Naver, Kurly form alliance to challenge Coupang in fresh food e-commerce
Under the partnership announced Friday, grocery delivery service Market Kurly's products will officially launch on Naver's artificial intelligence-powered shopping platform, Naver Plus Store, later this year.
For Naver, the move helps shore up a weak spot in the fresh food category, while Kurly, in return, gains access to Naver's vast user base as an expanded sales channel.
'Kurly and Naver have unique competitive strengths that other platforms can't easily replicate, making us ideal partners,' said Kurly CEO Sophie Kim.
'The new partnership with Kurly, known for its fresh food curation, will further enrich Naver's commerce ecosystem by attracting more users to experience quality service and high-grade products,' said Naver CEO Choi Soo-yeon.
As of last year, Naver and Coupang's estimated e-commerce transaction volumes stood at 50 trillion won ($35.1 billion) and 55 trillion won, respectively. Coupang, which first surpassed 1 trillion won in annual sales in 2015, has grown its business some 40-fold in just nine years.
Naver is doubling down on strengthening its shopping division — which accounts for roughly 27 percent of its total revenue — building on its strong foothold in categories like fashion, beauty and electronics.
In recent years, fresh food has emerged as a highly strategic category in the domestic e-commerce market due to its frequency of purchase and high repeat rates, which help build customer loyalty — a key driver of long-term platform growth.
Coupang currently dominates the next-day fresh food delivery market through its vertically integrated model, including Rocket Delivery and Rocket Fresh. Although Kurly was the first in Korea to launch such a service in 2015, Coupang's aggressive, capital-fueled expansion since 2018 has pushed it ahead.
Over the years, Naver has pursued an open-market strategy, partnering with retailers like E-mart Mall and Homeplus, and even forming a stock-swap alliance with Shinsegae. However, the lack of its own logistics network has limited its competitiveness in fast delivery. With Kurly's dawn delivery infrastructure, Naver now has a chance to fill that gap.
Industry watchers are also paying attention to whether the partnership could help reignite efforts for a Kurly initial public offering. Kurly passed a preliminary listing review in 2022, but reportedly shelved IPO plans the following year after failing to secure a valuation that met expectations.
Meanwhile, Korea's e-commerce landscape is heating up amid rising pressure from fast-expanding Chinese platforms. The estimated annual transaction volume for AliExpress and Temu combined reached 4.3 trillion won last year — an 85 percent increase from the previous year, according to WiseApp and Retail.
In response, traditional e-commerce companies in Korea are starting to seek out survival strategies. Shinsegae Group subsidiary Gmarket has announced plans to establish a joint venture with Alibaba International. The goal is to create a powerful new shopping platform by combining Shinsegae's strong domestic presence and brand trust with Alibaba Group's information technology capabilities.
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