The South Korean digital insurer Carrot has formed an exclusive partnership with Naver Financial Corp to provide exclusive supply shipment return insurance to merchants using Naver’s online retail platform.
Based in Seoul, Carrot was launched following a JV partnership with big-name investors, including Hanwha, SK Telecom, Hyundai Motor Group, Altos Ventures, and Stic Investments.
The agreement will now see Carrot collaborating with Smart Store - South Korea’s biggest ecommerce marketplace in terms of transaction volume. The digital insurer will compensate for the cost of return shipping and handling of merchandise, and the insurance product has been specifically tailored to provide flexibility to both the marketplace, shoppers and vendors.
The move follows on from Carrot’s strategic partnership with 11th Street - Carrot anticipates that the concept of integration of insurance services into e-commerce transaction will expand to other "ecosystem partners". 11th Street, the second biggest retail and open-market platform of Korea, which has rolled out Carrot's shipping return cover in 2020 and has plans to promote wider adoption of the service to bolster vendor profitability, according to the firm.
Embedded insurance cover at the point of sale by Carrot
According to reports, sellers who buy the cover are predicted to increase their revenue through added marketing value because the online customers are given an additional service in the event of them wanting to return or exchange the purchased items.
In a pilot scheme for the insurance service, data revealed resounding success has been recorded over the four months during late 2021. This confirmed the success of Carrot's business model.
An increase in customer adoption of digital insurance cover
Vendors who implemented the coverage reported 15% jump in sales volume while also recording a 31% increase in average revenue. Customers have also responded positively with a surge in demand for the insurance to cover more shopping categories being observed.
Speaking of the recent partnership announcement, Paul Jung, CEO of Carrot explained, "We are excited to be working alongside with Naver. We share Naver's vision of innovating on behalf of clients, and the launch of this service is one way we address customers' pressing needs. We are distinctively positioned to develop and deliver digital insurance solution to Naver that will broaden access to small online business owners and help them grow and protect their businesses."
He added, "We look forward to continually introduce series of platform integrated solutions through our long-lasting partnership."