Shinsegae-Naver alliance to sell local-themed meal kits as first collaboration

Shinsegae Group and Naver Corp. have jointly devised their first retail business model in about four months after their long-term business agreement in March.

Shinsegae’s supermarket chain E-mart Inc. said on July 19 that the “local-themed meal kit” will mark the first collaboration with Naver since its large-scale share swap with the tech company in March to rival Coupang in e-commerce.

E-mart will commercialize and mass-produce some of the popular food items currently sold on Naver’s Food Window, a platform that sells products of local farmers and meals of famous local restaurants in small-scale, limited quantities.

Naver said that the commercialization of local food products into convenient meal kits will allow the local businesses to significantly ramp up sales. With the ongoing pandemic, the sales of meal kits in Korea have been growing rapidly. According to E-mart, its meal kit sales in the first half of 2021 increased by a striking 229.4% from the same period last year.

E-mart said its Peacock Product Development Team will be in charge of reviewing and implementing the commercialization initiative. Peacock, launched in 2013, is E-mart’s own brand in the home meal replacement (HMR) sector.

“Our Peacock brand has accumulated a long track record of success in commercializing the food created by famous restaurants across Korea into convenient meal kits,” said E-mart.

FURTHER STRENGTHENING OF RETAIL NETWORK

E-mart will also enter Naver Shopping, the largest online shopping platform in Korea, within this year. This means that Korean consumers, who must currently use Shinsegae Group’s SSG.COM platform to order E-mart products online, can use Naver to buy E-mart groceries. Naver has a monthly active user base of 40 million, about 10 times that of SSG.COM.

While Naver boasts an online platform with the largest amount of transactions last year at 28 trillion won ($24.3 billion), fresh food and groceries have been its areas of weakness. But by strengthening its partnership with E-mart, the largest supermarket chain in Korea, Naver will be able to take over some of the shares held by other fresh food players such as Market Kurly and Coupang.  

Naver and Shinsegae Group will further strengthen their partnership in logistics and product distribution. Naver, which lacks its own logistics system, will be able to take advantage of Shinsegae Group’s strong logistics network across the country to challenge Coupang. Shinsegae has one of the largest logistics networks in Korea with more than 7,300 offline distribution channels.

“We are in discussion with Naver on new investments in logistics. We will expand the partnership into other areas such as retail technology and membership integration,” said a Shinsegae official.

Write to Han-shin Park at phs@hankyung.com
Daniel Cho edited this article