Geum Yi

Kakao expanding O2O business to parking service

March 1, 2016
A woman opens Kakao Talk, a South Korean mobile messaging app with more than 60 million users, on her smartphone in Seoul, South Korea. A handful of smartphone apps that began as basic instant messaging services have amassed several hundred million users in Asia in just a couple of years, mounting a challenge to the popularity of online hangouts such as Facebook as they branch into games, e-commerce, celebrity news and other areas. (AP Photo/Hye Soo Nah)

A woman opens Kakao Talk, a South Korean mobile messaging app with more than 40 million users, on her smartphone in Seoul, South Korea. (AP Photo/Hye Soo Nah)

By Yoon Sung-won

Kakao has acquired a mobile parking lot reservation service firm, it said Monday.

The company said that it acquired Parking Square, a startup providing the “Park Here” service, earlier this month. Despite expectations that the company has spent several billion won on the acquisition, it did not disclose the exact amount of money.

“We have acquired a 100 percent stake in Parking Square and it has been decided in the middle of February,” a Kakao official said. “Currently, we are mulling over integration and nothing has been decided on how to connect the service to our existing ones.”

The move came as the company aggressively expands its service portfolio, connecting more than 40 million domestic users of its KakaoTalk platform to diverse transportation-related services from call taxi and mobile navigation to parking.

Based on the diversified services, Kakao is expected to push for online-to-offline (O2O) services to tackle shrinking profitability.

Kakao revealed in its regulatory filing on Feb. 5 that its operating profit in 2015 stood at 88.4 billion won, plunging 49.9 percent year-on-year, mainly due to the decreasing profitability of its mobile gaming platform. Regardless, the company has been actively expanding into new markets through mergers and acquisitions of companies such as LOEN Entertainment, provider of Korea’s top music streaming service MelOn.

Kakao plans to own Parking Square as a subsidiary and let its existing management continue to run the company for a while, like it had done when it acquired Loc&All, a local startup providing the mobile navigation service Kimgisa, last June. Kakao later took over the business rights of the mobile navigation service from its subsidiary, changing its name to KakaoNavi last week.

Park Here is a mobile application service providing location information on over 5,000 parking lots in the capital area and Busan, and reservation services for about 500 of them. As of January, the app has recorded about 300,000 downloads and 150,000 subscribers.

According to Parking Square, the Park Here service generates profit by promoting and attracting drivers to empty parking lots through the mobile platform and sharing the gains with the owners of the parking lots.

Accordingly, Kakao may connect its mobile navigation platform KakaoNavi to the Park Here service, providing drivers with parking lot information around their destinations and helping them easily reserve a space using their smartphones.

Kakao has worked with Parking Square to provide parking lot reservations through the Daum Map service since last April. The mobile map service provides information on more than 3,500 parking lots in the capital area and reservation services for 280 of them. Kakao said it will tentatively continue to provide the service.