Platform Business in Korea: Advent and Growth of Kakao

Yoo-Jin Han,J Horák,T Lee,E Dolejšová

doi:10.1051/shsconf/202213202001

Abstract

With the rapid development of ICT technology, a platform business is exerting a dominant influence in various fields. This type of a business has a great ripple effect in that it creates value by engaging and connecting various market actors such as producers, suppliers, and business partners to the platform ecosystem, rather than directly selling independent products or services. In this vein, the current study introduces the emergence and growth process of Kakao, which has a monopolistic dominance in the Korean mobile messenger market, as an example of a platform business. This company started to be distributed to Korean consumers in 2010 and is currently exercising its market influence in various fields such as commerce, entertainment, finance, and transportation, and more growth is expected in the future. Based on the case investigation, the background of Kakao’s success can be interpreted with a combination of various reasons, such as Korea’s developed ICT environment, a large game users’ population, quick service launch, the strategy to utilize the founder’s previous work experience, and service development geared towards Korean consumers.

Highlights

In recent years, platform business strategies have gained massive interests in the academic fields but in the practical aspects[1,2,3,4,5]
The existing research with respect to Kakao shows the analysis of the growth process of Kakao Talk, motivation, and intention for continuous use, SNS mobile marketing services, the quality of mobile messenger interface design, and platform business and M&A strategies
On January 11, Kakao announced its acquisition of Loen Entertainment, which was famous for its music platform, Melon

Summary

Introduction

Platform business strategies have gained massive interests in the academic fields but in the practical aspects[1,2,3,4,5] In this ′′Big Wave′′ era, Kakao Talk has become a national communication channel in Korea since its emergence in 2010[6]. In terms of market capitalization, it ranked 3rd, followed by Naver, which has been dominating the Korean Internet market since the late 1990s This company has positioned itself as a leader in Korea’s mobile ecosystem by entering various areas, such as artificial intelligence, big data, internet of things, blockchain, and so on. The existing research with respect to Kakao shows the analysis of the growth process of Kakao Talk, motivation, and intention for continuous use, SNS mobile marketing services, the quality of mobile messenger interface design, and platform business and M&A strategies. The environmental characteristics of the Korean market that acted as the background of Kakao’s success must be analyzed to derive implications

Advent of Kakao

Growth of Kakao

Future of Kakao

Findings

Concluding Remarks