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- After many challenges, Shina Chung, the new CEO of Kakao, made her first official appearance to disclose the company's performance. Her direction for Kakao this year is to focus on the 'essence'. Here, the essence of Kakao refers to its origin, the mobile messenger 'KakaoTalk'. More specifically, it focuses on the value of 'connecting relationships' created by KakaoTalk. This may sound somewhat superficial. We have organized what exactly Shina Chung means by the business direction Kakao intends to pursue in 2024.
- The reason Kakao focuses on the 'essence' of KakaoTalk is clear. It is believed to aid both growth and profitability. In fact, Kakao's core businesses based on KakaoTalk, advertising, and commerce, have both faced a macroeconomic stagnation over the past year. Despite this, these two businesses, focused on the essence, have robustly contributed to Kakao's performance. Detailed numbers are provided.
- You might wonder what the connection between the advertising business and the 'connection of relationships' based on KakaoTalk means. It becomes clear once you understand that Kakao sees not just ordinary users who use KakaoTalk as a messenger but also 'corporate customers' as another important group of users. Kakao aims to create touchpoints for these corporate customers to connect with their clients, based on KakaoTalk. The methods are explained.
- The same goes for the commerce business. Despite the immense challenge of the onslaught from Chinese platforms, Kakao Commerce believes the impact has been minimal and instead sees it as an opportunity. The reasons, along with the methods Kakao wants to employ in 2024 to enhance the 'context of relationships' based on KakaoTalk, are disclosed.
CHAPTER 1
What is the Essence of Kakao?
“This year, Kakao is marking a new beginning focused on business improvement and regaining trust, shifting from the expansion-driven management strategy that has been pursued up to now to concentrate on the essence of Kakao,” Shina Chung, the newly appointed CEO of Kakao, recently stated at the Q1 2024 earnings call.
Here, the essence of Kakao directly refers to its origin, the mobile messenger ‘KakaoTalk’. More specifically, it connects with the reasons you, the many readers of this article, might think of for using KakaoTalk. Indeed, all of us could, if we chose, delete KakaoTalk right now and install and use another messenger app. However, there are clearly reasons we do not (or cannot) do that.
We use KakaoTalk simply because it is the mobile messenger that everyone we know uses. While I occasionally receive business proposals via Facebook and Instagram DMs, get content curation from someone on Telegram, and chat with foreign friends on LINE, the reason I inevitably use KakaoTalk as my main mobile messenger is that it is the only platform that allows me to connect with everyone without needing any further explanation. It is no exaggeration to call it an app used by all of South Korea, given the convenience created by its massive traffic.
The perspectives of KakaoTalk users and CEO Shina Chung's view on the essence of KakaoTalk align closely. According to CEO Chung, the essence of KakaoTalk is 'connecting relationships'. This includes not only existing relationships with family, friends, and colleagues but also the potential to connect with people previously unknown.
In essence, KakaoTalk started as a 'messenger' service, connecting numerous relationships. With the vast user traffic, nearly equivalent to the population of South Korea, it has expanded into various businesses like commerce, content, and finance. This year, under the leadership of CEO Shina Chung, Kakao plans to focus on strengthening the platform asset of 'KakaoTalk' and the user experience represented by 'messaging'.