[Click eStock] Webtoon Giant Kakao, Successful Standalone Without 'KakaoTalk'

Big Hit in the Japanese Market... Ample Growth Potential Ahead

President Moon Jae-in attended the Digital New Deal Cultural Content Industry Strategy Report Meeting held on the afternoon of September 24 last year at Camp One, a private online performance venue in Gimpo-si, Gyeonggi Province, and listened to Lee Jin-su, CEO of Kakao Page, present a successful case of webtoon intellectual property (IP) expansion.
[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] As Kakao's content business, including webtoons, accelerates its growth, there are forecasts that its future performance will steadily improve.

On the 5th, Ebest Investment & Securities maintained a 'Buy' rating on Kakao and raised the target price by 6.2% to 446,000 KRW. The previous day's closing price was 396,000 KRW. This was due to the high domestic and international growth potential of content-specialized subsidiaries such as Piccoma and KakaoPage, as well as their strong expansion possibilities into secondary content.

KakaoPage began to grow rapidly starting in 2014. By adopting a model where users could wait 24 hours to access the next episode of webtoons and web novels for free, the number of users who chose to pay instead of waiting exploded. This eventually led to habitual revisits and repurchases, resulting in improved performance. Changyoung Lee, a researcher at Ebest Investment & Securities, explained, "After a poor start that led to restructuring half of the staff, the 'Wait and Free' model launched in November 2014 began to achieve great success. Within a month of introduction, daily active users (DAU) surged from 200,000 to 900,000, and monthly transaction volume jumped from 1.3 billion KRW to 7.5 billion KRW."

Piccoma, which entered the Japanese market, also introduced the 'Wait and Free' model, achieving significant success with serialized webtoons in Japan's digital manga market, which had been dominated by tankobon volumes. As of the third quarter of last year, transaction volume reached 130 billion KRW, marking a 247% increase year-over-year and a 44% increase quarter-over-quarter, showing rapid growth.

In particular, success in the Japanese market is regarded as having changed the existing manga market trends. Only 1.3% of the manga supplied on the Piccoma platform are domestic intellectual property (IP) works, but these account for 35-40% of sales. Webtoon manga are outperforming traditional publications. Among approximately 40,000 serialized works, only 400 (1%) are webtoons. The rest are 'digital comics' scanned from existing Japanese publications. However, webtoons account for 45% of Piccoma's total transaction volume. Lee explained, "Japanese digital manga are scanned paper manga that users manually zoom on mobile screens as needed, resulting in low readability, whereas domestic companies' webtoons are conveniently consumed through an automatic scrolling format that fills the entire screen."

Since webtoons still account for less than 5% of the Japanese digital manga market, there is significant potential for future growth. Lee said, "The Japanese manga market is worth 500 billion yen (approximately 5.7 trillion KRW), while the digital manga app market is 69.7 billion yen, and the digital manga web market is 189.6 billion yen. Digital manga accounts for 52% of the total Japanese manga market, and Piccoma's share within the Japanese manga market is only 8%, so growth potential is very high." He added, "Considering the potential for expansion into secondary content, the corporate values of Piccoma and KakaoPage reach 5 trillion KRW and 1.9 trillion KRW, respectively."

This content was produced with the assistance of AI translation services.