Naver's shopping mall service 'Shop N' / Image from Naver

Many industry insiders pointed out that Naver's recent separation of its main business and shopping mall service 'Shop N' was aimed to strengthen its shopping business while avoiding any "unfair practice" controversy.

Naver's actions can be seen as attempts to calm the controversy over search manipulation of its shopping mall 'Shop N'.

According to industry on August 13, Naver will restructure its e-commerce division by splitting 'Shop N' into an independent division. 'Shop N' will be transferred from Naver's office building in Bundang to Gangnam in Seoul.

Back in March 2012, Naver opened Shop N, an open market service enabling users to create a shopping mall easily. Recently, Naver has caused controversy by exposing its Shop N partners much more than other open markets and malls. At the moment, Naver denied by saying, "Since search exposure follows the highly advanced search algorithms, there is no reason to preferentially treat specific shopping malls such as Shop N."

As strong doubts have been raised over Shop N's unfair practices, Naver came up with a restructuring plan to separate Shop N as an independent division. An official from Naver said, "There has been a misunderstanding about Shop N receiving special favor but now the misunderstanding will be reduced with restructuring. Being an independent division means its business potential has been recognized."

However, related industry sees the split of Shop N as another issue concerning Naver's monopoly. Shop N being an independent division will likely to be disadvantageous to those open markets and malls which are not Naver's partners. This is because Naver's shopping service system, so called 'floating fish cage', will force users to shop within its market only.

The industry pointed out that Naver's such action is not different from its previous action for real estate market. Back on August 7, Naver came up with a plan to stop providing its real estate information service. However, the company received criticism as it wasn't a practical proposal for co-existence.

In response to Naver's restructuring of Shop N, industry officials said, "It means Naver lowered itself by withdrawing its real estate business but won't give up its businesses that make money. If Shop N business expands, infringement in the online marketplace will become more controversial."