Naver and Kakao Clash with Similar Services but Different Strategies | Be Korea-savvy

Naver and Kakao Clash with Similar Services but Different Strategies


Korean internet giants Naver and Kakao are battling to take the lead in O2O (online to offline) businesses. (Image : Screen Capture of Naver and Kakao)

Korean internet giants Naver and Kakao are battling to take the lead in O2O (online to offline) businesses. (Image : Screen Capture of Naver and Kakao)

SEOUL, April 11 (Korea Bizwire)Korean internet giants Naver and Kakao are battling to take the lead in O2O (online to offline) businesses.

Due to a limited number of different kinds of business opportunities to tackle in the IT industry, the projects laid out by the two companies are often in conflict. However, since the two companies each have their own way of developing new products and services, much attention is being drawn towards the battle of the tech giants.

According to IT industry sources, Naver and Kakao are clashing in business sectors such as payment services, navigation, hair shops, call taxis and shopping services.

Competition is especially fierce in payment services, as it could be the core foundation of future O2O services.

Competition is especially fierce in payment services, as it could be the core foundation of future O2O services. (Image : Yonhap)

Competition is especially fierce in payment services, as it could be the core foundation of future O2O services. (Image : Yonhap)

In September 2015, Kakao launched KakaoPay, opening the door to a new era of payment services. With seven million current subscribers, KakaoPay still faces stiff competition from Naver Pay and Samsung Pay. Naver launched Naver Pay in June 2015. Through its powerful platform Naver, the company has secured over 15 million subscribers. The two companies recently launched check cards, which offer discounts and the chance to accumulate reward points.

Competition is especially fierce in payment services, as it could be the core foundation of future O2O services. (Image : Yonhap)

Competition is especially fierce in payment services, as it could be the core foundation of future O2O services. (Image : Yonhap)

The hair salon industry is another focus of competition.

Kakao will launch its Kakao Hairshop service during the first half of the year. The application allows users to find and make reservations at hair salons, and even pay for their appointments. To compete with the service, Naver also plans to add a ‘hair and beauty’ category on its portal site, providing a similar service.

 Transportation might be the area where competition between the two companies is the fiercest. (Image : Yonhap)


Transportation might be the area where competition between the two companies is the fiercest. (Image : Yonhap)

Transportation might be the area where competition between the two companies is the fiercest. Kakao, which successfully launched KakaoTaxi, acquired the navigation app ‘Kimgisa’ and turned it into KakaoNavi in February. The chauffeur service platform KakaoDriver is expected to be launched during the first half of the year.

 Transportation might be the area where competition between the two companies is the fiercest. (Image : Yonhap)


Transportation might be the area where competition between the two companies is the fiercest. (Image : Yonhap)

In addition, Kakao will update Seoul Bus, an application that provides information on bus routes and arrival times in 11 major cities. The app Subway Navigation will be reborn as KakaoSubway, and will feature location-based services. Daum Maps will also see a name change, to KakaoMap.

To compete against Kakao, Naver has added call taxi and navigation features to its Naver Map service.

Although the services of the two companies are similar, the companies have different strategies.

Naver’s new offerings are focused on increasing the influence of the Naver portal, with the goal of prolonging the amount of time users spend at the site. Instead of generating profits from each new service, Naver hopes to boost traffic by offering users the opportunity to search, select services, shop and pay all at one place. Naver’s aim is to increase advertising earnings through higher site traffic.

Naver’s new offerings are focused on increasing the influence of the Naver portal, with the goal of prolonging the amount of time users spend at the site. (Image : Yonhap)

Naver’s new offerings are focused on increasing the influence of the Naver portal, with the goal of prolonging the amount of time users spend at the site. (Image : Yonhap)

However, Kakao is focusing on ‘speed’ and ‘immediacy’, as the company is already home to the KakaoTalk messenger service, which is used by the majority of the Korean population. Instead of offering search services, Kakao helps users to select services through its apps and the web. As a result, Kakao Hairshop, KakaoTaxi and KakaoDriver are provided through separate applications.

Industry officials comment that it is difficult to predict which company will come out on top, as it is uncertain which features will be more attractive to users.

By Francine Jung (francine.jung@kobizmedia.co.kr)

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