Kakao Corp. currently prepares to participate in the South Korean e-commerce sector. In particular, Kakao would be launching its e-commerce platform during this year’s second half. Over the recent years, Coupang Corp. and Naver Corp. have been leading the domestic e-commerce market.
Entering the Local E-commerce Scene
Notably, Kakao plans to charge zero commission rates and apply a direct-to-consumer (D2C) business model to its upcoming e-commerce platform. Kakao would also significantly cultivate the various online shopping companies on its existing services by adopting the previously mentioned measures.
As part of its e-commerce venture, Kakao would incorporate accumulated data from more than 49 million monthly active KakaoTalk users. At present, KakaoTalk is South Korea’s most extensive messaging application. Furthermore, retail industry sources stated that Kakao would introduce its e-commerce platform sometime in July.
Before revealing its new e-commerce platform launch, Kakao had collaborated with market-leading manufacturers with extensive know-how in their respective sectors. Some of the companies Kakao consulted include LG Household & Healthcare, Maeil Dairies Co., Samsung Electronics Co., and Yuhan-Kimberly Ltd.
Creating Partnerships
Kakao reached out to these companies, encouraging them to expand their digital shopping operations to Kakao’s new platform. Retail industry sources also said that Kakao conducted trial operations with various companies, including Kundal, Korean Air Lines, and Nike.
In May, a Kakao business unit, KakaoTalk Channel, collaborated with Kundal, a K-beauty startup that became an industry sensation. Last year, only four years after its establishment, Kundal recorded a 120 billion won ($108 million) revenue.
Kundal recently expressed concern over its heightening dependency on other e-commerce companies, including Coupang and Naver, regarding its increasing revenue. Due to its rising business concerns, Kundal took Kakao’s invitation to help foster its new online shopping services.
Kakao’s Competitive Edge
Moreover, Talk Channel 2.0, Kakao’s new e-commerce platform, would enable smaller companies to manage digital marketplaces using the KakaoTalk app. Kakao’s fellow market competitors charge a commission rate to sellers that use their online shopping platforms.
However, Kakao took a different approach with Talk Channel 2.0 by charging zero commissions. Kakao would also equip its new services with simple features, including seamless login and payment. Additionally, Kakao would share user and sales-related data with participating online companies on Talk Channel 2.0.
Thanks to the data-sharing operations, Kakao could give small companies more independence and control over their online businesses. Industry watchers also stated that previous Coupang and Naver affiliates had shown significant interest in the new Kakao e-commerce platform.
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