EXCLUSIVE: KakaoTalk Sets to Expand to Indonesia

KakaoTalk, one of the rising player in messaging platform, has just launched its Windows Phone version a few days ago. It's now available in most smartphone platforms, including Android, iOS, BlackBerry and now Windows Phone. Turns out, it's not the only exciting plan coming from the company -- recently got funded from China's Tencent. KakaoTalk has been hugely popular in South Korea and is now targeting new market to be acquired. The first target is Japan and the second target is Southeast Asia countries with Indonesia as the primary.

Previously, WeChat have set social marketing strategy here in Indonesia to gain more attention from local communities about China's hip messaging app. Both KakaoTalk and WeChat are having Tencent at the board. Other player in the market is mig33, but mig33 still focuses heavily on feature phone users although they recently try to grab more users who use Android and BlackBerry.

We've been speaking with one KakaoTalk representative to obtain more explanation. The reason why Southeast Asia had been chosen as the target simply because the region is perfect place to launch new media services. The new media adaptation rate is very high and of course the region has many potentials for its population. The representative said that KakaoTalk has collaborated with local company on implementing the plans -- not as KakaoTalk's branch office, but more as partner. The plan will conducted on August to grow the user base in Indonesia until end of the year. In the early 2013, It's planned to integrate all four business models to Indonesia.

First, we must understand that KakaoTalk is no longer "just a messaging app". It currently has around 50 million registered users globally and has evolved beyond messaging. In Korea, it's having four business models (and APIs) to support the platform. They are Plus Friend Advertising, Digital Item, Mobile Commerce and Game Center. Game Center is the latest update and will be unveiled this July.

Plus Friend Advertising means we can subscribe to certain account (as friend), where this account will broadcast about events and information. Take an example of Super Junior (SuJu) boyband as "your friend" in Kakao Talk. Every time SuJu is having new promotion, their subscribers will be the first to know. With avid fans around the world, we know that attracting blockbuster artists, like SuJu in this case, will instantly bring massive users. KakaoTalk has partnered with SMTown management, known as agency for many K-pop artists. Moreover, there are around 180+ Plus Friend Advertising partners currently existed. Prominent restaurant chains like McDonald's, Burger King and KFC are also among the list.

Digital Item is small set of emoticons and stickers that can be used to communicate with friends. Some users may have notice similar thing in LINE and WeChat. KakaoTalk collaborates with digital artists on bringing unique and special emoticons to users. Some are free, but mostly will be in paid scheme for small fee, like $0.99 per set.

Mobile Commerce is another nice thing. For example, we can purchase coupon/gift for a single cup of coffee and paid directly inside the platform. Then, we can send the coupon to our friend and he/she can use it to buy a cup at the nearest store simply by showing the gift to the cashier. No hassle required in Korea but certain things may be introduced in Indonesia like how would cashier be able to record the transaction with phone as intermediate device.

The last one is Game Center. No games has been announced to be available as it'll be available this month, but big picture here we can play inside KakaoTalk, like playing some games inside Facebook. LINE has been implementing this too, as well as mig33. There will be table and league where we can show off our points and competing with friends who are playing the same games. KakaoTalk will partner with many game developers and this feature will help prolong the spending time inside the app.

Let's move along to Indonesia. There would be specific move to accomplish the target in Indonesia. Three business plans (outside Game Center that has just be implemented) will be executed here. They will collaborate with local digital artists, local business chains and local celebrities to extend KakaoTalk's acceptance in new height. Of course, the K-Pop artists that already have enormous fanbase in Indonesia will be brought here too.

How would Indonesians benefited from KakaoTalk's move? First, digital artists can submit their set of emoticons to be highlighted in KakaoTalk. Eventually, a set of Ramadan emoticons has been released today and can be downloaded by Android (and maybe iOS) users. Unfortunately BlackBerry version is unable to support emoticon feature bacause of technical issues.

Second, celebrities and business chains can collaborate to extend their presence in social media platform. Yes, messaging platform is now social media platform too! Even better, the platform ease them to broadcast information or sell stuffs to the audiences. Instead of just creating a social media platform where people only do chatting and gossiping, pivoting into messaging platform that can be extended to utilize commerce feature will be logical thing to do.

The main obstacle, in my opinion, lies on the payment system and phone preferences. The payment system in smartphone will force KakaoTalk to collaborate with system owner (like Apple or Google) on handling the purchase. While the credit card ownership has been rising in recent year, it's still inconvenience for many Indonesian users to utilize online financial system. What makes mig33 so successful on micropayment in Indonesia is the ability to pay with petty cash (hard cash) to buy gift/coupon that can be redeemed as e-wallet to pay stuffs in the platform.

In relation with the first problem, the current number of Indonesian smartphone users is still not as many as feature phones. It will be a niche market until the number is flipped. Relying on smartphone will be smart move but it has to wait until becoming more mainstream to acquire extensive number of users. If KakaoTalk be able to tackle those two problems, it's a guarantee that mobile commerce in Indonesia will be brought into the next level.