Kakao Targets North America and Japan with K-Fashion... Expanding Global Reach through Commerce

Zigzag Global Service Launching This September
Expanding Overseas from Content to Commerce

[Asia Economy Reporter Yuri Choi] Kakao is targeting North America and Japan with Korean fashion and beauty products. One year after acquiring the fashion platform 'Zigzag,' it is expanding its stage globally. While Kakao had previously entered the global market mainly through content businesses such as webtoons and web novels, it is now diversifying its business into commerce.

According to the IT industry on the 23rd, KakaoStyle will launch the Zigzag global service in September. Pre-testing has been underway since July, and they are currently recruiting global sellers.

When sellers register product information on Zigzag, the automatic translation feature creates product information in English and Japanese automatically. For orders coming from overseas, sellers only need to send the products to domestic logistics centers. Kakao supports shipping, customer service (CS), marketing, and more. Kakao has decided not to charge sellers any separate overseas sales fees for the time being. They plan to expand the market first and then decide on operational plans such as fees in the future.

The first targets are the United States, Canada, and Japan. North America and Japan are the countries with the largest share of reverse direct purchase export volume. This is because the popularity of K-content has boosted sales of K-fashion and K-beauty products as well.

According to KOTRA, last year’s reverse direct purchase export volume reached $860 million (approximately 1.1 trillion KRW), marking a record high. The largest share was Japan, where cosmetics reverse direct purchases nearly doubled compared to the previous year. The United States surpassed China to take second place. It is analyzed that exports increased mainly in these countries, which have high awareness of Korea and developed online malls.

A KakaoStyle official explained, "Japan has experience with global services through the app NowNow since 2019," and added, "Demand for K-fashion and K-beauty has also been confirmed to be high in North America."

Kakao acquired Zigzag in April last year to strengthen its commerce business. Subsequently, it merged with the Kakao Style business division to launch KakaoStyle. Although the exact acquisition price was not disclosed, it is known to have been recognized with a corporate value approaching 1 trillion KRW. Since then, Kakao invested 100 billion KRW to support business expansion. Zigzag began selling beauty products in April this year. Last month, it officially launched the Life section, selling interior products such as furniture and lighting, as well as digital electronics, expanding its range from fashion to beauty and lifestyle goods.

While expanding product categories, it also focused on brand marketing. On the 22nd, it revamped its brand identity (BI), expressing its ambition to evolve from personalized product recommendations to a service that helps discover styles.

Kakao’s strategy is to make commerce a new growth engine in the global market. Until now, content sectors such as webtoons, web novels, and games have led global business, but they are broadening their scope to commerce and other areas. Kakao’s overseas sales in the first half of this year reached 761.3 billion KRW, with the share of total sales surpassing 20% for the first time. In the second quarter, 80% of content transaction volume came from overseas, showing results centered on content.

To raise the overseas sales ratio to 30% by 2024, business diversification is necessary. Commerce, in particular, is a field with notable growth potential and synergy with K-content.

A Kakao official said, "Most overseas sales come from content," adding, "Commerce is not yet at a meaningful level, but it is an area with expected growth potential."