Naver, former representative Han Seong-sook, is on the front line for Europe… In Kakao, Chairman Kim Bum-soo directly raised Naver and Kakao as mammoth-level personnel in attacking the global market side by side.
Naver had former CEO Han Seong-suk take over the European market as soon as he stepped down as CEO, and in Kakao, founder Kim Bum-soo resigned as chairman of the board and expressed his will to take charge of the global business. That said, it is a desperate moment to go beyond the domestic market to the global market.
Naver and Kakao have been knocking on overseas markets so far, so the direction is not much different, but this years move is unusual in terms of weight. As they have already established themselves in the domestic market, they are trying to advance overseas in various business fields to secure new growth engines.
Naver GIO Lee Hae-jin and Kakao Board Chairman Kim Beom-su. [Photo=Newsis, Kakao]
◆The representative and the chairman of the board of directors… Taking a look at overseas markets after retirement
According to industry sources on the 17th, Han Seong-suk, former CEO of Naver, was officially appointed as Navers European business development representative on the 14th. On the day of her retirement, she was appointed as the CEO, and she was given the position of general manager of the European market. In the future, former CEO Han is expected to travel back and forth between Korea, France and Spain.
Europe is an important market for Naver. Naver Webtoon has entered various European countries such as France and Germany, ranking first in sales of local webtoon apps. Last year, it focused on investing in local e-commerce companies by investing in Wallapop, the largest resell platform in Spain, and Bestiere, a luxury resell platform in France. The industry believes that Naver can lead Navers commerce business in Europe, given the precedent of former CEO Han growing his commerce business around smart stores during her tenure as CEO.
Hans actions are noteworthy in that they have similarities with global investment manager Hae-jin Hae, the founder of Naver, who resigned as chairman of the board of directors in 2017. GIO Lee resigned from the chairmanship of the board of directors in the process of experiencing controversy over designation of the then head in 2017, and also resigned as a registered director the following year. Since then, this GIO has focused on global investment and business, focusing on Navers global market penetration.
Z Holdings Co-CEO Kentaro Kawabe and Line CEO Takeshi Idezawa pose for a commemorative photo at a press conference held in Japan last year. Z Holdings is a subsidiary of A Holdings, a joint venture between Naver and Softbank. [Photo = Capture of Z Holdings press conference]
As this GIO focused on global business, Naver quickly began to show its presence abroad. A representative example is the establishment of a joint venture between Line, a subsidiary of SoftBank, and Yahoo Japan, a subsidiary of SoftBank, in partnership with SoftBank of Japan in 2020 to achieve management integration. Line, which had previously stood out in the Japanese market, laid a foothold in all directions with Softbank to target the Japanese market, including commerce, non-fungible tokens, and fintech. In addition, Naver Webtoons entry into countries and overseas transactions has steadily increased, and there have also been achievements such as several investments in promising overseas companies.
Kakao is also taking a similar step by emphasizing globalization. In particular, as Chairman Kim Bum-soo stepped down from his position to focus on targeting the global market, like Naver, the founder directly oversees overseas business. In a message sent to executives and employees on the 14th, Chairman Kim Bum-su emphasized that he had stepped down from the chairman of the Kakao Board of Directors and decided to shift the focus of work to the global expansion of the Kakao community for Beyond Korea.
Chairman Kim has rich experience in global business, especially in Japan. He established Hangame Japan in 2000 while he was working at NHN and successfully pioneered the Japanese market. Hangame once became the largest game portal in Japan. After Kakao was founded in 2010, he entered the Japanese market with KakaoTalk. Although it did not achieve great results at the time, he took on the role of an executive director of Kakao Piccoma from 2017 and re-challenged in Japan. Then, starting in 2020, the webtoon platform Piccoma gained great popularity and dominated the Japanese webtoon market. Currently, Kakao is producing one of the best results among all global businesses.
Kakao Piccoma ranked among the top 10 non-gaming apps worldwide in the global mobile app consumer spending survey last year by App Annie. [Photo = App Annie]
Amid the success of Piccoma, last year, for the first time ever, overseas sales accounted for more than 10% of Kakaos annual sales. In addition to Japan, as the webtoon platform Kakao Webtoon achieved results in Thailand and Taiwan, the content business emerged as the center of Kakaos overseas business. Kakao is also looking forward to the blockchain business centered on Crust, a blockchain subsidiary established in Singapore, and the NFT business led by Ground X. Also, Odin: Valhalla Rising, a large-scale multiplayer online role-playing game from Kakao Games, which has been successful in Korea, is also set to enter overseas markets in earnest, starting with Taiwan this year.
In the future, as Chairman Kim more actively participates in Kakaos global business, he is expected to take a look at Kakaos overall global business, starting with Kakao Piccoma, where he serves as an inside director. At the same time, it seeks synergies that encompass each of Kakaos global businesses. In an internal message, Kakao Chairman Kim Beom-su said in an internal message that Piccoma would be expanded to various areas beyond content and would be a key bridgehead for the global growth of the Kakao community. He mentioned that the result of the success was also imagining days connected to Kakao.
◆Cry global on the same day… In the face of stricter platform regulations, it is urgent to secure a growth engine
Coincidentally, the presentation of the global vision by Naver and Kakao took place on the same day. As Naver CEO Soo-yeon Choi took office on the 14th, Naver expressed its will to expand overseas business, saying that Naver will become an incubator of new businesses where global brands that surpass Line, Webtoon, and ZEPETO are constantly appearing. Meanwhile, Kakao Chairman Kim Beom-soo also announced his resignation through his company-wide message on the same day and said that he would take care of the global market.
The biggest reason Naver and Kakao agreed to go overseas is to secure a new growth engine. Although both companies have established themselves as representative IT platforms in Korea, there are still many fields that need to be further strengthened overseas, except for some businesses. Although it is showing prominence mainly in the content industry such as webtoons, it is analyzed that there are endless places to expand considering the various businesses the two companies are doing in Korea. As the stock prices of the two companies fell more than double-digit from their peak amid the markets disappointment over the lack of a growth engine, Naver and Kakao needed to present a vision for future growth potential.
There is also an observation that various regulatory movements with large IT platform companies in mind recently and social views on the infringement of alleyways further spurred their overseas expansion. Naver and Kakao entered into various businesses directly related to real life under the pretext of making daily life more convenient, but at the same time, they were not free from criticisms such as encroaching on small business areas and pursuing excessive profits through reckless increase in fees. It is also related to the fact that high-ranking executives from both companies were summoned several times during a state audit last year and questioned about infringement of alley commercial rights.
An industry official said that it would not have been easy to drive a new business boldly because the atmosphere that domestic IT platform companies should be tightly regulated has grown, and as long as a series of circumstances last year forced the two companies to focus more on the overseas market. He said it appears to have been a factor.