[INTERVIEW] How Naver plans to challenge Facebook on its U.S. home turf

Tech

Published: 27 Dec. 2023, 06:00

[INTERVIEW] How Naver plans to challenge Facebook on its U.S. home turf

Naver Band CEO Chae Yoon-ji [NAVER]

A myriad of social networking services (SNS) exist in the world, but not many of them purposefully serve group-based communication.

That includes not only chatting and sharing photos with select number of users, but also sharing calendars to organize meetups, collecting RSVPs and sending out notices within a group.

Naver Band has been working to fill that opening in the market for the past 11 years: the platform now has 18 million monthly active users in Korea.

And the tech giant has taken this success abroad.

Naver Band established a U.S. entity in 2014 and now has around 5 million monthly active users in the country, compared to just 700,000 in 2017. That's no easy feat in a country where SNS goliaths like Instagram still dominate.

Services like Meta's Instagram and Messenger do offer group chats where photos and other media can be shared, but Naver Band's identity centers around group communication, and it serves the purpose more faithfully, said Naver Band CEO Chae Yoon-ji in a recent Zoom interview with the Korea JoongAng Daily.

“Facebook and Instagram's group chats are like renting out a room at a very noisy building, whereas Naver Band is like having an entire building to ourselves,” said Chae who oversees' Naver Band's U.S. business.

“There is actually a big difference between a service that has group-tailored functions and a service that is entirely made for groups.”

Market research

Naver Band's U.S. success did not come by chance; it was a result of thorough market research.

“We looked into the U.S. market to find out which group is managed in an organized way and found out that students were involved in at least one after-school or extracurricular activity. We decided to target that market first,” Chae said.

“We estimated that there are some 40 million people in the United States who are engaged in at least one extracurricular activity, such as sports clubs. Then we expanded the pie to other organized groups such as churches, volunteer activities, offices and so on.”

To that end, Naver ended up offering controlled and organized group chats to the U.S. market where a leader — such as a coach or a teacher — can manage the rest of the members.

“Since American user base for the Band were more 'official' groups compared to Korea, they wanted to differentiate the authorizations given to the 'leader' and the 'members',” Chae said.

“For example, there were requests to disallow members — or students — to chat by themselves in case of cyberbullying. So we added such function as well as disallowing the members to leave comments or upload posts. With members' consent, the leader can also download the chat log from the member users.”

U.S.-tailored functions

RSVP etiquette, which is almost nonexistent in Korea but is pervasive in the United States, also factored in.

“Even if you are just attending a friend's birthday party, an RSVP is required. So we added a new function to Band where you can put in how many friends are tagging along with you when replying to the RSVP.”

Band's RSVP system will make group gatherings easier to organize, Chae said, as it's more convenient to check than email is and makes for quicker replies.

While an app for organized group activities may appear to have a somewhat narrow constituency, Chae believes there are many untouched opportunities ahead.

“One might think we are after a niche market, but we see it differently,” she said. “More than 80 percent of Americans are engaged in extracurricular activities, and that includes not only students ranging from kindergarten to highschoolers, but also their parents. It technically covers nearly all of the United States. Home schooling is another opportunity we see growth in.”

Naver Band is banking on a “member to leader” strategy — it hopes that its members will introduce the service to other groups they are involved in. Parents, for example, might introduce it to their workplaces.

“We see this strategy as significantly important to taking the service to the next level after securing monthly active users of 5 million,” says Chae.

A screenshot of a "Varsity Girls" group on Naver Band [NAVER]

Naver's January acquisition of the U.S.-based secondhand fashion marketplace Poshmark could help Band grow as well.

“We are in the early stage of discussing on how to create synergy with Poshmark, since both of us are based in California,” Chae said.

“The trade of secondhand items is a natural step when people of similar interests gather, such as trading sports equipment when a season is finished. I think a win-win model can be made with, Band supporting group-based communications while Poshmark utilizes its experience in customer-to-customer transactions.”

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]