Naver says leadership change is under review

Naver CEO Han Seong-sook is expected to resign and accept a new post in Europe, after serving more than four years as the CEO. Korea Times file

IT giant sets eyes on overseas market amid tightening regulations

By Yi Whan-woo

Despite denials, sources and officials didn't rule out the possibility of the country's dominant web portal Naver replacing Han Seong-sook as its CEO amid the government's continued crackdown on big tech companies.

On Wednesday afternoon, Naver said reports that Han offered to resign from the top position were “groundless.” But the company added, “We're in the process of reviewing various scenarios.”

Because Naver is facing multiple challenges regarding the validity of its business structure, sources and officials involved with the issue said the company is inclined to appoint a younger chief executive.

“The essence of the company's management change is the naming of a younger new leader and letting that person handle the overhaul process,” Lee Hae-jin, Naver's founder and chief investment officer, said in a message to employees in June.

Investors said the government's tightening control over big tech companies will force Naver to constrain its corporate expansion. Naver and Kakao are the prime targets of lawmakers and government officials for their aggressive expansions into markets that overlap with mom-and-pop stores.

Overhaul

Officials and reports say the current CEO will be assigned to manage Naver's business strategies in Europe. The sources went on to say that the selection of Han's replacement would only mark the beginning of a leadership overhaul, possibly at the end of this year.

Naver is said to have formed a taskforce to come up with an ideal management structure centering on the reshuffle of its top four executives. The four are Han, Chief Financial Officer (CFO) Park Sang-jin, Chief Communication and Culture Officer (CCO) Chae Sun-joo and Chief Operating Officer (COO) Choi In-hyuk.

“The Naver board of directors reckon the four executives have been sparing no effort and made remarkable achievements,” said Board Chairman Byun Dae-gyu, who initiated the idea of launching a taskforce.

However, Byun said the company has grown too big and that the speed and complexity of its sprawling business structure have grown beyond the capacity of the four executives.

“Such challenges bring the need for an innovation-inspired working environment and faster communication channels through a new leadership structure,” Byun said.

Naver is anticipated to capitalize on its Smart Store service to expand into Europe's ecommerce market. Korea Times file

Naver invested 115 million euros ($133.4 million) in Wallapop, an online flea market based in Barcelona, Spain, in February. Han is expected to work at Naver's regional headquarters in Paris.

The Spanish startup grew rapidly during the COVID-19 pandemic and has more than 15 million users ― about half of Spain's internet population. It is also ranked No. 4 among the country's shopping apps.

“Naver is anticipated to make a winning move if it successfully capitalizes on its expertise as a search engine giant and platform operator,” a source said.

In particular, Naver already acquired valuable knowhow through operating Smart Store, a platform that provides fulfillment services, by packing and shipping products ordered online on behalf of many small and fragmented retailers.

Outside of Korea, Smart Store is available in Japan. Coincidentally, Han is scheduled to travel to Spain next month to join a conference to be hosted by the Spanish government. Naver has been invited to introduce Smart Store and other programs designed for joint prosperity with small- and medium-sized enterprises (SMEs.)