Dark
Light

Indonesia Surpassed Japan as KakaoTalk’s Largest Market Outside of Korea

3 mins read
November 22, 2013

During Startup Asia on Thursday we had a chance to spend some time talking to Kakao co-CEO Sirgoo Lee who shared quite a bit of insight into how KakaoTalk performs in the Indonesian market, why Kakao’s games are not popular in the country, understanding and adapting to local market needs, and having Tencent as a major investor. As it turned out, Indonesia is now Kakao’s second largest market with 13 million registered users.

Lee was in town for the Startup Asia conference but also to see for himself the landscape of the Indonesian mobile consumer market. He admitted that he was surprised at the growth and adoption of KakaoTalk by Indonesians which is now over 25 times larger than it was this time last year.

Indonesia is Kakao’s second largest market
In early 2013, KakaoTalk engaged in some serious advertising blitz in Indonesia which hit all media platform possible, from super aggressive mobile ads, cinema and online video pre-rolls, print and radio ads, and even monster banners down the sides of Jakarta’s major buildings.

“We saw Indonesia as a potential country where we can enlarge our user base and start a general marketing campaign. We started at the end of last year and up until that point we didn’t do any marketing locally. We had a [organic] growth of about 500,000 users”, Lee told DailySocial.

While the company’s aggressive marketing had been toned down significantly since the beginning of the year, the company is still running marketing campaigns and after nearly a year, Indonesia has now become the company’s largest market outside of South Korea with 13 million registered users, surpassing Japan. “Up until middle of this year Japan was our largest market outside of Korea but now Indonesia has passed Japan and we’re very excited about that. We’re surprised”, Lee said. “Indonesia is now our number one market outside of Korea”.

To achieve that number, Kakao implemented both technical and service oriented strategies in addition to its marketing campaign. The company made adjustments and optimizations to the app and how it sends data across the network to make sure it works better and faster in Indonesia. Lee diplomatically said, “the network environment is very different from Korea”.

“On the service side we’ve been promoting the product together with the local businesses and we tried to add more local flavor to the product itself”, Lee said. Being KakaoTalk’s largest market outside of Korea, the company is paying greater attention to the country and will implement strategies that are more attuned to the market condition and behavior in the coming months.

Kakao’s games not that popular in Indonesia
Games and its premium communications channel for brands on KakaoTalk, Plus Friend, are the company’s primary ways to earn revenue. Although Lee did not disclose the figures either global nor Indonesia specific, in the first half of 2013 it earned USD 311 million from its games according to The Next Web. The majority of that revenue had been coming from Korea and Japan but not from Indonesia.

When the company launched its games, KakaoTalk was already enjoying widespread usage in Korea and Japan, so it was able to use that as a foundation to spur the popularity of its games and therefore earn massive game-driven revenues. In Indonesia, “that’s not the case because we didn’t have enough user base for the games to kind of go viral out”, Lee admitted.

Listening to the market
Kakao’s existing games may not be as widely popular in the country as it is in Korea but Lee said that the company is working on discovering what else it can offer beyond messaging and photo sharing. “I think it’s gonna be very different from the games that we offer in Korea, so we’ll be trying to get a feel of what type of content do Indonesians would like to see. It could be games, it could be other services”.

Confirming the trend of mobile consumers using multiple apps and services that deliver similar purpose or experience, Lee said, “Indonesians are very willing to share information through various services and I think we’re at the stage where people are downloading various services and kind of trying them out”.

“Each service has its own unique merit and use and [consumers are] in the process of making a judgment on which messenger they prefer, and we’re at the point where we’re trying different things and see how people react to those different services”.

Competing with Tencent’s WeChat
Despite having WeChat, which is huge in China and apparently growing rapidly across the world, Tencent is a major investor in Kakao. “On the surface it seems like we’re a very odd couple but if you scratch level down there’s more room for cooperation”, Lee said. “Tencent grew from QQ, the PC messenger service so they have that insight into growing a messenger service into a global company and we’d like to learn from that.”

Lee sees a number of ways both companies can work together, “There is a lot of synergy to be gained”. “Some parts we compete, some parts we complement each other”.

Previous Story

Aplikasi Vine Tambah Dukungan Atas 16 Bahasa Baru, Termasuk Indonesia

Next Story

Berupaya Datangkan Profit Dari BBM, BlackBerry Akuisisi ScrOON

Latest from Blog

Don't Miss

Pentingnya Industri Telekomunikasi untuk Kembangkan Industri Game dan Esports

Nilai dari industri game meroket selama pandemi COVID-19. Bahkan setelah

Niko Partners: Pertumbuhan Industri Game Indonesia di 2023 Melambat

Game menjadi salah satu industri yang justru tumbuh selama pandemi