NAVER and Kakao Gaining Momentum
The author is an analyst of NH Investment & Securities. He can be reached at jaemin.ahn@nhqv.com. -- Ed.
Major opportunities such as the rise of the metaverse, the listing of Coupang, and the enduring popularity of webtoons are in play around the platforms of NAVER and Kakao. Moving ahead, the influence of these Internet heavyweights is only to expand further.
NAVER and Kakao gaining momentum: Pay attention to metaverse, Coupang, Emart, and webtoons
- We maintain a Positive rating on the Internet industry. Moving ahead, NAVER and Kakao should see rising influence in the commerce, metaverse, and content markets, backed by the robust platform competitiveness they have established in Korea over the past 20 years.
1) Implications of metaverse on platform business
- Koreans are already familiar with the metaverse of Cyworld, Lineage, Battleground, Weverse, etc
- Internet players should further solidify their lead in the metaverse era, backed by their extensive platform creation experience
- Can NAVER’s Zepeto become the Asian Roblox?
2) Implications of Coupang’s US listing on commerce business
- Coupang’s successful IPO drew strong market attention to the Korean e-commerce market
- NAVER and Kakao’s commerce businesses are enjoying strong growth driven by healthy traffic and the firms’ advertising and fintech prowess
3) Implications of K-webtoons’ global success
- K-webtoons are poised to dominate in Japan following success in Korea—global platform status on the horizon
NAVER and Kakao: Korea’s leading platforms
- NAVER and Kakao’s platform value should only increase further over time. Believing that additional earnings growth is also in the cards for these two companies that have learned to monetize their traffic, we expect them to continue enjoying great success not only at home but also overseas.
- Leading the growth of Korea’s e-commerce market, NAVER is expected to dominate its competitors in the advertisement, fintech, and platform arenas. Also worth paying attention to are NAVER Webtoon and NAVER’s metaverse platform Zepeto, which is now seeing meaningful results on the global stage.
- Meanwhile, Kakao is also showing meaningful results for its vertically-integrated services based on the KakaoTalk platform. As such services begin independently inducing traffic growth, establishing themselves as platforms in their own right, we expect to witness the emergence of a virtuous cycle of profit generation.