Deliver Your Heart – KakaoTalk Gift
There are two local platforms that must be understood before global brands enter the Korean market: Naver and Kakao. In today’s blog post, we will look into ‘KakaoTalk Gift’, a service provided by Kakao. Kakao started with KakaoTalk, a free messenger app in 2010 and has approximately 45 million monthly users as of March 2021. An interesting fact is that about 95% of KakaoTalk users use other Kakao services. Kakao doesn’t simply have KakaoTalk but other services such as Kakao Map, Kakao Taxi and many other O2O (online to offline) services. Additionally, to strengthen their media and contents, Kakao provides Kakao Music and Kakao Story. Among all these services, the most prominent Kakao services are in e-commerce: Kakao Pay, a simple payment system, Kakao Shopping and KakaoTalk Gift. In the following paragraphs, we will take a deeper look at KakaoTalk Gift.
KakaoTalk Gift was launched in December 2010. Kakaotalk Gift is taking 70% of the local gifting market and with only 10 years of history, they reached 3 million KRW of sales this past year. According to Kakao, in 2020, KakaoTalk Gift increased in sales by 52% compared to 2019 and in December 2020, there were 20 million users. With so many users, you may wonder, what kind of service is KakaoTalk Gift exactly? KakaoTalk Gift is an embedded service of KakaoTalk and without the recipient’s address, you can send a gift directly to them. KakaoTalk Gift started as a service that sends mobile coupons within the chat page. However, starting in January 2012, KakaoTalk Gift started a delivery service, so that recipients could receive mobile coupons as well as the products directly. The KakaoTalk Gift service allows the recipient to input their delivery address and with this new way of sending gifts, a new business model was born. Furthermore, due to the COVID-19 pandemic last year, many untact services boomed and KakaoTalk Gift was one of them. Additionally, with various categories in the KakaoTalk Gift main screen, customers can choose gifts from a variety of categories such as occasions or seasons. The rest of the blog post will continue to look deeper into the categories of KakaoTalk Gift.
As the gifting market grows, KakaoTalk Gift is not the sole provider of an online gifting platform, but Olive Young, SSG.COM, LotteON and a variety of others are providing similar services. If this is the case, what made KakaoTalk Gift so successful among the other players? The secret to KakaoTalk Gift’s success was their motto, ‘Delivering Sentiments.’ Along with a gift, the sender can write a short message for free, strengthening KakaoTalk Gift’s execution of the differentiation ‘Delivering Sentiments.’ If it is a birthday of a KakaTalk user, their birthday is shown in their friend’s contact list, providing a very smooth and easy transition to send gifts through KakaoTalk Gift. As the gift is sent in the messaging screen, chatting once the gift is sent is very natural, demonstrating the ‘Delivering Sentiments’, and the fact that it can be done all in one app increases the app’s potential. According to Kakao, they have two main touch points that are important to the customer’s experience. When a gift is sent, the recipient gets a message notification and needs to input a delivery address within a given time period. Once the delivery address is inputted, the brand takes care of the gift delivery. The two touch points that KakaoTalk emphasizes are, first, the message that they got a gift, and second, that the gift is being delivered. And as the ‘sentiments’ are kept alive throughout the delivery process, KakaoTalk Gift is a game changing platform compared to others.
Beyond these basic touch points, categories within KakaoTalk Gift are getting more diverse. Once the button ‘gift’ is clicked, there are five categories shown: home, recommended, best, brands, and gift box. Additionally, on the ‘home’ page there are a variety of themes such as ‘birthdays’, ‘luxury gifts’, or ‘health/fitness’. Each theme displays a variety of products that can be compared by price, and AI curated suggestions to KakaoTalk Gift users. This can be an ideal solution for those who don’t know what to give their friends and family. In the ‘recommend’ category, there are gifts according to every occasion, along with new products recommended just for the customer. In the ‘best’ category, one can see which gifts or gift coupons are trending and sold the most by ranking. Should a user like to see products according to a brand, they navigate to the ‘brands’ category and view brands according to topics such as fashion, beauty, foods, or home. As of last year, KakaoTalk Gift added a luxury category and luxury brand products are available now on KakaoTalk Gift. Products from Tiffany & Co., Gucci, Mont Blanc and many others are available. Users can navigate to the ‘gift box’ category and check gifts received and their wish list.
As explained above, there are a variety of categories in KakaoTalk Gift. There are many brands that have entered KakaoTalk Gift and a wide variety of products can be seen. From a brand’s point of view, accessibility to a large pool of users and a growing market can be advantageous to launch on KakaoTalk Gift. Additionally, many brands are selling ‘KakaoTalk Gift exclusive products’, increasing the brand’s image and making customers feel special due to the exclusivity of the product. In the Korean market, simple payment systems such as Samsung Pay, Naver Pay, and Kakao Pay are used, a must-have consideration for global brands when launching their e-commerce platform. But if a brand would like to enter KakaoTalk Gift, Kakao Pay is included, making payment easier for customers. Since KakaoTalk Gift is growing exponentially, there are various customer data services becoming available. In conclusion, before brands enter the Korean market, they must understand the Kakao service ecosystem.
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