[W Forum] Active Support Needed for Platforms' Global Market Expansion

The first items South Korea ever exported were dried seafood and agar, exported to Hong Kong in 1948 by Hwashin Trading Company. From socks and wigs in the 1970s, through Middle Eastern construction in the 1980s, to today’s automobiles, semiconductors, and smartphones, the advancement and diversification of exports vividly demonstrate our relentless struggle for survival amid scarce resources and scale limitations.

This struggle continues even in today’s global economy. A particularly crucial coordinate is undoubtedly platform business. Most of the world’s top 20 companies by market capitalization are platform companies, and it is no exaggeration to say that the dominance of the digital economy depends on the success or failure of platform businesses.

However, the global competitiveness of platform companies differs from traditional product exports. The value of platforms lies in humanity’s ‘connection.’ While it took 12 years for 100 million users to be reached via high-speed internet in China, and even smartphones took 3 years, the representative platform business TikTok achieved this in just 100 days. Facebook connects 2.38 billion people, and YouTube connects 1.8 billion. China’s TikTok (500 million users) and Weibo (465 million users) are also chasing ‘connection’ to dominate the global platform market.

Recently, the performance of our companies in platform business is noteworthy. Overcoming the limitations of hardware-centered product categories, independent brand platform companies are raising their status in the global market. In February, Coupang was listed on the New York Stock Exchange and was once valued at up to 100 trillion won. Hyperconnect, which operates Azar, a native Korean video chat application, successfully completed a global merger and acquisition worth around 2 trillion won. Furthermore, Vision Fund led by SoftBank Chairman Masayoshi Son confirmed a 2 trillion won investment in Yanolja, a lodging and leisure platform. It is reported that Yanolja will challenge a listing on the NASDAQ in New York as early as two years from now.

Some companies have challenged overseas markets and paved the way for overseas listings. In 2016, Naver simultaneously listed its subsidiary Line on the Tokyo and New York stock exchanges. Although Line was delisted after merging management with Yahoo Japan, the value and potential that the Line brand left in the platform market continue. Naver Webtoon, connecting 72 million global users, is aiming for a U.S. listing, and Zepeto, a metaverse platform with over 200 million global subscribers, is also operated by Naver Z.

Traditional key sectors of our economy such as automobiles and shipbuilding have grown strategically in close relationships with the government, receiving direct and indirect protection. In contrast, platform businesses have grown organically in the market without government leadership and have entered international markets. Platforms are the key products of the digital economy, and Korean platform companies are just beginning to take their first steps in the global market.

However, there is still a long way to go. For domestic policymakers accustomed to a government-led economy, platform business always seems to be treated as an underdog. Instead of policies and laws that support and foster growth, unprecedentedly strong regulatory bills are being competitively introduced. There are already over 3,000 platform regulations. The 21st National Assembly, which has been in session for just over a year, has introduced more than 10,000 bills, most of which are regulatory, with increasing scope and severity of penalties. This is a very bitter situation. As the presidential candidates for the next government begin to be scrutinized for their national governance plans, I hope that generous support and encouragement for the digital platform economy will definitely be reflected.

Kim Hyun-kyung, Professor, Graduate School of IT Policy, Seoul National University of Science and Technology