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KakaoTalk Now Profitable, Will Next Take Aim at Indonesia

Korean-made messaging app KakaoTalk is now ready to expand to other countries more aggressively. The reason? KakaoTalk is now profitable. In particular, the company tells us that it’ll focus on Android – and make a big push into Indonesia, complete with full payment support for its extra services. We talked to Yujin Sohn, the global business development VP of KakaoTalk, to discuss the company’s latest milestones and to hear in detail about its business model. Yujin revealed that KakaoTalk reached break-even point in September, and now the company is profitable. She explained that this latest milestone came a few months earlier than expected, largely due to the big success of the game platform which was launched in late July. With this latest milestone achieved, the company will now begin its expansion program to other countries more aggressively. She adds:

Being a startup with limited resources, we had to make the right decision [about] where to focus and when. We thought it [was] too risky to expand too aggressively before we solidified our business models and proved to ourselves that we could be financially on our own feet. Without focus, we could’ve lost everything. In Indonesia, KakaoTalk is specifically aiming to support a payment carrier system and launch more data packages with carriers. At the moment KakaoTalk is included in Telkomsel’s Opera Mini packet, Chat and Share package, and Axis’ Gaul package. It also intends to launch emoticons localized to Indonesians’ culture, and even plans to have K-Pop themed emoticons to capitalize on the genre’s popularity in Indonesia. KakaoTalk, Blackberry, and Indonesia

Despite its ups and downs, Indonesians still love their Blackberry phones. I asked Yujin why there are some KakaoTalk features that are not yet available on the Blackberry platform, such as its free calling service. This feature can help propel KakaoTalk above its other contenders such as Line and WeChat in Indonesia because they also don’t provide the feature for Blackberry fans. Yujin said that it is simply a bit harder for the team to build that particular feature for RIM’s platform. She also acknowledged the importance of supporting the Blackberry platform in Indonesia, and because of that, they have made the chat app available not only for higher end Blackberry models, but also the Blackberry Curve line which is the most widely used model in Indonesia.

KakaoTalk’s main focus so far is on the Android platform, and then iOS. This is because 70 percent of Korean KakaoTalk users, which is the biggest KakaoTalk user nation, are on Android.

Gaming, Commerce, and Celebrities

So, if KakaoTalk brings all its features to Indonesia, what can users expect? Besides the communication features, KakaoTalk’s also has four business models (pictured above): ‘plus friend’ advertising, digital items, mobile commerce, and its more recent social gaming platform. The advertising aspect works like WeChat’s social media marketing which allows companies and brands to communicate with the app’s users should people add the those brands as their friends. KakaoTalk has more than 200 ‘plus friend’ advertising partners now, and over 66 million such social marketing friendships/follows made, with each brand averaging around 350,000 followers [1]. Overall there are a total of 15 million unique users of this particular feature. KakaoTalk earns money by selling digital items like premium emoticons and stickers to its users. Companies and brands can cooperate with KakaoTalk to produce their own special series of emoticons as a brand marketing tool. The revenue will then be shared between the brand and the messaging startup. Here is an example of some brand-based emoticons:

KakaoTalk’s other business model is mobile commerce, which allows users to purchase online goods and then send them to a friend via the app as a gift. The friend will then be able to redeem the gift through the corresponding merchant. There are now more than 320 brands that have cooperated with KakaoTalk for this feature, with 7,700 items available for purchase. The social gaming platform (pictured above) is the fourth and newest business model developed by the Korean firm. Users can play in-app games using KakaoTalk’s social API. Yujin told me that the game platform was a massive hit in Korea, and soon after its launch seven games that integrated with this rocketed to the the top ten spot in Korea’s Google Play. We’ve talked about one of its most successful game Anipang recently. Yujin shared more details about KakaoTalk’s in-app games data (all of the games are available only in Korea for now):

・There are 26 games on the Kakao game platform.

・The top three games are Anipang (20 million downloads, DAU 12 million, concurrent users 3 million), Dragon Flight (11.6 million downloads, DAU 7.7 million), and I Love Coffee (3 million downloads, DAU 1.3 million).

・As of November 6th, total number of games downloaded were 82 million, with 23 million users have downloaded at least one Kakao game.