Naver and SoftBank's A Holdings joint venture established
A Holdings, half owned by each, will oversee operations of Line and Yahoo Japan, which together have 150 million users.
Under the partnership, the two companies will invest 5.3 trillion won ($4.7 billion) over the next five years to develop artificial intelligence (AI) and utilize it in commerce, fintech and other fields.
A Holdings owns 65 percent of Z Holdings which owns 100 percent of Line and Yahoo Japan.
Line, which was a Japanese subsidiary of Naver, is the most used messenger app in Japan, with 86 million monthly active users. Yahoo Japan, a search portal subsidiary of SoftBank, is the second most used search portal in Japan after Google, with some 67 million users.
Lee Hae-jin, founder and global investment officer of Naver, and Ken Miyauchi, CEO of SoftBank, will serve as co-CEOs of the newly formed A Holdings.
Their first step under the partnership will be introducing Naver's Smart Store shopping platform in Japan within the first half of the year.
“With the rapid growth of Japan’s e-commerce business, Naver aims to provide e-commerce solutions through the Smart Store so that Japanese merchandisers can focus solely on their product development and business growth instead of launching online shopping malls and managing them,” Naver said in a release Monday.
Smart Store is an online shopping platform started by Naver in 2018 that helps small and midsize enterprises sell their products online without having to open their own online shops and provides them with free consumer data analysis.
Combining Line's messenger app and Yahoo Japan's shopping platform, Z Holdings will also introduce various e-commerce services, such as sending gifts through the chat room and giving bulk discounts.
Naver and SoftBank will also collaborate on fintech and public services.
By combining PayPay and Line Pay, mobile payment services run by the two companies, they will be able to expand their customer base. They are also in talks to integrate the QR and bar code payment formats of PayPay and Line Pay.
The digital transformation of public services, such as submitting civil complaints, receiving disaster-related notices, receiving virtual medical checkups and the delivery of medicine will also be made available under the partnership.
The start of the partnership comes one year and four months after Naver and SoftBank announced in 2019 that they would merge Z Holdings and Line to integrate their businesses.
At the time, SoftBank said that the cooperation is motivated by the fact that "particularly in the internet market, overseas companies, especially those based in the United States and China, are overwhelmingly dominant."
“[The merger will pursue] synergies in their respective business areas as well as implement business investment targeting growth in areas of AI, commerce, fintech, advertising and online-to-offline and other new business areas," the Japanese tech company said in a statement.
BY JIN EUN-SOO [firstname.lastname@example.org]