Asia’s messaging apps have a history of becoming huge in their home market before struggling to gain traction overseas. South Korea’s Kakao Corp is counting on the Japanese love of manga to break that trend.
Amassing 43 million users at home has driven Kakao’s market value to 8.3 trillion won (US$7.4 billion), but it is little known outside South Korea, a factor that has contributed to a 31 percent share price slump from a peak in August 2014.
Earlier efforts to add customers in Southeast Asia and Japan have foundered as it ran head-first into dominant apps such as WeChat and Line.
To attract customers in Japan, and compete against a host of rivals in the US$4 billion manga market, Kakao’s Piccoma app has adopted a new business model. Instead of charging per book, it sliced them into chapters to provide smaller and cheaper offerings, winning over casual readers rather than just hardcore fans.
Not only has that added users and boosted revenue, but it is helping Kakao develop a platform in the nation as it actively considers a Tokyo stock listing in 2020.
“Kakao hasn’t seen this kind of growth before outside [South] Korea,” Kakao Japan Corp chief executive Kim Jae-yong said in an interview at the company’s Tokyo headquarters. “We have a chance here.”
The Japanese unit, an office of less than 35 people, first introduced Piccoma in April offering a few dozen comics series. The service now features more than 1,000 items, with themes spanning from romance to fantasy.
The number of daily readers, a key metric for manga apps, reached 900,000 for the fledgling service last month and monthly users have exceeded 2 million. Downloads topped those operated by Japan’s largest publishers and Line Corp for the three months since May.
It made other innovations as well, including taking inspiration from its popular Anipang game in South Korea.
While the home version gives users extra chances to win with a day of waiting, for Piccoma it allowed readers to access free chapters after 24 hours.
Kakao’s ultimate aim is to take the success of Piccoma and build a stronger business in Japan like it already has in South Korea. For analysts, that is the key to success for instant messaging apps, especially as they morph into other services that generate revenue, such as games, for an otherwise free app.
“Any overseas business is going to be very difficult,” Seoul-based Eugene Investment & Securities analyst Jung Ho-yoon said.
“It has to be based on a platform and they are pretty much fixed by now, globally, like how it’s Line for Japan,” Jung added.
Jung recommends buying the stock on Kakao’s potential to branch out into mobile services, including banking, with its firm grip in South Korea.
While Eugene Investment & Securities is one of more than a dozen brokers with a buy rating, none cite potential overseas expansion as a reason.
After solidifying Kakao’s presence in Japan, Kim hopes to tap the Chinese market by leveraging its relationship with Internet giant, and WeChat owner, Tencent Holdings Ltd (騰訊).
Tencent holds more than 8 percent of Kakao through its affiliate Maximo Pte.
The two companies have cooperated on previous occasions on banking and comics services.
Last month, Kakao announced that an online comics service, operated by Tencent, would adopt its model of providing content for free after a certain time.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day