June 26, 2019

Kakao to spin off e-commerce unit for expansion

PUBLISHED : October 02, 2018 - 15:13

UPDATED : October 02, 2018 - 15:13

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[THE INVESTOR] Korea’s largest mobile messenger operator Kakao said on Oct. 2 it will spin off its e-commerce unit for further expansion here.

The unit will become the largest spun-off entity of Kakao with total assets worth around 510.3 billion won (US$458.6 million) after the process is concluded by Dec. 1. Its current services, including Kakao Gifts, Shopping, Kakao Style and Kakao Farmer, are expected to be operated by the new entity.

Despite being Korea’s top messenger operator, Kakao has not made a mark in the e-commerce market. The turnover of its e-commerce unit is around 1 trillion won, which is only one-seventh of another Korean internet giant Naver. Moreover, sales of the unit reached 2.258 billion won in 2017, accounting for 11.7 percent of the company’s total sales of 1.9 trillion won. On the other hand sales of Naver Shopping reached around 2.15 trillion won.

According to industry sources, Kakao plans to expand its presence by acquiring firms that have a global presence in the e-commerce market like Korea Center, operator of Malltail that provides international shipments.

In addition, Kakao is also open to securing additional funds through it spun-off unit. “We are indeed open to securing additional investments after the process is completed. But at the moment we do not have any specific plans,” a Kakao spokesperson told The Investor.

By Song Seung-hyun (

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