# Samantha had a big fight with her husband this morning and badmouthed her husband online with her SNS friends. To uplift her mood, she went to a hair salon in the neighborhood to have her hair permed. Letting a hair stylist tend her tresses, she finished her grocery shopping online. Still unable to let off the steam, she headed out to a nail art salon nearby to have her nails flamboyantly decorated.
On her way home, she suddenly asked herself “What good is it to save all the money by living carless and thus overworking my legs” Samantha hopped in a cab she booked using a taxi app. She spent 150 dollars in total. She thought she splurged on personal grooming. She was up to her neck in a pool of regrets.
Many of us may have had the experience of resorting to retail therapy to buy your way out of a bad mood. Then, what if someone already knows your propensity to impulse-buy and offers services managed to your liking
Judging from the recent moves made by Korean internet company Daum Kakao, such services are very much likely. Daum Kakao has been rapidly “deviating” from its online portal-based business to venture into other sectors, including, taxi service, designated driver service, game, online-only bank, SNS, beauty, contents (e.g. music, entertainment), etc.
Daum Kakao wasn’t shy about its expansionist ambitions. “Through on-demand services that are made available to users anytime anywhere, we will open up a bona-fide mobile era where all the real economic activities can take place via smartphones,” said Rim Ji-hoon, CEO of Daum Kakao. On-demand services are ‘the link between the mobile world and users’ and the real economy refers to ‘money.’
Let’s look into exactly what Daum Kakao is up to. Korean futurist Choi Yoon-sik wrote in his book ‘Insight into Futures’ that “Analyses of data produced by customers’ use of smart devices and online activities offer us insight into their shopping patterns and habits, such as their hangout places they frequent and their favorite products and services. Big data analytics is another medium used to explain the world; and when we can see through it, the future becomes visible.”
Daum Kakao has gathered information on consumers’ consumption patterns scattered here and there through the means of mobile technology and tapped into vast pools of information in providing each service. Daum Kakao is taking full advantage of its ownership of big data in its search for their future sources of revenue.
That’s why DaumKakao’s each service requires users to sign up. Hence Daum Kakao’s push for diversifying into new sectors should be understood as part of its endeavors to discover new cash cows for the future, not an approach to achieve short term revenue targets.
As a matter of fact, it seems that DaumKakao cannot care less about short-term profitability. Daum Kakao has lavished money on marketing its new businesses (e.g. O2O (online to offline) connecting services) and M&As in order to find new growth engines. New services including Kakao Bank, Kakaohairshop and Kakaobeautyshop are innovative, but it is uncertain whether they can lead to sustainable revenue creation.
What’s more, there’s a large cloud hanging over its game business, which had been on a roll, as more established game companies drift away from the Kakao platform to launch their games on their own. On top of that, Daum Kakao had to raise 900 billion won through external financing to buy control of MelOn, South Korea's top music streaming service provider. Though Daum Kako says that it will increase revenue through the content business, uncertainty, some say, looms over its revenue model.
When it comes to economic democratization and invasion of privacy, there are more problems. As Daum Kakao’s services increasingly have relevance to our daily lives, they raise concerns over invasions of privacy and pose a threat to mom-and-pop stores.
In relatively small markets like designated driver service and beauty salon, the Internet mammoth is getting a commission for bringing in customers. Thus, Daum Kakao’s entry into such markets is in for an angry backlash from owners of small businesses.
On Feb. 1, the South Korean government announced that it would go for early disclosure of government data in 22 sectors, deemed to have an impact on industry and our daily lives, in a bid to rev up the big data industry.
Announcing such a plan, the government pinned high hopes on job creation driven by the big data industry. However, some voice their fears over the possibility of small business falling prey to Internet giants wielding big data weapons of their own.
Dystopian novel “1984,” George Orwell's chilling prophecy about the future, furnishes insight into the consequences of information monopoly through fictional character Big Brother. Is it just wishful thinking that Daum Kakao could serve as a barometer of the nation’s opening of big data and big data policy
