Kakao to spin off e-commerce unit for expansion
In this article (5)
South Korean mobile messaging platform Kakao is spinning off its e-commerce unit for further expansion.
The new organisation will be Kakao’s largest spin-off, worth about KRW510.3 billion (US$458.6 million) by December. It will take over the operation of the Kakao Gifts, Shopping, Kakao Style and Kakao Farmer services.
Kakao has also made plans to acquire global e-commerce firms and has expressed being open to securing additional funds through its spin-off.
A spokesperson for the company said: “We are indeed open to securing additional investments after the process is completed. But at the moment we do not have any specific plans.”
Kakao’s e-commerce business is weak in comparison with industry leader Naver, achieving only one seventh of the sales of its competitor. Its messenger service, conversely, remains dominant in its market.
Questions & Answers
Q.What services will the new e-commerce spin-off be responsible for operating?
What services will the new e-commerce spin-off be responsible for operating?
The newly formed organisation will take over the operation of several existing Kakao services. These include Kakao Gifts, Kakao Shopping, Kakao Style, and the Kakao Farmer services.
Q.What is the primary reason Kakao is spinning off its e-commerce unit?
What is the primary reason Kakao is spinning off its e-commerce unit?
Kakao is spinning off its e-commerce unit to facilitate further expansion within the e-commerce sector. This strategic move aims to strengthen its presence in this market.
Q.How does Kakao's current e-commerce sales performance compare to its main competitor?
How does Kakao's current e-commerce sales performance compare to its main competitor?
Kakao's e-commerce business currently achieves sales equivalent to only one seventh of its industry leader competitor, Naver. This indicates a significant gap in market share.
Q.Is Kakao considering external investment for the new e-commerce entity?
Is Kakao considering external investment for the new e-commerce entity?
Yes, Kakao has expressed openness to securing additional funds through its spin-off process. A spokesperson confirmed they are open to further investments once the process is complete, though no specific plans exist yet.
Reader pulse
Will Kakao's e-commerce spin-off succeed?
24,140 votes so far