South Korea’s two ecommerce giants Naver Corp. and Coupang Inc. may partner for a crack at the Japanese market after Softbank Group, the biggest shareholder in Coupang and business partner with Naver, revealed plans to bring Coupang service to Japan.

Reuters on Monday quoted Masayoshi Son, founder and chief executive of Japan’s SoftBank Group Corp., the biggest shareholder in Coupang, as saying that its domestic internet business Z Holdings is in talks with Coupang “about bringing its services to Japan.”

Naver’s Japanese messaging app operator Line Corp. and internet portal Yahoo Japan finalized their merger earlier this month and placed them under a single holding entity Z Holdings. Should Coupang make entry overseas through Z Holdings, Naver and Coupang, two biggest rivals in Korea’s e-commerce market, may work hand in hand in Japan, world’s fourth-biggest online marketplace after China, the United States, and the United Kingdom.

According to Japan’s Ministry of Economy, Trade and Industry, Japan’s business-to-consumer e-commerce market amounted to 19.36 trillion yen in 2019. The market has posted nearly 10 percent growth every year over the past 10 years but experts still see growth potential as its supply ratio remains significantly low.

The Covid-19 pandemic has offered an opportunity to Japan’s e-commerce market for growth as consumers are highly seeking home deliveries and online purchases such as for video contents and books.

Japan is considered a potential market for Naver and Coupang also because of the purchase power held by senior citizens.

The ecommerce market Japan is dominated by Amazon.com, followed by Rakuten, Yahoo Shopping, and Qoo10 Japan.

Yahoo Japan, owned by SoftBank Group, lags far behind Amazon and Rakuten. Z Holdings, operator of Yahoo Japan, joined hands with Naver, parent company of Line, last year, and announced management integration.

The two created A Holdings as the holding company of Z Holdings on a 50:50 ownership between Naver and SoftBank. A Holdings owns 65 percent of Z Holdings which owns 100 percent of Line and Yahoo Japan.

The first business strategy sought by Z Holdings that absorbed Line involves e-commerce. It plans to introduce Naver’s Smart Store solution in Japan. The blog-type shopping mall solution, which allows small vendors to register and sell items online, was launched in 2018 in Korea. The number of subscribers that made payments reached over 20 million last year.

Z Holdings plans to introduce Smart Store solution as an optimized tool that allows Japanese vendors to sell products online.

In June, the company will introduce a messenger commerce that integrates Line with 80 million users in Japan and Smart Store.

It is also seeking a partnership business model integrating Yahoo Shopping, Yahoo portal, and PayPay.

The plan could gain more drive when Softbank brings on Coupang. SoftBank Vision Fund, run by Son, is the largest shareholder of Coupang with 33.1 percent ownership.

Unlike Naver, Coupang differentiated itself with direct delivery service. Thanks to fast delivery, main delivery items are daily necessities including groceries.

Industry analysts noted that Z Holdings could go two-track – offer non-grocery items such as fashion goods through Smart Store solution and groceries through Coupang.

Shares of Coupang on New York Stock Exchange closed 5.43 percent higher at $45.9 on Monday.

Naver shares closed up 1.21 percent at 376,500 won ($332) on Tuesday.

By Lee Dong-in and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]