South Korea’s internet giant Naver Corp.’s commerce business in Japan is expected to gain a boost from enhanced ties between its online shopping platform solution SmartStore and PayPay, the largest QR code-based payment provider in the neighboring country.
According to sources on Thursday, Z Holdings, which was formed by a merger between Naver’s chat platform company Line and SoftBank’s Yahoo Japan, announced during a Wednesday conference call discussing the company’s April-June results that it will add MySmartStore to PayPay merchants to promote digital transformation. This means that Naver will allow PayPay merchants to use the MySmartStore solution to help them build e-commerce sites.
MySmartStore is the Japanese version of Naver’s flagship e-commerce platform SmartStore in Korea. Naver launched MySmartStore in Japan last October, marking its e-commerce business expansion in the global market.
PayPay, the No. 1 mobile payment platform in Japan, started its payment service in 2018 and has 48.65 million subscribers on a cumulative basis as of June, with the total payment volume reaching 4.9 trillion yen ($36.5 billion) at the end of last year. The number of PayPay merchants is 3.74 million nationwide.
With the introduction of MySmartStore by PayPay merchants, both PayPay merchants and MySmartStore vendors are expected to increase, and this should benefit Z Holdings in the growth of overall e-commerce sales, Z Holdings said.
Naver’s access to PayPay merchants is led by Z Holdings’ decision to incorporate PayPay as its subsidiary. Z Holdings and Softbank decided to form an intermediate holding company named B Holdings and will put PayPay under the holding company from October. This change is expected to boost Naver’s Japanese commerce business.
Analysts say that Naver needs new growth momentum for its commerce business after it gave in to Coupang and dropped to No. 2 in the Korean e-commerce market last year amid a slow growth of the entire e-commerce market in the post-Covid world.
By Lim Young-shin and Minu Kim
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