Kakao Takes Direct Control of Commerce... Initiates Internal Organizational Restructuring

Jeongsina, Kakao CEO Nominee, Shares on Open Talk
Commerce CIC Integrated into Headquarters... Emphasis on Management Over Speed

Kakao is reorganizing its shopping division, which was operated as a company-in-company (CIC), to be directly managed by the headquarters. After restructuring its affiliates through successive CEO changes, Kakao has initiated a reorganization of its headquarters.

According to the IT industry on the 4th, Jeong Sin-ah, Kakao's CEO-designate and head of the Renewal Task Force (TF), held an open talk with employees last week to share this information.

The Commerce CIC is responsible for shopping businesses such as KakaoTalk Shopping, Gift, and Kakao Shopping Live. It became an independent e-commerce subsidiary in 2018, was merged back into the headquarters in 2021, and then operated as Commerce CIC. In January 2022, Commerce CIC was absorbed into the Commerce Division, but it was reorganized back into a CIC system in August of the same year. It is a core business division within the group, led by Kakao CEO Hong Eun-taek and former CEO Namgung Hoon.

The decision to reorganize Commerce CIC to be directly managed by the headquarters again signifies a focus on 'management.' Until now, Kakao created CICs internally to grant autonomy and accelerate decision-making. After securing independent viability, these units were spun off to increase the number of affiliates. Kakao Enterprise and Kakao Healthcare are representative cases that were created as CICs and later spun off.

However, due to concerns over overexpansion and excessive autonomous management, Kakao appears to have chosen a direct management approach. Accordingly, the co-CEOs of Commerce CIC, Lee Hyo-jin and Yang Ho-cheol, are also expected to be replaced.

The internal reorganization of Kakao is expected to accelerate starting with Commerce CIC. In last week's open talk, CEO-designate Jeong outlined the big picture of Kakao's direction for change. They discussed organizational restructuring aimed at increasing work immersion and efficiency. An internal source said, "Although it was a session to share only the broad direction, significant changes are expected going forward."

A Kakao representative stated, "It is difficult to disclose specific details such as the detailed contents of the organizational restructuring."