Korean IT companies ready to take on global giants

“Google has made enormous investment to enter the social commerce market but seen little success. We’re not threatened at all.” - Ticketmonster CEO Shin Hyun-seong

“Facebook has failed to top the market in seven countries including Korea. Naver Cafe is the leader in the Korean market. The new Naver Cafe service will come out this year.” - Naver CEO Kim Sang-hun

The Korean IT suffered an identity crisis in 2010 with a major wind of change: the smartphone. This was because Twitter changed the Korean political landscape, Google spearheaded the Korean market with Android-based smartphones, Apple opened a new chapter with the iPhone, and Facebook emerged as the world’s top social networking service. Koreans combined the names of the four IT giants to coin the term "TGiF (Twitter, Google, iPhone and Facebook)."

Two years later, new companies have emerged. Smartphones provided an opportunity to KakaoTalk, an instant messenger service. KakaoTalk has since gained huge popularity and gained up to 32 million users around the world as of the end of last year.

Ticketmonster, a social commerce company, grew into a large retailer with a monthly transaction volume of 34.9 billion won (30.9 million U.S. dollars) last month alone. It was founded by Korean students in the U.S. and those at the Korea Advanced Institute of Science and Technology in May 2010.

NHN’s Naver search engine accounted for 65 percent of the Korean mobile search market as of last month. It was expected to lag behind mobile search engines as Google embedded its search engine as a default setting in iPhones and Android phones. Contrary to fears, however, Korean IT companies are creating new value beyond TGiF. They beat the notion that small Korean companies cannot survive competition against large global counterparts, and are instead growing because of the competition.

Korean IT companies have come to dominate areas where global companies cannot reach. KakaoTalk provides a social networking service that helps the Korean entertainment industry and could spread throughout the world, and Naver has set the goal of offering global service in the Korean language for Korean expats across the world.

The Dong-A Ilbo has interviewed the CEOs of key Korean companies heading for a world beyond TGiF, including those of KakaoTalk, Ticketmonster and NHN.

sanhkim@donga.com