"Focusing Only on Immediate Gains..." Naver and Kakao's Position Shaken

Gap Between Actual Users of KakaoTalk and Google Hits 'All-Time Low'
Domestic Platforms Including Messenger, Music Streaming, and OTT All Struggle

Google and other major US big tech companies are accelerating their encroachment on South Korea's information technology (IT) platform market. The 'national messenger' KakaoTalk and Naver, the absolute leaders among domestic native platforms, are continuously losing ground.

According to mobile index statistics from mobile big data company IGAWorks on the 13th, the gap between KakaoTalk operated by Kakao and YouTube operated by Google recorded the smallest ever difference in MAU (Monthly Active Users) last month. MAU refers to the number of users who use a service at least once a month.

Last month, KakaoTalk maintained its top position with 41,558,838 MAU. However, the gap with second-place YouTube (41,157,718 users) narrowed to 401,120 users.

Since the beginning of this year, the MAU gap between KakaoTalk and YouTube has decreased for five consecutive months, narrowing to the 500,000 range in May and entering the 400,000 range last month. This is the smallest gap ever recorded since mobile index statistics began in May 2020, integrating the two major smartphone operating systems, Android (Google) and iOS (Apple).

The key to this change is analyzed to lie in the preferences of users in their 30s. Looking at previous age-group MAU data, YouTube was preferred by those under 10 and in their 20s, while KakaoTalk was favored by those aged 30 and above. However, in May and last month, YouTube ranked first in MAU among users in their 30s.

If this trend continues, it seems highly likely that KakaoTalk will be overtaken by YouTube within this year.

In the music streaming market, YouTube is also closing in on Melon, Kakao's largest domestic platform. Last month, the gap between first-place Melon (6,651,897 users) and second-place YouTube Music (5,807,421 users) in the domestic mobile music market MAU narrowed to 844,476 users.

Last month was the first time the monthly MAU gap between the two platforms narrowed below one million. YouTube Music's user share (25.3%) also exceeded 25% for the first time.

The domestic online video service (OTT) market and social network service (SNS) market have already lost their top spots to Netflix and Meta's Instagram, respectively. In the cloud market, Amazon Web Services (AWS) is leading.

YouTube has long surpassed KakaoTalk and Naver in domestic mobile application (app) total monthly usage time and active device count indicators. Last month, the total mobile usage time for YouTube in South Korea was approximately 1,529.2 million hours, which is 2.9 times and 4.4 times that of second-place KakaoTalk (approximately 518.76 million hours) and third-place Naver (approximately 345.54 million hours), respectively.

In the active device count rankings, YouTube (41,951,522 devices), Gmail (41,933,632 devices), Google Portal (41,782,931 devices), Chrome (41,778,247 devices), and Google Maps (41,585,710 devices) swept the top ranks. KakaoTalk (40,415,882 devices) and Naver (39,593,651 devices) followed behind.

In the web-based search engine market, Google's share rose to the 30% range, while Naver's share fell to the 50% range.

The reason for this situation is pointed out to be that Kakao and Naver have been complacent with the domestic market and focused only on immediate profits. They neglected improving their core search services and technology development, instead concentrating on generating profits through advertising businesses.

In 2020, Naver was fined 26.7 billion KRW by the Fair Trade Commission for manipulating search algorithms to expose its own products and services at the top of search results. In Kakao's case, industry analysis suggests that the prolonged service outage caused by the October fire at the Pangyo data center (IDC) last year was a major factor in customer attrition.

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