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Why are Naver and Kakao share prices rising when Coupang is listed on the US stock market?
This is due to the possibility that Coupang’s corporate value may be recognized in the US up to 55 trillion won. In fact, it can be seen that the share price has risen with the expectation that both Naver and Kakao, who operate e-commerce businesses as rivals to Coupang, will be valued as much.
It’s worth it, Naver and Kakao are no longer a company that lives only through portal ads or messenger. It is one of Korea’s leading e-commerce companies with a large number of subscribers and a content company represented by webtoons and web novels. They can open the CMA bank books and have made headway in the financial and securities industries that also offer loans.
In particular, the field of electronic commerce has grown remarkably. Last year, E-Best Investment & Securities estimated the amount of transactions in the e-commerce sector in Naver 27 trillion won, Coupang 22 trillion won, and Kakao 9 trillion won. In terms of profitability, Kakao was the highest with 25%, Naver with 16% and Coupang with -4%.
The fact that Naver Smart Store has more transactions than Coupang is the most significant measure showing that Korea’s leading portal has emerged as a leading national e-commerce company. Kakao’s gift service is very cost effective because it does not require additional advertising or distribution costs. They even enable “live streaming” to small and medium-sized businesses and provide more innovative services.
Naver and Kakao are gradually increasing their connection to offline stores, as well as collaboration with small business owners who opened their own stores. “Shopping”, “ordering” and “booking” services are gradually increasing. There is also an increasing use of the ‘Payment’ service that can be used in connection without connection.
It became natural that Coupang’s competitors were no longer offline-focused Lotte or Shinsegae, but Naver and Kakao. Naver’s efforts to create ‘Naver Membership’ and Kakao’s efforts to bolster monthly memberships like Talk Drawer and Emoticon Plus are an expression of confidence that it can survive with its own ecosystem.
Do you know that’s all there is? Naver and Kakao are also IT service companies. All provide voice recognition services as well as map services used throughout the country. We also provide certification services that can be used by public institutions or private sectors instead of accredited certificates.
You can take a taxi service or listen to music in Kakao. With Naver Real Estate, you can check real estate prices well and search for used car prices. You can even listen to the advice of legal or tax experts, or listen to audiobooks from famous singers. These services are not a profitable business at the moment, but they are also markets with great potential for the future.
It can be said that most of our lives we do in Naver and Kakao. We live searching Naver and communicating with friends on Kakao Messenger. It is convenient to live this way, so it is natural to open an account here and use other services. The moment it becomes the ‘must have’ that it should be the one it should be, not the ‘choice’ among several, the value of the company will shine through. Especially if there are no competitors. Naver and Kakao became “irreplaceable”.
The problem is, it all comes down to Naver or Kakao. I recently met an acquaintance in an industry and heard a voice of concern, “What if Naver or Kakao enter this field?”
Naver and Kakao entered the insurance industry, the used car market, and real estate with great ease. It was relatively easier for Naver and Kakao to converge between different types of companies, which other companies could not easily overcome due to regulations. It’s because customers want it and because its platform is more innovative than traditional providers. What remains in the end is your victory. It is common for the market to reorganize itself the moment a service is added to the Naver or Kakao menus.
It seems that the recent tight financial industry controls between Naver and Kakao aren’t just “keeping the rice bowl.” They fear the possibility that most services will be reorganized in Naver and Kakao. Naver and Kakao are likely to become a new standard (new normal).
If chaebol in the past formed a “league of their own” and led the Korean economy, now these Internet companies are also proud of their size. As Naver and Kakao launch into more and more new fields and have strong market power, it seems they must take on more responsibilities. Transparent management (ESG management), such as corporate social responsibility and improved corporate governance, has gained more attention and is now more urgent than ever.
Kakao President Kim Beom-soo recently promised to donate half of his property, which is seen as a conscious measure of the social responsibility of entrepreneurs. Naver was also actively involved in the government’s ‘Data Dam’ policy indirectly and decided to disclose its own data that is useful to small business owners (SMEs). To help current SME finance banks, we decided to settle 90% of the sale price more quickly. Both companies committed to working on the ethics of artificial intelligence (AI) in the society of the future. In the future, more attention should be paid to the Naver and Kakao social movements.
