Kakao and SKT Enter Parking Business: A 'War Without Gunfire'

Kakao T Parking, Parking Lots Quadrupled in 2 Years
Considering Direct Operation Beyond Partnership Parking Services
Expanding 'T Map Parking' Partnerships... Targeting 700 This Year
Emphasizing 'Service Features' to Directly Address Inconveniences

[Asia Economy Reporter Buaeri] Choi Jung-mi (33), who lives in Gwangmyeong-si, Gyeonggi-do, recently resolved her parking worries using KakaoT parking service during her overseas trip. Choi said, "When you search for the desired location on your smartphone, nearby parking lot information appears, and after entering vehicle information, you can make a reservation," adding, "Sometimes they offer discount coupons, and automatic payment confirmation through KakaoTalk is convenient."

The information and communication technology (ICT) industry is waging a silent war to expand the parking business. Kakao is moving beyond providing services through partnerships with existing parking lots to considering operating parking services themselves. A Kakao representative said, "Currently, parking lot operations are left to the autonomy of partner parking lots, but in the future, we are considering directly managing parking services by receiving business consignment from parking lots." SK Telecom also plans to expand its service areas by increasing collaboration with local governments.

◆ Kakao and SKT Enter the Parking Business = According to Kakao Mobility on the 28th, there are currently 1,600 parking lots partnered with the 'KakaoT Parking' service in major areas of Seoul and Gyeonggi-do. Kakao Mobility acquired the startup 'Parking Square' and officially entered the business by launching the 'KakaoT Parking Service' in October 2017. The number of partner parking lots, which was 400 at launch, increased fourfold to 1,400 in 2018 and 1,600 in 2019 over two years.

Collaboration with local governments is also steadily increasing. Currently, partnerships have been established with Seoul, Bucheon, Hanam, and Seongnam cities in Gyeonggi-do, as well as Jeonju city in Jeonbuk. A Kakao Mobility official explained, "We plan to further expand services with major local governments and nationwide airports, KTX stations, and department stores." They are preparing to launch services at 10 airports, including Incheon International Airport Terminal 1 and Gimhae Airport.

SK Telecom launched 'T map Parking' in June last year together with its subsidiary ADT Caps. Users can use services such as payment at directly operated parking lots by ADT Caps and partner parking lots, as well as advance settlement through the application. While Kakao Mobility's strength lies in its 'platform,' T map Parking emphasizes service functions that directly resolve inconveniences. As a latecomer, T map Parking's partnered parking lots increased from 100 at launch to 370 currently, with a goal of 700 this year. They are also pursuing memorandums of understanding (MOUs) with local governments other than Suwon city.

◆ Addressing 'Parking Difficulties' and Preparing for the Autonomous Vehicle Era = Kakao and SK Telecom are focusing on the parking business because they believe solving parking difficulties will become a significant market in the future. Although the overall parking lot availability rate in Seoul is 132% (1.32 parking lots per vehicle), 'parking difficulties' still account for a large portion of complaints in Seoul. The socio-economic cost caused by illegal parking and stopping amounts to 4.9 trillion KRW annually in Seoul alone, making parking difficulties a social issue.

The industry views the parking difficulty problem as stemming from the failure to properly utilize 'available parking spaces.' A Kakao Mobility official said, "By applying ICT to parking lots to share and connect them, realizing 'smart parking,' we can significantly alleviate parking difficulties." SK Telecom also explained, "If we provide services that satisfy both parking demanders and suppliers, parking difficulties will be resolved."

The market growth potential is also positive. The average daily number of vehicle entries and exits at parking lots partnered with KakaoT Parking steadily increased each quarter from 72,000 in Q2 2019 to 80,000 in Q3 and 100,000 in Q4. T map Parking, which has been launched for less than a year, announced that it has secured about 100,000 subscribers so far.

The industry also believes that parking services will become an important business resource in the upcoming autonomous vehicle era. An industry official said, "The beginning and end of autonomous vehicles is parking. Ultimately, parking will become a basic service," adding, "We are investing in advance to prepare for the future."