Naver Webtoon to pursue profits with Yonder app launch in US

South Korea’s Naver Webtoon Corp. has been successful in the domestic market with its loyal subscribers willing to pay to read a diverse library of its fiction. But in overseas markets, the company is losing money.

In the second quarter, the digital comics and novel platform unit of the country’s top online portal Naver Corp. posted 18.3 billion won ($12.8 million) in profit from its Korean business. Globally, however, it remained in the red with a loss of 29.1 billion won.

Now the company plans to take its successful Korean business model abroad to turn it into a profitable enterprise globally.

Naver Webtoon said on Monday it will apply the business model from its Korean webtoon platform, which has a proven track record, to Yonder, a new serialized fiction app it recently launched in the US market.

Through Yonder, readers in North America can read curated high-quality Korean web novel hits such as The Remarried Empress and Marry My Husband, translated into English.

To feature exclusive new titles from bestselling authors on Yonder, the app has also partnered with leading North American publishers like Blackstone, Aethon, and Sterling and Stone.

By launching Yonder, Naver aims to create synergy with its sister app, Wattpad, a storytelling platform the Korean company acquired last year.

In January 2021, the top Korean portal operator said it was acquiring a 100% stake in Wattpad, the world's largest web novel platform based in Toronto, for $593 million to beef up storytelling content for its entertainment operations globally.

With 90 million monthly active users (MAU), Wattpad is an open platform where anyone can publish user-generated stories.

Just like Wattpad, the new platform, Yonder, also offers a free reading experience with several chapters of each story available for free before readers are offered the chance to unlock additional material using virtual coins, called “cookies,” and become paying subscribers.

SUCCESSFUL DOMESTIC PLATFORMS

The business model is similar to the ones operated by Naver’s domestic platforms.

Naver Webtoon runs the “Challenge Cartoon” platform where writers can post their own cartoons, while Naver Series operates the “Challenge League” platform for web novel amateurs. If titles produced by them prove popular, they are officially featured on Naver Webtoon and Naver Series for paid services.

In recent years, Naver has aggressively expanded abroad through acquisitions of rival webtoon platforms and service launches in target markets.

In Japan, it became the No. 1 webtoon provider in terms of transaction volume with the acquisition of eBOOK Initiative Japan Co. last October.

Naver Webtoon’s global expansion efforts paid off with over 180 million platform users and 406.5 billion won in transaction revenue in the second quarter.

But in most overseas markets, the company posted operating losses. In the US market, Naver Webtoon posted a 21.8 billion won loss in the second quarter. It ran a loss of 9.9 billion won in Japan.

To enhance its profitability abroad, the company said it is also acquiring Poshmark Inc., a US social e-commerce marketplace for new and secondhand styles for $1.6 billion.

Naver said it plans to enhance the collaboration between its entertainment and story businesses, including Webtoon, Wattpad and Yonder, and Poshmark’s e-commerce platform.

Write to Seung-Woo Lee at leeswoo@hankyung.com
In-Soo Nam edited this article.