 2.8 to 3.1x more orders and 2.8 to 3.0x more merchandise value compared to peer sellers that do not use these services. Given that the effects of seller support service use on gross merchandise value and order volume are 2.2 to 2.4x and 2.3 to 2.4x respectively for non-young adult, large-city, large business sellers, the positive effects of support service use on the overall market are more pronounced for young adult, small-city, small business sellers.

 

 

Regarding the results of the study, Professor Gunwoong Lee of Korea University notes that, “the introduction of support services and solutions for sellers has had a positive, long-term impact on increasing the diversity of sellers—including young adult, small-town, small business sellers—on the platform and helping diverse sellers thrive. This, in turn, provides customers with a wider choice of products and enhances market efficiency.”

 

 

Sellers Using Business/Financial/OperationsSupport Services Experience Up to 64% Increase in Sales and 6.3x Increase in Customers 

University of Seoul Professor Boreum Choi and her research team conducted in-depth interviews and a survey of sellers, asking them about their usage pattern and perceived benefits of seller support services. The results indicate that using business support services and solutions such as ShoppingLive, BizAdvisor analytics, CLOVA AI commerce solutions increases sales by an average of 64.3%. In fact, sellers most commonly used and were most satisfied with ‘store launch,’ ‘customer management,’ and ‘promotion tools’ in that order. Sellers using promotion tools such as Wishlist and News Alert coupons were able to expand their customer base by 6.3x compared to those not using these services. 

 

Sellers using financial support services such as Fast Settlement, SmartStore Business Loans, and Safe Return Care also experienced a 41.6% increase in sales. In particular, Fast Settlement helped sellers improve their cash flow and attract 2.4x more customers than sellers not using the service. 

 

The research team also found that the lower the digital literacy, the greater the tendency to employ AI commerce solutions. This suggests that NAVER’s goal of making new technology accessible to everyone as an everyday tool reflects the needs of ecosystem participants. Furthermore, sellers were also satisfied with product sales training, administrative training, and tech support training, in that order, which are offered by NAVER Business School and at NAVER Square. Sellers are highly satisfied, relative to usage, with the recently launched CLOVA LiveChat and NFA (NAVER Fulfillment Alliance) logistics services, both of which are expected to be frequently used in the future. 

 

Professor Choi notes that, “through multi-homing, sellers compare solutions and services of various platforms, from which they choose the platform that best suits their needs to stabilize and expand their business. In the current e-commerce market, which is undergoing an accelerated digital transformation, NAVER SmartStore has proven to be highly effective. NAVER’s objective of enabling sellers, even those with low digital literacy, to easily use AI technology and improve their digital capabilities will help enhance diversity in the overall ecosystem.”