Kakao selects subscription economy as new growth engine

Park Sae-jin Reporter() | Posted : November 18, 2020, 14:16 | Updated : November 18, 2020, 14:16

[Courtesy of Kakao]

SEOUL -- Kakao, a web service company that operates South Korea's popular messenger app, has selected the ever-growing subscription economy as a new growth engine. The subscription economy refers to the general trend of companies shifting to a subscription business model selling recurring subscriptions in exchange for access to a product or service.

Subscription services that offer products for a fixed monthly fee are popular in South Korea. All sorts of products from ready-to-eat food packages to apparel can be subscribed. Kakao said it would launch a product subscription service that allows users to easily sign up through KakaoTalk from November 19.

"In South Korea, subscription services are drawing more attention as the number of single-person households increases," co-CEO Yeo Min-soo said in an online news conference. "We expect this trend to be accelerated as the behavior of consumers changes and subscription areas expand due to the influence of COVID-19."

Kakao will expand its subscription service gradually to provide the regular delivery of food and cosmetic products. A platform would be introduced for subscribing to content such as news, videos, music and posts so that users can create pages focusing on content that they want, depending on their interest.

Kakao Talk with more than 35 million users provides various services including messaging, entertainment, digital payment and online shopping. In 2021, the all-in-one messenger app will launch a wallet service that can hold ID cards and certificates. Kakao's co-CEO Cho Soo-yong predicted that Kakao Talk can completely replace real wallets in the future.

Kakao has been allowed to digitalize physical authentications such as certificates, verification documents and identification cards so that users can conveniently interlink their personal data to various services. The digital user verification service will be provided through Kakao Talk. Personal data will be encrypted using blockchain.

"Our lives will become more convenient if we can simply and safely store our identity using mobile devices," Cho said. Kakao will offer other authentication services for university student identification cards and national technical certificates.

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