Naver, Shinsegae go all out to bring customers back after Coupang fee hike

Naver and Shinsegae Group are sharpening their marketing strategies in an apparent move to steal customers away from Coupang after the e-commerce giant took flak from shoppers for a decision to raise its membership fee, according to industry officials, Tuesday.

The two companies’ bolstered marketing campaigns are aimed at challenging the nation’s e-commerce market leader, Coupang, which raised its paid monthly membership fee for new users by 58 percent. Current users will also have to pay the increased fee from August.

In response, Coupang’s rival firms are going all-out to take advantage of Coupang’s latest decision, as a number of shoppers here complain over the abrupt membership price hike.

Naver, the nation’s dominant internet portal operator which also runs online commerce business, decided Monday to offer special free delivery benefits to Naver Plus Membership users for three months.

To woo more shoppers, the company is also running a promotional campaign for new users. Any customer without subscription records for the past six months will be able to receive the membership for free for three months. The paid membership service allows users to enjoy discounts when shopping or making reservations via Naver.

Industry officials, however, remained pessimistic over the possibility that such promotional campaigns would pose a serious threat to Coupang.

“More than 14 million paid membership subscribers of Coupang became accustomed to the firm’s ultra-fast Rocket Delivery service,” an official from a local e-commerce firm said on condition of anonymity. “It looks realistically tough for the firm’s rivals to seriously weaken Coupang’s strong customer lock-in effect with such marketing campaigns.”

Gmarket — an e-commerce firm operated by Shinsegae Group, also launched its muchhyped marketing campaign targeting sellers, ahead of its biggest shopping event — called Big Smile Day — which falls in May.

Any seller who joins the campaign will be able to receive free advertisements from the company. New sellers are also offered waived usage fees for four months when using the firm’s logistics centers to store goods.

Another official from a retail firm said chances appear slim for the existing players to regain their old glory again amid the toughening rivalry posed by Coupang and Chinese e-commerce firms.

“Most e-commerce firms here appear not to have any strong competitiveness for sustainable growth, and such one-shot promotion campaigns will not be able to create any game-changing effect to threat Coupang and the rapid rise of other Chinese e-commerce firms, such as AliExpress,” the official said.