Half of Golfers Use It... Kakao Dominates Reservation Apps by Offering 'Free' Service

Kakao VX Captures 50% Market Share in 'Golf Reservation App'
Rapid Growth Driven by Free and Convenient Interface

[Asia Economy Reporter Byeon Seon-jin] 'Kakao Golf Reservation' is securing a solid lead in the golf reservation application (app) market.

Although it has just passed three years since its launch, its advantage of being 'free' combined with a convenient interface has propelled its market share well beyond half.

However, some express concerns that if the oligopoly intensifies, as seen in other platform markets, negative effects such as rising service prices may occur.

One in Two Golfers Uses 'Kakao Golf Reservation'... Market Share Continues to Rise

Kakao VX's golf reservation app 'Kakao Golf Reservation,' launched in June 2019. [Image source=Kakao VX]

The representative golf reservation apps currently available in the market include 'Kakao Golf Reservation', 'Golfzon T Scanner', 'XGOLF', and 'Golfmon'. Among these, 'Kakao Golf Reservation' is a latecomer launched just over three years ago in June 2019 by KakaoVX, a subsidiary of Kakao.

However, 'Kakao Golf Reservation' quickly outpaced competitors to secure a firm first place. According to an analysis by Asia Economy using the big data platform 'Mobile Index', as of the end of June, the number of users of 'Kakao Golf Reservation' (Android basis) reached 464,654, accounting for a 51.0% market share. This is more than double the 199,017 users (21.8%) of the second-place 'T Scanner'. Following are Golfmon with 140,096 users (15.4%) and XGOLF with 107,664 users (11.8%).

The market share of 'Kakao Golf Reservation' continues to steadily increase. Notably, last month, considered a golf off-season, while the total number of golf reservation app users decreased, the number of 'Kakao Golf Reservation' users (52.5%, 458,182 users) actually increased. According to Kakao's own data, the number of reservations and members in August rose by 46% and 45% respectively compared to the same month last year. A KakaoVX official stated, “The reservation rate through Kakao Golf Reservation is setting new growth records every month.”

46 Million KakaoTalk Users + Convenient Interface... Dominance with 'Free' Policy

The biggest factor behind Kakao's rapid domination of the golf reservation app market is 'KakaoTalk', which boasts 45.66 million users. Along with a convenient interface gaining popularity, the user base is expanding quickly. In fact, 'Kakao Golf Reservation' is designed so that the entire process from reservation → travel → check-in → payment → return home can be completed through the Kakao platform. Recently, in collaboration with ‘Route52 Golf Club’, a ‘self check-in’ feature was added. According to KakaoVX, this self check-in feature is so popular that 8 out of 10 users of the related app use it.

Earlier, since April last year, they also introduced a ‘tee time subscription function’ that allows users to apply in advance for their desired date and time even before the golf course’s designated reservation date.

Kakao's ‘free commission’ policy is also an undeniable factor behind its growth. Existing golf reservation apps charge a commission of around 10,000 KRW per reservation to golf courses or consumers.

In contrast, the industry analyzes that Kakao was able to rapidly increase users through its free policy. Because there is no reservation commission, golf courses are allocating more tee times to Kakao. A golf course official said, “For paid apps, golf courses incur commission costs of several million KRW per month,” adding, “This is why more tee times are allocated to free apps.”

On the other hand, voices expressing concerns about the negative effects of Kakao’s oligopoly have also emerged. Professor Eunhee Lee of Inha University’s Department of Consumer Studies diagnosed, “When a platform’s market share becomes high and new competition no longer occurs, resulting in a monopoly or oligopoly, the costs borne by suppliers and consumers can increase.”