Neck-and-neck Race
Kakao will launch “Yellow ID,” a marketing service for small and medium businesses, from August 20. This is a direct challenge against Naver, which is already dominating the market through search advertisements.
The war between Naver, a major Korean Internet company, and Kakao does not end here. Fierce competition in the Online to Offline (O2O) area, including mobile wire transfers, electronic transactions, news and marketing platforms, are inevitable.
According to the industry on August 11, Naver and Kakao will launch various new services to break the borders between online and offline, and compete with each other intensely.
First of all, Kakao plans to expand marketing outlets for small and medium sized businesses primarily dependent on portal search advertisements like Naver so far. Kakao has been operating demonstration services of “Biz Profile,” the predecessor of Yellow ID. Currently, over 1,300 businesses are registered for the service.
The brutal war between Kakao and Naver has also expanded electronic transactions through mobile platforms.
Naver recently introduced “Band Fashion,” a shopping service at acquaintance-based social networking service Band. Band Fashion provides product lists classified by gender and category at the additional view functions inside Band. Users can directly purchase certain products if they touch the images they like.
Furthermore, Naver has optimized its shopping environment for mobile by exposing intellectual shopping images instead of links at the result pages when users search for products at the mobile web and applications. For example, if the keyword “dress” is searched for, product images are intuitively shown instead of exposing the addresses of shopping mall websites, which is what the PC-based web does.
Kakao is enhancing electronic transaction services through KakaoTalk gifts and purchases. Currently, Kakao is offering two major services, mobile coupons and actual product deliveries. Kakao is operating café, bakery, restaurant, and movie services, and also luxury shops with products that cost more than 1 million won (US$973). As of July, the number of accumulated products for gifts was 130,000, and the number of accumulated brands was over 2,000.
Competition is the fiercest in the expansion of mobile wire transfers and payment businesses. Naver will start small amount remittance services by adding “Yellow Pay,” a payment service based on a mobile phone number, onto Band within this month at the earliest. A “1/N Calculator” function that enables group members to divide membership fees equally will be integrated with a payment button in order for remittances through virtual accounts to be possible. Kakao is also putting together its own version of mobile payment services called “Bank Wallet Kakao” and “Kakao Quick Payment” next month.
In addition, Kakao is considering daily life platform services such as “Kakao Taxi,” and Naver is also preparing new services. Kakao will penetrate the news content market as well, which is currently under Naver’s dominance.
An industry professional said, “As Kakao and Naver are competitively expanding their businesses, traditional offline industries are threatened. However, this trend will continue for the competition with global IT companies.”