Naver, SoftBank to launch A Holdings in Japan next month
Naver founder Lee Hae-jin speaking about his plan to enter American or European markets in the near future at the Naver Data Center “Gak” in Chuncheon, Gangwon Province, in July, 2020. Courtesy of Naver
By Kim Jae-heun
Local Internet giant Naver is accelerating its advancement in the global platform business in a partnership with SoftBank Group, the Japanese multinational conglomerate holding company, led by Masayoshi Son.
SoftBank, the largest shareholder of Yahoo Japan, said Wednesday during an extraordinary general meeting, that Line, a Japanese subsidiary of Naver, and itself will invest 50 percent each in shares to establish a joint venture named A Holdings. The venture will create a subsidiary, Z Holdings, under it to operate Line and Yahoo Japan starting from next month.
“The two companies will support the growth of Z Holdings' business though A Holdings. We will utilize our strength in each field to maximize the synergy we can create. SoftBank and Naver will strive to make a successful global company,” SoftBank said.
When the two Internet companies combine, with their management integration expected to be complete in mid-March, over 100 million users are estimated to visit the platform on a monthly basis.
Based on the mobile messenger application, Line, Z Holdings will run various businesses, including advertising, games, fin-tech, artificial intelligence (AI) and e-commerce. Here, Naver wants to test its AI technology in the Japanese market.
Naver founder Lee Hae-jin was originally said to have taken the chairman position on A Holdings' board, but he yielded it to SoftBank Mobile CEO Ken Miyauchi. Lee and Miyauchi will then take co-representative director positions. Lee offered his Japanese partner the position of chairman of the board to ensure better cooperation between the two companies.
A Holding will focus on businesses that utilize AI technology mainly in Asian markets, which is expected to spark competition with Korean firms that wish to operate platform businesses in the same region.
For example, Woowa Brothers, recently been acquired by Delivery Hero, will clash with Naver in the food delivery business in Japan. Woowa Brothers launched its food delivery player, Food Neko, there last October, and is currently competing with Demae-can, which Naver acquired 60 percent of in early 2020.
Woowa Brothers experienced failure in the business in 2014, when it launched a food delivery service in collaboration with Line. Back then, the food delivery business was not at all that popular in Japan. However, with increasing demand for the service due to the outbreak of COVID-19, Woowa Bothers decided to re-enter the Japanese market last year.
Woowa Brothers plans to expand its business in Southeast Asia, where A Holdings hopes to run various businesses, including a food delivery service.
However, Naver has the edge over Woowa Brothers, as the mobile messenger application of its subsidiary, Line, is widely used across Asia.