Louis Vuitton Calls Kakao... Mobility Corporate Market Heats Up

Mobility Industry Expands B2B Market
Provides for Company Work and Client Entertainment... Popular with Local Governments and Military Units
Kakao Corporate Clients Grow Ninefold in Two Years... Companies Benefit from Tax Savings

[Asia Economy Reporter Bu Aeri] Luxury brand Louis Vuitton recently supplied about 200 'Kakao Black' vehicles as VIP customer protocol cars at its new product launch event. Previously, vehicles were secured through rental car companies, but this was the first time Kakao services were used. VIP customers were reportedly very satisfied as high-end sedans driven by professionally trained drivers were provided.

Recently, cases of companies using Kakao or Socar vehicles instead of corporate cars have been increasing. As mobility companies' corporate car operation methods become more sophisticated, there are many benefits for corporate customers. Kakao and Socar are expanding their business areas from B2C services aimed at individual customers to B2B (business-to-business) services.

◆ Mobility B2B market grows ninefold in two years = According to Kakao on the 8th, the number of companies subscribed to 'KakaoT for Business' has increased ninefold in two years. When the service was launched in February 2018, 400 companies had contracts, but now 3,700 companies are subscribed. The main customers are distribution industries with frequent fieldwork, consulting, and construction companies. A Kakao official said, "We focused on B2C business until now, but launched B2B services from 2018, and plan to provide services to more companies this year."

When a company contracts 'KakaoT for Business,' it can receive three services (business taxi, business chauffeur, business black). Business taxis are mainly used for commuting or fieldwork. Some companies provide business taxis as a welfare benefit for overtime work. Business chauffeur is mainly used for customer entertainment for sales purposes. The high-end model Kakao Black is mostly used for protocol. According to Kakao, Company A provides welfare by having new employees take Kakao Black for their first commute, and Company B provides Kakao Black as a wedding car when employees get married.

Socar Business is also seeing an increase in corporate customers. Socar Business is a service where employees of a company can rent Socar vehicles nationwide by registering as a corporate member and registering a corporate card. According to Socar, the number of newly added companies increased from 4,346 in 2018 when the service officially started to 6,949 as of 2020.

In Socar's case, it is popular among local governments and military units where long-distance business travel is frequent. The Navy Headquarters has been using Socar for military officials' work since December last year. Due to positive response, there are plans to expand to all navy units starting this year.

◆ Significant tax reduction benefits for corporate customers = The growth of the corporate mobility market is partly due to cost reduction effects for companies. It reduces operating costs such as driver salaries, parking fees, and vehicle maintenance costs, and companies can also receive tax benefits provided by the government. When companies use business taxis, they can receive up to a 20% reduction in the 'Traffic Inducement Charge' imposed on building owners under Article 36 of the Urban Traffic Promotion Act. In fact, Company C receives an annual tax discount of 180 million KRW by using KakaoT business taxis.

Socar Business receives tax benefits depending on local governments. In Seoul, if a company secures some Socar vehicles in its company parking lot, it receives a 'shared car usage' traffic inducement charge reduction benefit. Providing one or more shared car parking spaces or using shared cars grants a 10% discount on the traffic inducement charge.

Because of this, the mobility industry expects corporate customers to increase even faster. 'KakaoT for Business' is preparing various customized services for companies. Socar Business also runs monthly discount events for corporate customers. Kakao plans to launch a business navigation service in the first half of this year. A Kakao official explained, "Using business navigation automatically provides proof of travel distance and usage details, so individuals do not need to do separate work for settlement."