Kakao, the company behind the popular KakaoTalk messaging app, is launching a distribution service in which products are manufactured after having been pre-ordered. The company’s goal is to prevent resources from being wasted, and help boost revenues for manufacturers with good ideas. (Image : Yonhap)
SEOUL, Feb.16 (Korea Bizwire) – Kakao, the company behind the popular KakaoTalk messaging app, is launching a distribution service in which products are manufactured after having been pre-ordered. The company’s goal is to prevent resources from being wasted, and help boost revenues for manufacturers with good ideas.
Kakao announced that it will start a service called ‘MAKERS with Kakao’ on February 16. The service will provide a mobile-order production platform that manages the manufacturing and distribution of products after orders are received from customers.
The new service is the first venture under the ‘Social Impact’ initiative suggested by Kim Bum-soo, the chairman of the board at Kakao, in 2014. ‘Social Impact’ programs seek to change prevalent systems in a certain field or society as a whole, and generate positive financial results through innovative ideas.
After setting up a Social Impact Team in April 2015, Kakao continuously planned out possible business models that could realize their intentions.
MAKERS with Kakao is available to 48 million Kakao users. Manufacturers present a sample product first, and start production after receiving orders from users.
This way, participating companies can cut down inventory, which takes up an average of 20 percent of the total production, by manufacturing orders above minimum order quantities. At the same time, customers can purchase quality products at costs that do not include stockpiling expenses.
Kakao officials comment that they came up with the business model to change the paradigm of the industrialization period that holds the problem of wasting resources due to mass production. In a mobile era, the companies is hoping to create a system that checks demand right away and systemizes production quantities.
Officials also added that they hope to support manufacturers in Seoul that are having a hard time after losing orders to Chinese and Southeast Asian factories by providing them with firm orders without having the risk of carrying excess inventory.
The items sold through MAKERS with Kakao will be changed every week. New products will be revealed online (http://makers.kakao.com) at 10 a.m. every Tuesday, and customers will be able to order the products during the following week.
Currently 12 brands, 10 artists, and seven manufacturers are participating. Bags, clothing, mugs, and Kakao Friends character items are expected to be presented.
Payments are made when the products are ordered, and products for which the number of orders has exceeded the minimum order quantity will be put into production. Payments can be made through Kakao Pay, credit cards, or mobile phone charges.
The payments will be forwarded to the manufacturers as soon as customers order the products to lessen the burden of initial production costs.
By M.H.Lee (mhlee@koreabizwire.com)
