Google’s anti-trust case, in EU and Korea

EU’s decision that Google violated antitrust law by abusing its dominant power backlashes against Korean Fair Trade Committee (FTC).

EU accused Google of setting its own search engine as a default search tool on Android devices and pre-installing Google’s own apps such as Maps and Play Store, which effectively blocked the competition.

That’s exactly the same complaint Korean domestic  internet companies filed for KFTC. After a few years of investigations, KFTC decided that Google was not guilty of antitrust law in Korea in 2013.

Some Korean media opened fire for KFTC arguing that it should have accused Google of antitrust activities. KFTC was not strong enough in pushing Google for levying punishment, the sentiment goes.

At that time, KFTC found Google not guilty because smartphone users can switch to other search engines or apps with a single touch. The fact that Korean tech companies including Naver, Daum and Kakao continuously increased its presence despite the Android’s dominant in Korean market also influenced KFTC’s decision.

(Though they all had hard times in competing with mobile super-power Google, and Daum got caught by Google in terms of the share of mobile search queries.)

It’s hard to tell whether Google was fair or unfair enough in playing their mobile game.

But one thing for sure is that Europe has nothing to lose even if they charged Google or get some burden for tech companies.

While there are no European tech companies to compete with Google, Microsoft or Apple, Korea has some strong domestic alternatives for them. Naver is a far-front leading search engine with more than 70% of market share. Kakao attracted virtually every Korean smartphone users with its mobile messenger KakaoTalk.

And Samsung, hands in hands with Google, emerged as a number 1 smartphone manufacturer both in Korean and global market.  Those are among some reasons KFTC made a different decision 3 years ago with that of EU today for virtually identical issues.

Chances are KFTC may review their decision in comparison with EU, it doesn’t seem Korean tech companies will be very interested in the antitrust issue.

Naver is a time-proven leader in a search engine and busy for expanding its Line business to abroad. Kakao is struggling for its new on-demand drive, and Daum was acquired by Kakao. No time for looking behind?

Can Coupang survive e-mart?

Coupang is a Korean e-commerce unicorn. Now the legacy retail giants take action to kill the unicorn.

Korean biggest retailer e-mart declared war for the lowest-price for diapers and baby formula, directly targeting Coupang.

Starting as one of the hundreds of local flash deal companies on 2010, and now being backed by 1 billion dollar investment from Softbank, Coupang has been disrupting Korean e-commerce and retail market.  

Standing out of harsh competition among major Korean ‘social commerce’ companies, it emerged as the leader of mobile commerce as the smartphone penetration skyrocketed. It transformed itself quickly from a Groupon-like social commerce to an amazon-like mobile commerce.

Coupang focused strategically on diapers and few everyday commodities with the lowest price and ‘Rocket Delivery’ (one-day delivery service for selected items) to earn enthusiastic customer base among young mothers. Young baby caring ‘moms’ who have no time to go shopping or even turn on a PC for online shopping were the target customers for Coupang. The moms turned to smartphones on their hands and logged in Coupang app to order diapers delivered to the doors of their home.

Diapers were once the most sold item in e-mart. Now they buy diapers from Coupang. Last year, diaper revenue of e-mart plummeted 26%, while Coupang became the No. 1 destination in your mind for buying diapers. .  

It is just one of many indicators that major retailers are left behind the e-commerce players.

So called ‘mart’ (Korean equivalent to Wal-Mart or Tesco) including e-mart, Homeplus and Lotte Mart was the place you go shop for everyday commodities and occupied largest portion for a domestic retail market.

Their revenue ceased to grow while e-commerce still outpaced traditional retailers. According to Statistics Korea, the amount of money spent for online shopping was bigger than that of marts last year for the first time.

So the legacy retail giants began to feel threatened now. President Shin of Lotte, a conglomerates whose business spans from a department store and mart to CVS and TV home shopping to sweets and beverages, urged his executives to innovate “like coupang.”

And it took another bold action. It began ‘SSG delivery’, its own one-day delivery service. You can get your product the day you order if only you ordered it before 3 pm. For this, e-mart opened its second online commerce-dedicated distribution center at Gimpo, near Seoul.

You can see it aims for Coupang’s Rocket Delivery.

So, e-mart is competing Coupang in two areas where Coupang is dominating – lowest price for flagship products young moms care and delivery.

Who will win?

