Platform Business in Korea: Advent and Growth of Kakao

Department of Entrepreneurship, School of Global Service, Sookmyung Women’s University, Cheongpa-ro 47-gil 100, Yongsan-gu, Seoul, Korea, 04310

^* Corresponding author: yjhan@sookmyung.ac.kr

Abstract

With the rapid development of ICT technology, a platform business is exerting a dominant influence in various fields. This type of a business has a great ripple effect in that it creates value by engaging and connecting various market actors such as producers, suppliers, and business partners to the platform ecosystem, rather than directly selling independent products or services. In this vein, the current study introduces the emergence and growth process of Kakao, which has a monopolistic dominance in the Korean mobile messenger market, as an example of a platform business. This company started to be distributed to Korean consumers in 2010 and is currently exercising its market influence in various fields such as commerce, entertainment, finance, and transportation, and more growth is expected in the future. Based on the case investigation, the background of Kakao’s success can be interpreted with a combination of various reasons, such as Korea’s developed ICT environment, a large game users’ population, quick service launch, the strategy to utilize the founder’s previous work experience, and service development geared towards Korean consumers.