Namkoong Whon, right, CEO of Kakao, attends an online press conference together with Kim Sung-su, center, and Hong Eun-taek, co-heads of the company's Corporate Alignment Center, Wednesday. Courtesy of Kakao

Internet firm to use W300 bil. fund for small merchants, creators

By Baek Byung-yeul

Under its vision of "go beyond Korea," Kakao has pledged to generate 30 percent of its revenue abroad within the next three years, up from the current 10 percent, by utilizing its platforms, cultural content and intellectual property, top executives of the internet company said on Wednesday.

The operator of the country's top mobile messenger KakaoTalk also said it will use a 300 billion won ($246.2 million) group-wide fund for small business owners and content creators over the next five years as part of its moves to regain lost trust.

"Kakao aims to increase its share of overseas sales by 2025 to 30 percent from the current 10 percent," Kim Sung-su, head of the company's Corporate Alignment Center, said during an online press event. "By using our platform, content and intellectual property, we plan to secure a base area in each global market and intend to gradually expand our market share in those areas."

The press event featured Kakao CEO Namkoong Whon and Hong Eun-taek, co-head of the Corporate Alignment Center. Kakao launched the alignment center last January to oversee the environment, social and corporate governance (ESG) management of its affiliates and to serve as a control tower for the social role of Kakao Group.

To give more detail, Kim said that the company will keep focusing on the Japanese market where its online cartoon service operator Kakao Piccoma is taking the lead. Based on the competitiveness of its Piccoma platform, Kakao will pursue new businesses such as games, the metaverse and non-fungible tokens (NFT). Kakao Piccoma already acquired a controlling stake in Sakura Exchange BitCoin, a cryptocurrency exchange in Japan, April 1.

Piccoma's French unit will expand its business across Europe by offering Japanese comics and online cartoons from Korea, Japan and China. "Piccoma is continuing to grow as a leading player in the Japanese online comics market, posting record monthly transactions in January. It also started an official service in France in March, taking its first step toward the entire European market," Kim said.

Kakao Entertainment will expand its presence with its online comics and online novel businesses in the United States and Asian markets. In the U.S. market, the company aims to generate 500 billion won in transactions until 2024, taking advantage of the online comics and novel platforms it acquired in 2021, including Tapas, Radish and Wuxiaworld. Kakao Entertainment's music and media businesses are also targeting the global market by cultivating artists that can appeal to overseas fans.

"Kakao has various services, infrastructure and users but I thought the role of threads and needles that penetrate them was a little insufficient," Namkoong said. "During my term, I will try to connect our assets organically." Namkoong began his two-year term as CEO in March after being approved by the company's board meeting.

Hong, co-head of the alignment center, shared a plan of how to use 300 billion won for society. The company created the fund in September 2021 after being embroiled in a series of scandals, such as abusing its dominant market position to encroach upon the business of small merchants.

It plans to use 100 billion won over the next five years to help small businesses grow sustainably using digital technology, as well as providing 55 billion won to help digital content creators, 15 billion won for performing arts creators and 50 billion won for mobility platform workers.

"Achieving a win-win result is a key value for society and companies to continue their mutually sustainable growth," Hong said. "We will support small businesses to complete their digital transformation successfully and support our partners to make substantial profits."