Kakao (035720.KS) is entering the paid membership market, setting up a three-way contest with NAVER and Coupang. As the late entrant, Kakao plans to expand outside partnerships, beginning with CJ Olive Young, to strengthen benefits centered on content and lifestyle services. The question is whether it can convert KakaoTalk's user base into a competitive edge against Coupang, which leads with its own distribution network, and NAVER, which has lined up a wide range of partners.
Kakao is preparing an event with CJ Olive Young to offer product coupons to teenage users, timed to the launch of Kakao Membership, according to information technology industry sources on the 29th. Starting there, the company is expected to widen outside partnerships to address demand it cannot meet with its own services alone.
The tie-up with Olive Young is part of a marketing push to broaden contact with the next generation of customers. According to research firm OpenSurvey, 93.2% of people in their 20s named KakaoTalk as the app they use to send and receive gifts, compared with just 70.8% of teenagers. For Kakao, that means it needs stronger benefits to keep younger users coming back to its services.
Steering existing subscribers into the integrated membership is another task. Kakao Group runs monthly subscription services including Emoticon Plus, TalkDrawer Plus, Kakao T Members and Melon. Because benefits may overlap for customers already using individual services, outside partnerships could serve as the incentive to sign up for more.
That approach converges with the strategy NAVER has already pursued in expanding benefits through outside partners. NAVER Plus Membership has broadened its user base by combining digital content and offline services on top of shopping rewards. Rather than confining itself to one industry, it has secured a variety of partners so users can tap benefits that match their own spending patterns.
The clearest example is its collaboration with Netflix. According to results NAVER disclosed in April last year, average daily new sign-ups for NAVER Plus Membership rose about 1.5 times after the Netflix tie-up. Netflix also expanded its user base in Korea. Netflix's monthly active users grew 39.8% to 16.2 million in August this year from 11.59 million in November 2024, according to IGAWorks' Mobile Index.
NAVER is also extending partnerships into music (Spotify), mobility (Uber), food delivery (Yogiyo), gaming (Microsoft), grocery shopping (Kurly, Homeplus Mart, Lotte Mart and CU), cinemas (Lotte Cinema) and education (EBS). The strategy is to bundle services spanning shopping, leisure and daily life to make the membership more useful.
Coupang, by contrast, has built its benefits around its own distribution network and platform. It pairs commerce perks such as free Rocket Delivery and Rocket Fresh shipping, free overseas direct purchases and free returns with Coupang Eats and Coupang Play. The idea is to lock in customers by keeping shopping, delivery and video services inside its own platform.
Kakao, whose distribution capability is relatively weaker, is expected to lean on a strategy of adding outside partners to its own content and lifestyle services. Its recent strategic partnerships with Coupang Eats and the Walt Disney Company Korea support the prospect of further collaboration. That means the groundwork is already in place for cooperation in delivery and online video streaming.
If it links outside platforms to its own services — commerce (Gift and TalkDeal), KakaoTalk (emoticons and TalkDrawer), mobility (Kakao T taxis and designated drivers), music (Melon), content (KakaoPage) and finance (KakaoPay) — it opens a path to offering users as much choice as NAVER does.
For outside partners, the vast user base of KakaoTalk, a messenger used by virtually the entire country, can also serve as an attractive distribution and marketing channel. Kakao Membership offers them a chance to win new customers and convert them into product purchases or service use.
"Netflix earlier settled quickly into its Korean business through NAVER's membership, and both sides reaped a win-win effect," one industry official said. "There will be considerable demand from outside companies looking to broaden their user base by joining Kakao Membership."
Kakao will run Kakao Membership on a trial basis for some users from Oct. 1. It plans to accept sign-ups on a first-come, first-served basis to check service stability and raise user numbers in stages. An initial subscription fee of about 4,900 won a month, the same as NAVER Plus Membership, is under discussion.
"Outside partners and the subscription fee have not been decided at this point," a Kakao official said. "We plan to disclose them in line with the service launch date."
