South Korean tech giant Naver is ramping up its competitiveness and aiming to boost profitability by developing a wide range of AI-powered services, from personalized shopping and rapid delivery to enhanced search capabilities.
On Nov. 11, Naver held its annual conference, “DAN 24,” at COEX in Seoul, unveiling a suite of AI-powered services. These new offerings prominently feature HyperCLOVA X, Naver’s proprietary large language model (LLM), initially introduced in August last year, which is now being integrated into consumer-facing services as part of Naver’s AI strategy called “On-Service AI.”
Naver CEO Choi Soo-yeon highlighted the company’s efforts over the past year, explaining that the company has thoroughly tested its generative AI products and services through internal and closed market tests, as well as commercialization phases. She emphasized the company’s goal of becoming the leading expert in AI understanding and application in S. Korea.
Among the latest AI services, Naver’s shopping feature is particularly attention-grabbing. The company announced a new app, “Naver Plus Store,” slated for release in the first half of next year, which aims to support personalized shopping experiences through AI.
For instance, if a soon-to-be mother regularly explores baby products, the app will automatically recommend the most-discussed baby items on Naver’s widely used online community for mothers. It can even find discount coupons that vendors issue for loyal customers. Lee Yoon-sook, head of Naver’s shopping business division, noted, “Our goal was to move beyond traditional shopping, where users simply search for specific items. Instead, we wanted to create an AI-driven experience that proactively identifies users’ needs and provides personalized recommendations.”
To further strengthen its shopping services, Naver announced plans to revamp its logistics and delivery offerings next year. Instead of merely recommending logistics providers to sellers, Naver will now directly partner with logistics companies to offer faster delivery options, including an on-demand delivery service that brings products to customers immediately after ordering, as well as a dawn delivery service that ensures items arrive by early morning, similar to Coupang’s “Dawn Delivery.”
A tech industry source commented, “Once Naver establishes a comprehensive delivery service, competition with Coupang in the e-commerce market will intensify.”
Naver also plans to upgrade its search engine in the first half of next year. With the AI-enhanced system, users searching a keyword or phrase will receive a curated overview of related content. For example, a search for a national park will yield not only the location map and website information but also concise details on entrance fees, operating hours, nearby restaurant recommendations, and blog reviews, all organized on one screen.
Choi Jae-ho, head of Naver’s Discovery and Exploration Product Unit, said, “This feature will enhance the accuracy by curating the most relevant content, reducing issues like AI hallucinations, which is when AI responds with incorrect information as if it were accurate.”
Naver, the first South Korean company to develop and release a foundational generative AI LLM, has yet to differentiate its technology and profitability from overseas tech giants.
Naver’s stock, once priced at around 400,000 won ($285.50) in early 2022, has since dropped to approximately $121.34. Global tech leaders like OpenAI, Google, and Meta are positioned as formidable players in the AI field, thanks to substantial capital backing, which often gives them a performance advantage.
OpenAI’s recently launched “ChatGPT Search” service, for instance, now covers Korean news, emerging as a notable competitor in the Korean search market. Naver’s domestic market share, which once neared 80% a decade ago, now hovers around 60%.
Facing challenges in competing directly with global tech giants, Naver has pivoted to specialize its AI services across diverse business sectors, aiming to carve out its niche in the competitive AI landscape.
