SEOUL -- South Korea's biggest web portal service operator Naver joined hands with BGF Retail, the operator of the domestic convenience franchise CU to create new services targeting both online and offline markets. They will create synergy using their expertise in online technologies and offline retail operations.
Naver said in a statement that the two companies would cooperate in the demonstration of various experimental online-to-offline (O2O) services, the application of technologies such as artificial intelligence and cloud, the establishment of technology-based next-generation convenience stores, and the development of win-win models for small and medium-sized companies.
"We will continue to carry out a variety of experiments to create new values in a rapidly-changing business environment where online and offline customer experiences are united," Naver CEO Han Sung-sook said at an online ceremony.
"We expect the synergy that will be created by organically merging our companies' top-notch competitiveness in a business management environment that is changing fast," BGF Retail CEO Lee Keon-jun said, adding that the partnership would provide maximized convenience and new values to CU customers.
Naver is one of South Korea's leading O2O service providers. The information technology giant has launched an online shopping mall service that connects offline businesses to online customers. Naver targets online shoppers that crave easy and quick services by connecting a keyword search service to its online shopping service. According to Wiseapp, an online market research firm, Naver was South Korea's biggest online shopping service operator in 2019.
Naver's online shopping service, Smart Store is a cash-back point system that is very generous compared to other shopping services. The service offers up to five percent of transactions in cash-like digital coins. Customers can use saved points for shopping or consuming Naver's digital content including dramas, films, music, and webtoons, also known as webcomics.
Naver also has Naver Pay, a digital wallet service that can be used at convenience stores and other shops. Customers at offline stores automatically receive shopping points. Young consumers prefer using Naver Pay at selected stores because of the reward system.
BGF Retail rolled out various experimental promotions targeting niche markets. In 2019, the convenience store chain collaborated with Lotte Chilsung Beverage, a beverage production wing of South Korea's Lotte Group, and Japanese toymaker BANDAI to release a limited-edition set of energy drinks and plastic robot model kits that garnered popularity among South Korean hobbyists.
CU released a subscription service for discount coupons in November 2020 to attract young consumers and single households who look for convenient and affordable shopping services. Its on-foot grocery delivery service targeting homebodies grounded due to the COVID-19 pandemic covers orders made within a one-kilometer radius from some 1,000 CU stores in Seoul.
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