KAKAO UPS JAPAN DRIVE
Message app company counting on love of manga comics to give it an edge
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 comics to break that trend.
Amassing 43 million users at home has driven Kakao’s market value to 8.2 trillion won (RM31.17 billion) but it’s little known outside South Korea, a factor that’s contributed to a 31 per cent share price slump from a peak in August 2014.
To attract customers in Japan, and compete against a host of rivals in the US$4 billion (RM17.08 billion) manga market, Kakao’s Piccoma app adopted a new business model. Instead of charging per book, it sliced them into chapters to provide smaller and cheaper offerings and win over casual readers rather than just hardcore fans.
Not only has that added users and boosted revenue, but is helping it develop a platform in the country as it actively considers a Tokyo stock listing in 2020.
“Kakao hasn’t seen this kind of growth before outside South Korea,” said Kakao Japan Corp chief executive Kim Jaeyong.
The Japan unit, an office of less than 35 people, first introduced Piccoma last April offering a few dozen comics series. The service now features over 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 as of last month , and monthly users have exceeded two million.
Downloads topped those operated by Japan’s largest publishers and Line Corp for three months since May.
Kakao’s ultimate aim is to take the success of Piccoma and build a stronger user base in Japan like it already has in South Korea.
For now, Kakao’s Japan strategy is based on getting its manga formula right, especially as online growth surges and fewer consumers get their fix from printed versions.
Manga sales in the country amounted to 445.4 billion yen (RM17.51 billion) last year, of which 67 per cent was print based, according to a report published by All Japan Magazine and Book Publisher’s and Editor’s Association in February.
Digital grew 28 per cent, while those in print book volumes and magazines fell 7.4 per cent and 12.9 per cent, respectively.
Piccoma’s payment model is designed to encourage light reading, which Kim said could drive monthly revenue to one billion yen next year.
Kakao Japan has a long way to go. Its immediate challenge is adding blockbuster manga series like “One Piece” and “Attack on Titan” from Japan’s three largest publishers.