NAVER CFO Kim Namsun’s interview with Kindred Media on <NAVER’s diversified business model and strategy>
NAVER CFO Kim Namsun’s interview with Kindred Media on <NAVER’s diversified business model and strategy>
In May 2023, in an interview with Kindred Media, CFO Kim Namsun talked about NAVER's diversified business model and business-specific strategies, including the acquisition of Poshmark. Kindred Media is the outlet run by LionTree, the U.S. investment firm that served as financial advisor to NAVER at the time of the Poshmark acquisition. Here are some excerpts from the interview.
Q. Starting as a search engine in 1999, NAVER was listed in 2002. Since then, the company has been expanding into a variety of fields, such as content, advertising, commerce, fintech, and AI.
NAVER's businesses may be seemingly disparate, but they're actually organically intertwined. In the late 90s when the search market was at an immature stage of development, it was hard to find content written in Korean on the web. That's why we created UGC services, and connected them to our search engine when we forayed into commerce, such as webtoons, news, and fashion. As part of our commerce business, we also launched payment business to encourage participation on the NAVER platform, by enhancing shopping experiences among users.
Q. What opportunities does NAVER have in commerce?
South Korea has always been considered a leader in the field of IT. Korean users swiftly adapt to mobile environments and are exposed to a wide range of content. Thus, we strive to make it easier for users to buy and sell products through AI-based recommendation tools to satisfy their high standards.
Q. Why did NAVER acquire Poshmark to enter the global *re-commerce market?
*Re-commerce: secondhand market
First of all, many experts predict that the secondhand fashion business will achieve remarkable growth in the medium and long term. Secondhand fashion platforms also do not see much difference in terms of behavior patterns among Korean and U.S. users. Strong search technology is a prerequisite for enhanced profitability of secondhand deals, which are difficult to scale up. We believe that NAVER's search-enabled advertising can bolster this search technology.
With its most active users compared to other platforms, Poshmark secured highly competitive community commerce. It had the potential to expand into the luxury category, and weathered the storm of COVID-19 pandemic. That's why we were convinced that Poshmark would become a platform with a robust global re-commerce service.
Q. Can you elaborate on how webtoons have become such a successful platform in the U.S. and what your future plans are?
Webtoons were initially aimed at providing content to users to increase engagement time on our platform. Now, this has become a platform where amateur creators showcase their work, and then connect with global readers, who will in turn become their ardent fans. By allowing anyone with a story to serialize and make money, webtoons have democratized publishing and creation.
We believe NAVER's future role is to provide creators with necessary tools, and create an environment where they can unleash their infinite capabilities to show off their creative work. As a platform with the largest collection of contemporary literature in a graphic novel format, webtoons are equipped with creators of various genres producing new content every week.
Furthermore, webtoon-based IPs have been reborn in a variety of ways, including feature films and Netflix drama series, some of which have become a huge success. The demand for new and original work will continue to grow, and we intend to produce many different types of content in cooperation with a huge number of creators.
Q. There has been a huge interest in ChatGPT in the U.S. over the past few months. Undoubtedly, generative AI will greatly affect search experiences in the future.
With an increasing demand for personalized search results, generative AI is completely changing the search landscape.
The rapidly evolving AI is both fascinating and unsettling, and it also provides diverse opportunities at the same time. To keep up with these changes, NAVER launched HyperCLOVA in 2001, the world's third-largest language model (LLM) centered on mother tongues. In 2023, we successfully rolled out its upgraded model, HyperCLOVA X.
Q. What's NAVER's strategy in the Korean cloud market, and how do you plan to expand in AI?
NAVER Cloud plans to focus on familiar markets, such as Korea and Japan, as well as markets where we can provide value from the perspective of enterprise customers.
When enterprise customers using Big Tech's cloud services are located in countries far away from the U.S., such as Korea and Japan, they often left to their own devices in the event of a problem. On the other hand, NAVER understands the needs of enterprise customers in the Korean and Japanese markets, and is well aware of each country's cultures and circumstances. That's why we can provide localized and customized services without relying on our infrastructure size.
Just as we have successfully provided search and commerce tailored to Korean and Japanese users, we plan to apply our experiences and know-how to large language models (LLMs) to create customized AI (from the perspective of soverign AI) based on local languages and cultures in cooperation with many countries and companies.
Q. What are NAVER's next goals and what are your plans as CFO?
NAVER is pursuing transformations as we expand into global markets. Considering that users in Korea and the U.S. share similar experiences on the Internet, especially on mobile devices, which gives us a glimpse of huge potential, we have been seeking investments and acquisitions in content and commerce. Our future plans include concentrating on integrating NAVER's assets and strengthening our businesses organically ●
▶︎ Check out the video for the full conversation!
