Nakao Identifies 'Global' as Key Strategy to Break Korean Platform Monopoly Issue

[Asia Economy Reporter Kang Nahum] Naver and Kakao are busy reorganizing their leadership to target the global market. Naver has launched a full-scale overseas market expansion by appointing global M&A expert Choi Soo-yeon as CEO, while Kakao's founder and Chairman of the Board Kim Beom-su has stepped down to focus on future business planning. Analysts suggest that these two companies, which have faced challenges due to platform monopoly issues domestically, are seeking new growth opportunities through this executive reshuffle.

According to industry sources on the 15th, Kakao announced that Chairman Kim will step down from his position at the end of this month’s shareholders' meeting to dedicate himself to the global expansion of the Kakao community. Naver held a shareholders' meeting and board meeting to appoint Choi Soo-yeon as the new CEO.

Although their approaches differ, the common keyword driving the leadership changes is ‘global.’ Kakao declared its intention to pioneer new territories beyond Korea under the slogan ‘Beyond Korea.’ Similarly, Naver’s CEO Choi stated, "All goals of Naver’s business are aimed at going global," signaling a serious push into international markets.

The background behind the two major domestic platforms putting their lives on the line for overseas expansion lies in the domestic ‘platform monopoly issue.’ Particularly, Kakao faced heavy criticism last year for reckless business expansion, dubbed ‘octopus-like expansion,’ drawing backlash from regulatory authorities, politicians, and public opinion. That year, Chairman Kim was summoned three times to the National Assembly’s audit, where lawmakers intensely questioned him about allegations of infringing on small businesses and tax evasion.

[Image source=Yonhap News]

Naver was also not free from platform monopoly issues. It penetrated various industries such as shopping, finance, cloud, webtoons, music, and gaming, transferring its market dominance as the number one portal operator across sectors.

Regulatory actions followed. Seoul City recently detected signs of ‘selective passenger acceptance’ by Kakao Taxi and launched an investigation. Earlier, the Fair Trade Commission found that Naver Shopping and video services manipulated search algorithms to place their own products and content at the top while pushing competitors’ offerings down, imposing a fine of 26.7 billion KRW for unfair practices.

Despite efforts to escape these issues, such as withdrawing from businesses criticized for infringing on small businesses and establishing a 300 billion KRW mutual growth fund, there were limits to reversing the already entrenched public opinion of ‘platform bullying’ and ‘platform monopoly.’

Kakao, led by Chairman Kim, is planning a global strategy for all Kakao affiliates. The focus is on expanding Kakao’s territory worldwide, using Japan as a foothold. In a message sent to all employees the day before, Chairman Kim said, "Going forward, Piccoma will expand beyond content into various fields and become a key bridgehead for the global growth of the Kakao community, and we will support this effort."

Naver also plans to build a system that fulfills social responsibilities and legal obligations globally while expanding its global business through synergy among its various operations. It intends to proactively invest in technology and human resources to discover new businesses that will grow globally. CEO Choi emphasized in an internal letter to employees shortly after her appointment, "Naver will become a meaningful platform that creates better lives and growth for users, creators, SMEs (small and medium-sized enterprises), and partners worldwide."

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