Naver’s Commerce Engine Is Firing — But Why Is GMV Falling?
The first quarter of 2025 marked the debut of performance metrics for Naver’s new AI-powered shopping app, Naver Plus Store. While Naver delivered strong revenue growth across commerce segments, one key figure told a more complex story: gross merchandise volume (GMV) showed only modest growth year-over-year and declined from the previous quarter. What’s really driving the performance of Naver’s commerce play?
1️⃣ Point of View | What’s Changed
Revenue surged, but GMV stumbled — Naver’s commerce growth looks two-faced.
Naver's AI-based personalization engine and platform integration strategy produced double-digit growth in commerce revenue, including ads, memberships, and transactions. However, GMV — the total value of goods sold — rose only 4.9% YoY and declined QoQ, revealing a disconnect between monetization and actual commerce volume.
2️⃣ Inside the Move | Strategy and Execution
① AI-Powered Commerce Architecture
AdBoost AI system: record-high ad revenue thanks to automated bidding, keyword generation, and audience targeting.
Enhanced product discovery via personalized recommendations in the Plus Store app, leveraging Smart Store data.
② Membership Lock-in & Logistics Expansion
Naver Plus Membership users were 26 percentage points more active on the app than on web.
Rebranded N Delivery improved ETA segmentation (same-day, early morning, weekend) and expanded delivery coverage by 90% YoY.
③ Strategic Partnership with Kurly
Launch of a joint service with Kurly in H2 2025 to enhance fresh food offerings.
Positioning Naver as a player in the fast-growing online grocery segment, previously dominated by Coupang and Kurly.
3️⃣ Business Playbook | Strategic Roadmap
| Focus Area | Execution | Goal |
|---|---|---|
| AI Transformation | AdBoost, personalization UX | Maximize ad efficiency, conversion |
| Member Engagement | Expand Plus benefits, faster delivery | Boost LTV and retention |
| Grocery Expansion | Kurly partnership | Capture food category shoppers |
| Traffic Diversification | Dual platform strategy (web + app) | Grow traffic without cannibalization |
4️⃣ Market Impact | What This Means
Revenue up, but fewer goods sold: Q1 commerce ad revenue hit a record ₩308.3B (+16.4% YoY), yet total GMV declined QoQ to ₩12.8T.
Off-platform GMV decline dragged growth: While on-platform GMV rose 10.1% YoY, total GMV only grew 4.9% — implying a decline in affiliate/partner mall sales.
Seller dissatisfaction grows: Complaints emerged about search visibility favoring big-budget brands, calling into question Naver's long-standing “mutual growth” brand narrative.
5️⃣ Competitor Matrix | Naver vs. Coupang vs. Kurly
| Metric | Naver | Coupang | Kurly |
|---|---|---|---|
| GMV (Q1 2025) | ₩12.8T (+4.9% YoY) | Not disclosed | ₩844.3B (+15% YoY) |
| Commerce Revenue | ₩787.9B (+12% YoY) | ₩11.5T (record high) | ₩580.7B (+8% YoY) |
| Operating Profit | Not disclosed | ₩233.7B (+340% YoY) | ₩1.76B (first black figure) |
| Key Strategy | AI, membership, Kurly partnership | Rocket Delivery dominance | Premium fresh food, cost optimization |
| AI Capabilities | AdBoost, smart targeting | Limited | Undisclosed |
6️⃣ Beyond the Numbers | Signals and Risk Factors
Ad revenue vs. GMV mismatch: If increased ad spending doesn’t lead to proportional GMV growth, sellers may pull back.
Trust gap among sellers: Complaints from SMB sellers point to a growing perception that “only deep-pocketed brands succeed.”
Sustainability of AI strategy: Long-term performance hinges not only on technology but on ecosystem inclusivity.
7️⃣ Summary Insight | Key Takeaways
Naver’s commerce arm is monetizing effectively, thanks to AI-enhanced ad systems and membership-based retention.
But overall GMV growth remains modest and even declined QoQ — undercutting the “growth” story at its foundation.
Partner mall transaction volume appears to be shrinking, exposing the vulnerability of Naver’s two-pronged marketplace model.
Rival Coupang hit record revenue and profit, and Kurly turned a profit for the first time, indicating intensifying pressure.
For Naver to become a true counterweight to Coupang, it must not only build powerful tech but also win back the trust of its sellers.