Naver acquires US fashion marketplace Poshmark for $1.6 billion

The Korea Times

The Korea Times

Business

Sat, September 23, 2023 | 16:06

Tech

Naver acquires US fashion marketplace Poshmark for $1.6 billion

Posted : 2022-10-04 16:58

Updated : 2022-10-05 15:45

Choi Soo-yeon, CEO of Naver, speaks during a press conference at the company's headquarters in Seongnam, Gyeonggi Province, April 13. The company said Tuesday that it acquired U.S.-based fashion marketplace company Poshmark for $1.6 billion. Courtesy of Naver

By Baek Byung-yeul

Naver acquired U.S.-based fashion marketplace operator Poshmark for $1.6 billion, Korea's top internet search portal said Tuesday. It was the largest acquisition deal so far for the Korean tech giant.

Poshmark is the largest consumer-to-consumer (C2C) company in North America that operates an e-commerce marketplace where people can buy and sell new and secondhand apparel and other products. It has attracted over 80 million users since its establishment in 2011.

Naver said it decided to buy the Silicon Valley-based company due to its unrivaled business model that utilizes a strong community network. It added that the two sides agreed to create greater synergy based on similar business visions, such as a deep understanding of the values and consumption patterns of the young generation and heavy investments to improve technological capabilities.

With the acquisition, Naver plans to gain a solid foothold in the fast-growing vertical platform business, which refers to a specialized mall that only deals with specific products. The vertical platform has become a new type of gathering place for young consumers, serving as a community and gathering place among sellers with strong influence and people who follow such influencers.

"We judged Poshmark to be a new type of commerce that does business based on individual communication and community activities," Choi Soo-yeon, CEO of Naver, said during an online press conference. "We will try to establish a new retail model called community-type commerce."

The CEO added, "Poshmark will be able to advance into the Asian market using Naver as a bridgehead. If Poshmark's C2C business model becomes more sophisticated by cooperating with Naver, this business model can also be applied to other regions and increase in size and synergy."

Choi said Poshmark's service can also collaborate with Naver's other services such as metaverse platform Zepeto and web-novel platform Wattpad.

Despite the massive acquisition deal, Naver's stock price fell by 8.79 percent to end at 176,500 won, Tuesday, the lowest since February 2020, because investors perceived the deal to be overpriced at a time when the global economy continues to face uncertainties.

But when asked whether the tech giant paid too much for the acquisition, Kim Nam-sun, CFO of Naver, said the U.S. company was purchased at a reasonable price.

"We think the acquisition price is low. The value of Poshmark went up to $7 billion when it was listed on the stock market," he said.

"Despite the deterioration of the global economy, I think the C2C market is still solid. I think the market can grow by 20 percent a year," he added.

baekby@koreatimes.co.kr