Coupang preempted market with convenient mobile experiences and Rocket Delivery. It played better at online commerce compared to legacy retailers.

e-mart has deeper pocket. It has more resources and stronger brand power. It just began to step into online commerce, so it’s hard to expect the potential of giant.

coupang emart war
from Korean Joongang Daily Retailers wage battle over diaper prices

Once e-mart opened the new era of retail by introducing the Western style retailers. Now Coupang is about to put mobile commerce into a mainstream consumer market, which is the last thing e-mart wants to see. So that’s why the war begins.  

 

Kakao wants your routes with the launch of navi app

Kakao wants to know your routes with the launch of new navigation app ‘Kakao Navi’, and connect them to serve you while you transport.

Kakao, the operator of Korean No. 1 mobile messenger Kakao Talk, fully integrated its subsidiary mobile navigation app ‘Kim-gisa’ into Kakao family apps.

They revamped the design of Kim-gisa, which means ‘chauffeur Kim’ in Korean and whose developer LocAndAll was acquired by Kakao for 62.6 billion Won (about 50 million dollars) for 100% stake last year.

Now Kim-gisa got that friendly Kakao-themed skin and relaunched as ‘Kakao Navi’.

 

카카오내비
Kakao Navi

 

While you can see the familiar Kaka0-yellow and Kakao Friends characters on your new Kakao Navi, the app lets you share the destinations and arrival times.

Kakao said on Wednesday that its best feature is a system that allows users to share information. The company said Kimgisa’s traffic information collection system gathers real-time details, including ongoing events and traffic conditions. Users can share their current location, destination and expected arrival time to people registered as KakaoTalk friends. Through KakaoTalk, friends can receive texted directions to a destination without downloading the navigation app.

– Kakao joins navigation app market with Navi, Korea JoongAng Daily

The social features (, which they like to promote with such PR terms like ‘share’ and ‘openness’) do not seem very new and jaw-dropping.

We want your routes

Still it’s worth noting that they launched Kakao Navi while they try to get into your ‘move’ with transportation-related mobile apps like Kakao Taxi and expected Kakao Driver. They are part of Kakao’s O2O strategy aiming for connecting everyone and everything on and offline.

Taxi-hailing app Kakao Taxi was a great success Kakao has long awaited for years, hitting 57 million accumulated calls and 210 thousand driver users in  9 months since launch. The app used then-Kim-gisa for its navigator for drivers and Kakao Navi now receives real-time traffic information from taxis that use Kakao Taxi.

Kakao is also expected to launch Kakao Driver as early as May, which connects private one-time drivers with those who drink at dinner and want to come back home with their car.

To get what it is, you need to understand so-called ‘substitute driver service’ first. Say you drink a lot at a party, and have a car with you. You don’t want to drunk drive and your driver’s license suspended.

You can call the substitute driver service company and they connect you a driver who will drive your car and take you at backseat home. As a country famous (or notorious) for its exciting nights, the market for substitute driver service is estimated as much as 3 trillion Won (about 24 billion dollars), composed of thousands of small companies and tens of thousands of drivers.

It’s part of Kakao’s O2O strategies

With these transportation apps, Kakao expects complete dominance on your moves and routes. They know where you are, and where you are going when.

The real-time data collected from these apps increasingly improve not only the accuracy and efficiency of individual dispatch but also Kakao’s overall understanding of movements of people. You know it’s precious.

Kakao now wants to make money from so-called O2O or on-demand services. Knowing your routes is essential to facilitate O2O services, which need logistics and last-mile contacts.

Kakao Driver is also expected to earn rapid money Kakao needs. Some analysts estimate that Kakao would earn 100 billion Won (about 80 million dollars) per year through matching fee when it begins the substitute driver business.

Kakao didn’t monetize Kakao Navi and Kakao Taxi, but Kakao Driver is easy to monetize because everybody is already so accustomed to paying for substitute drivers.

It may be a breeze for Kakao, whose revenue went down last year with the decline of mobile game and advertisement business.

It’s revenue in the October to December period edged down 4.85 percent to 241.7 billion won ($202 million) from 254.046 billion won ($212.41 million) in the fourth quarter of 2014. Net profit plummeted 80.2 percent to 10.2 billion won ($8.55 million) in the 4th quarter 2015, reduced to a fraction of the net 51.7 billion won ($43.22 million) in the same quarter 2014. 

