Messenger Service Expansion
As domestic and foreign mobile messenger companies are expanding platform businesses, their “superpower” status might become even stronger.
Major global mobile messenger companies such as Line, Kakaotalk, Whatsapp, and WeChat are expanding their businesses into mobile platform areas other than games including financial services and commerce (electronic transactions), and this is creating tension in the industry. Especially in Korea, as the new businesses of Kakao will start in the second quarter, the industry is focusing on whether or not Kakao’s superiority in mobile games could continue in other markets as well.
According to the industry on August 10, Kakao will start financial services with 15 commercial banks through its “Bank Wallet Kakao” service next month, and launch another service, “Kakao Quick Payment,” which enables users to purchase things at online shopping malls without public certification procedures. Kakao is also considering various other services including an agreement with taxi drivers.
Line, which has almost 500 million users now, is concentrating on the content platform businesses. During the second half of this year, Naver will enter into many new countries for platform services such as games, Line Mall and webtoons, and promote various marketing activities so that Line users could have access to a lot of new content. Following KakaoTalk, Line is also considering to start a small amount of payment services through Naver Band. There is the “1/N Calculator” function, which enables group members to divide membership fee equally in Band, and CampMobile plans to expand this service so that wire transfers can be done immediately without any additional service charges.
As Kakaotalk and Band, which have 3.7 million and 3.3 users in Korea respectively, will launch small amount remittance services during the second half of this year, competition in financial services will become very fierce in the mobile messenger market.
The problem is that platform business expansion of these messengers that is based on high user loyalty could negatively influence other companies. With KakaoTalk especially, 97.4 percent of people who installed Kakaotalk are actually using it. Considering the entire population of Korea as 50 million, more than 35.6 million people, over 70% of the whole population, are loyal users of Kakaotalk.
Based on this exclusive status in Korea, Kakao is charging its users excessively for game platform services, and might monopolize the domestic mobile platform market by taking advantage of its market share in the mobile messenger industry.
On the other hand, Tencent, a major Chinese IT company, is also expanding games and financial services through its mobile messenger WeChat. WeChat has more than 600 million users worldwide, and is currently operating TenPay in which WeChat users can connect their bank accounts to their WeChat accounts, together with game platforms.
In case of WeChat game platforms, their five major games already exceeded 570 million downloads last year, which means that each game scored an average of 110 million downloads. This is 20 million higher than Anipang and Dragon Flight, which were mega hits through Kakao Game in Korea.
On the contrary, Whatapp, which has the most users in the world, did not enter into the platform businesses yet. However, as Facebook acquired Whatapp last February, Facebook’s ambitious plan to expand financial services and electronic transactions could be effectively integrated with Whatsapp’s market share.