Industry News

Poshmark Acquisition by South Korean Giant Naver: A Leap Towards Global Expansion and Improved E-commerce Experience


In a surprising yet intriguing development, social marketplace Poshmark announced it had agreed to be acquired by South Korean internet conglomerate Naver, marking a significant shift in the global online retail landscape. The deal sets Poshmark’s enterprise value at $1.2 billion, with Naver purchasing all outstanding shares at $17.90 a share – a rate that is less than half of Poshmark’s initial public offering (IPO) value less than two years ago, but at a premium to its recent trading price.

Both companies expect the deal to close in the first quarter of 2023, subject to shareholder approval. Naver has already garnered voting and support agreements from stockholders representing 77% of Poshmark’s outstanding shares.

The cornerstone of the acquisition revolves around the integration of Poshmark’s discovery-based social shopping platform and its engaged community with Naver’s technological prowess. The objective is to uplift the e-commerce experience on a global scale, leveraging the strengths of both entities.

Naver, the operator of South Korea’s top search engine and the country’s largest e-commerce platform, brings to the table an impressive portfolio of digital businesses that span fintech, cloud services, and AI technology. It also boasts a robust community of bloggers and monthly users that leverage its online platforms, with its Shopping Live livestream shopping market grossing a hefty $25 billion in merchandise value last year.

According to Naver CEO Choi Soo-Yeon, the company’s technology in search, AI recommendation, and e-commerce tools are expected to catalyze the next phase of Poshmark’s global growth. Poshmark’s founder and CEO, Manish Chandra, reiterated this sentiment, highlighting Naver’s financial resources, cutting-edge technology capabilities, and dominance in the Asian market as critical factors in accelerating Poshmark’s growth, enhancing user experiences, and penetrating new, high-value markets.

Naver’s acquisition is anticipated to invigorate the live streaming capabilities within the Poshmark platform, transforming the shopping and selling experience and fortifying Poshmark’s community with improved social networking and engagement possibilities.

However, the deal has drawn mixed reactions from industry observers. David Bellinger and Michael Lesser, executive directors with MKM Partners, admitted to being somewhat baffled by Poshmark’s decision to sell itself. They have pointed out recent shortcomings in the Poshmark model and issues around driving sustained growth and profitability, compounded by changes to Apple’s privacy policies affecting Poshmark’s marketing capabilities.

Yet, despite these potential drawbacks, they believe the deal represents an opportunity to tap into a promising consumer concept still in its nascent stages and operating well below its full potential. This potential is inherently tied to the growth opportunities in online apparel resale, where Poshmark has established itself as a significant player.

The demand for resale has soared as consumers increasingly adopt more sustainable shopping practices and look for ways to save money on top brands. Poshmark, along with similar platforms like ThredUp, has capitalized on this trend and even welcomed brands to sell directly on its website.

In conclusion, the Naver-Poshmark deal, although raising eyebrows among some market observers, holds promise for both entities. For Poshmark, it presents an opportunity to overcome its recent hurdles and unlock its true growth potential. For Naver, it’s a chance to strengthen its global footprint, bringing its technological capabilities to a wider audience. As the global retail industry closely watches how this merger unfolds, the transaction could very well be a game-changer in the landscape of online apparel resale.