Update. Kakao acquired 100% share of Park Square for an undisclosed amount of money, JoongAng Daily reported.(Korean article)

Park Square operates Park Here app which offers parking lot information and reservation among Korean big cities. It helps the parking lot to raise the occupancy rates by connecting drivers and parking lot with vacancies.

Kakao’s another move for getting into a part of ‘transportation’ area. Now it covers navigation, taxi, substitute driving and parking business, almost every aspect of vehicle transportation.

A possible scenario goes like this where Kakao Navi guide you to your destiny and near the destination you can see the information of parking lots nearby provided by Park Here. If you drink at the dinner, you can call private driver with Kakao Driver.

Kakao did not reveal its plans for a newly acquired company or how much it spent for acquisition.

 

Samsung to restructure Japanese operations

Samsung to restructure Japanese operations.- the Korea Times

Samsung Group, the nation’s leading conglomerate, is changing the way it conducts business in Japan to substantially boost performance. 

The Seoul-based group said Sunday that its subsidiaries in Japan will now operate independently from each other. Previously all 18 Samsung affiliates existed under the same umbrella of Samsung Japan. 

 

Well, Samsung now thinks its time to aggressively try to penetrate Japanese market. Anyway, it’s No.1 electronic company in all major markets but Japan.

Another point here is that Samsung Electronics will set up two separated branches in Japan. One for consumer products including TVs and smartphone, and the other for components and parts including semi-conductors like DRAM.

Samsung Electronics has a wide product portfolio ranging from memory semiconductors and LCD panels to flat panel TVs, smartphone and digital cameras. Its two completely different business domain supplement each other and help Samsung to maintain robust revenue regardless with market fluctuation.

But their customers – global electronic giants – are increasingly concerned to the fact that Samsung Electronics is their major supplier and their competitor at the same time. What if the components division leaks the critical information they obtain to consumer products division? They are under the same umbrella, anyway.

For example, Samsung provides application processors, memory chips and batteries to Apple, while its Galaxy series competes directly with iPhone.

So there has been a prospect of possible spin-off of Samsung Electronics to clear these suspicion. And Samsung chose to operate two separate division in Japan. See if it will be the case for Samsung Electronics headquarter in Seoul

Galaxy S3 will be unveiled in April

Galaxy S3, the newest product of Samsung flagship smartphone line-ups, will be launched in London event held in April, according to a report.  The report said Samsung would begin to ship the products shortly after the launching event.

Samsung did not unveil the much-expected smartphone at MWC 2012 held in Barcelona, Spain last week. Mr. Choi, the CEO of Samsung Electronics, said they did not launch the Galaxy S3 on MWC to prevent the copycats.

There are rumors that Samsung is still testing which quad-core application processors they’ll use.

This is how you prove that playing game turns youth violent

MBC did a news story on “game violence”, focusing on how violent games can make children, well, violent. To illustrate that point, the program conducted an experiment: in a net cafe, it had the power on all the computers shut off simultaneously. The segment showed how gamers in the cafe began to speak in loud voices and use bad language. Those in the net cafe were paying customers, so of course, they’d be pissed.

Yet, the report pointed out that the reaction was filled with cussing, adding, “They’ve been transformed into the violent characters they are playing.”

The Stupidest News Report Ever? | Kotaku Australia.

You may not believe it, but it did happen.

Enraged viewers are rushing to bulletin board of MBC webpage to leave comments that point out the flaws of the ‘experiment’ (if you can call it an experiment).

And literally tons of parody for the news segment are flooding on blogs, communities, and internet forums. Some examples are:

– two old men are playing the game of go, and you turn over the go board to show the influence of go to aggressiveness. Old men are upset and use bad languages, and you prove that playing go turns the old men violent.

– Student are taking English listening  comprehension test for university entrance exam, and you turn off the power of the speaker to show the influence of entrance test to aggressiveness. Students get upset, and you prove that taking exams turns the student violent.

– Reporters are hurrying up to write articles to meet the deadline, and you pull the plug from their PC to show the influence of journalism to aggressiveness. Reporters get upset and use bad languages in loud voice, and you prove that writing articles turns reporters violent.

and thousands of more…

IMC Games, the developer of Korean classic MMORPG ‘Ragnarok’ released the parody video for the news report using the ‘MineCraft’ game as producing tool.