Kakao Strengthens E-commerce by Absorbing Kakao Commerce

[Asia Economy Reporter Buaeri] Kakao announced on the 22nd that it will absorb and merge Kakao Commerce.

Kakao will acquire 100% of Kakao Commerce's shares and then absorb and merge it, with the merger date set for September 1.

Kakao Commerce will operate as a Company-In-Company (CIC) and CEO Hong Eun-taek will retain his position.

Kakao stated, "This decision is to enhance management efficiency and maximize synergy through business integration to strengthen market competitiveness."

It is interpreted that Kakao, which had not shown a strong presence compared to Naver and Coupang, is now actively strengthening its e-commerce business.

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

However, Kakao has been regarded as less prominent in the shopping business compared to Naver and Coupang.

Kakao is strengthening its shopping business by utilizing the national messenger 'KakaoTalk.' It placed a 'Shopping' tab at the bottom of KakaoTalk and is also expanding the 'Kakao Shopping Live' business.

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

An industry insider said, "Services such as gift-giving operated by Kakao Commerce are closely related to KakaoTalk, so it would be more efficient for the headquarters to operate them." Regarding this, a Kakao official 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.