Kakao to Merge with Kakao Commerce, Chasing Naver and Coupang (Comprehensive)

[Asia Economy Reporter Bae Ari] Kakao is set to bring its e-commerce affiliate, Kakao Commerce, back under its wing. This move is seen as Kakao's full-fledged effort to strengthen its online shopping business, an area where it has not been as prominent as competitors like Naver and Coupang.

According to the IT industry on June 14, Kakao Commerce will hold a board meeting on June 22 to address the proposed merger with Kakao. Hong Eun-taek will remain as CEO of Kakao Commerce.

If approved by the board, Kakao Commerce will return to Kakao less than three years after its spin-off in December 2018.

This has led to speculation that Kakao intends to make e-commerce one of its core businesses.

Kakao is expected to intensify competition with Naver and Coupang in the e-commerce market, which has expanded significantly due to the impact of COVID-19. According to Statistics Korea, the online shopping market grew explosively from 135 trillion won in 2019 to 150 trillion won last year.

However, Kakao has long been considered less influential in the shopping business compared to Naver and Coupang. For this reason, Kakao was once mentioned as a potential bidder for eBay Korea, but ultimately did not participate in the bidding process.

Instead, Kakao is leveraging its national messenger app, KakaoTalk, to strengthen its shopping business. The company has added a "Shopping" tab at the bottom of KakaoTalk and is also expanding its "Kakao Shopping Live" business.

Earlier in April, Kakao announced that it would spin off the style business division of Kakao Commerce, which operates "Kakao Style," and merge it with Croquis.com, the operator of Zigzag.

An industry official stated, "Since services such as 'Gift' operated by Kakao Commerce are closely linked to KakaoTalk, it would be more efficient for the headquarters to manage them." In relation to this, a Kakao representative said, "We are reviewing various measures to maximize the synergy between the two companies."

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