SEOUL -- South Korea's internet giant Naver is in talks to form a capital alliance with retailer Emart to counter the meteoric rise of Coupang, the e-commerce leader that made a blockbuster IPO in New York last week.
Naver and Emart are in the final stages of negotiations to acquire each other's stake with an investment of hundreds of millions of dollars each. An agreement may be reached as early as this week.
Naver, whose group members include the Line messaging app, wants to beef up its shopping catalog by tapping Emart's fresh produce purchasing and shipping know-how. For its part, Emart seeks to boost its appeal to shoppers with Naver's services that range from a namesake search engine to a payment app.
The partnership talks come amid the rapid growth of Coupang, which has gained fans with its "rocket" shipping that delivers orders within 24 hours through its own logistics web. Backed by Japan's SoftBank Group, Coupang posted a 91% surge in sales on the year for 2020. Often called the Amazon.com of South Korea, the company raised $4.6 billion in its initial public offering on the New York Stock Exchange last week and vowed to bolster its delivery network.
Absent such in-house shipping prowess, Naver relies on an external partner, buying a stake in leading shipper CJ Logistics last October. The tie-up with Emart will broaden Naver's lineup of fresh food, which will bring in frequent shoppers. But competition is heating up in this area, as Coupang is also adding facilities for shipping refrigerated goods.
South Korea's e-commerce industry is undergoing a shakeup. Third-place eBay Korea is up for grabs as U.S. parent eBay has decided to offload the unit. Retail giant Lotte Group has shown interest in the auction platform, as has chat app Kakao.