Kakao to create new open online commerce platform with zero referral fee

By Park Sae-jin Posted : November 16, 2021, 17:43 Updated : November 16, 2021, 17:43

[Courtesy of Kakao Commerce]

SEOUL -- South Korea's web service giant Kakao will create a new open online commerce platform that will require zero referral fees from sellers. While most referral fees on Amazon, the world's largest online commerce platform, charge up to 15 percent on selling fees, South Korean online shopping malls demand up to 20 percent.

Kakao's online commerce platform is integrated with Kakao Talk, the country's most favorite smartphone messenger app with some 45.6 million monthly active users. Customers have used the platform to shop for groceries and other items but the real cream of Kakao's online commerce service is a mobile gift coupon feature that allows users to send electronic coupons (e-coupons) to others by going through a simple process that takes less than 30 seconds.

According to the national statistical service, Kakao's gift coupon service accounts for up to 95 percent of South Korea's mobile electronic coupon sales. In 2021, some 3.3 trillion won ($2.7 billion) worth of e-coupons was sold in the domestic online gift coupon market from January to July, up 42.7 percent from a year ago.

"To perfect the business capability of Kakao Talk's channel feature, we are preparing to open a channel-based open online commerce platform," Kakao's chief business officer Lee Jong-won told viewers at an online conference on November 16. Kakao Talk's channel feature allows companies and individuals to open private chatting rooms with customers. Channels can be used to offer customer services or special deals.

"We will pursue the true meaning of co-existence by offering the same options for brands and small business operators. A zero-fee open commerce platform that requires no selling fee or admission fee will be created," Lee said. The authenticity of products will be guaranteed through certifications issued by Kakao. Blockchain technology will be used for authentication.

The zero-fee commerce platform is Kakao's first move to establish a co-existing alliance with small businesses after consumers and lawmakers denounced the web service company for launching a hair salon reservation service that could threaten small shops that cannot pay referral fees to attract more customers. The country's hair shop market experienced a business slump in 2020 when a coronavirus pandemic prompted people to stay at home and avoid visiting crowded places.

Kakao has been criticized for making a greedy inroad into the business scope of small-sized companies. Under public criticism, Kakao Chairman Kim Beom-soo took action to retract the hair shop reservation service and lower membership fees for taxi drivers who have used a popular taxi-hailing platform run by Kakao's mobility service wing. He also promised to raise a 300 billion won co-existence fund for five years to maintain sustainable growth with platform workers and small business operators.
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