SEOUL, Korea, April 25, 2014 (Korea Bizwire) – As Kakao transformed itself into a mobile commerce company officially, a tectonic change is afoot in the mobile commerce industry.
Recently, Korea On-Line Shopping Association (KOLSA) approved Kakao, the provider of Korea’s largest mobile messenger service KakaoTalk, as its new member. As KOLSA is an umbrella group for online shopping companies including major e-commerce companies and their service providers, the April 23 approval of Kakao as its member means mobile commerce is incorporated into the business of mainstream e-commerce.
With the membership of KOLSA, Kakao which promoted its business identity as a mobile commerce company will strike the new sources of income besides the KakaoTalk-related games and set up a platform encompassing all the segments of the mobile commerce industry.
Until now, Kakao has steadily prepared for mobile commerce. By the “Sending Gift” menu in KakaoTalk, it grew the pie of mobile gift cards from 100 billion won in 2011 to a 500 billion won market in 2013. Also, its KakaoStyle has provided mobile channels to SoHo fashion shops to sell their goods.
Kakao plans to terminate all the partnerships with existing “Sending Gift”-affiliated companies by June and directly engage in the business. It will also advance into the brick-and-mortar retail market in partnership with Hyundai Department Store.
In addition, it will roll out a “bank wallet” service during the first half of this year that enables money transfers among KakaoTalk friends with help from the Korea Financial Telecommunications and Clearing Institute and embed its own payment solution in the KakaoTalk app. Through these efforts, KakaoTalk can offer communications, commerce and money transfer services at once.
Kakao’s advance into the e-commerce market spooks so many incumbent operators because they already experienced the destructive power of KakaoTalk with some 400 million members worldwide expanding its market share in communications and its social network service, KakaoStory.
Kakao is preparing to go public next year. Its corporate value is estimated at 3.3 trillion won. A KOLSA official said, “Kakao is a pioneer in Korea’s mobile commerce market. Kakao’s appearance in the e-commerce market will expand the market share drastically.”
By John Choi (firstname.lastname@example.org)