[Exclusive] 'Starting to Escape Deficit'... KakaoStyle Withdraws New Business After 11 Months of Launch

One-Person Shopping Mall Fulfillment Solution 'Jikjakmate'
Service Termination Scheduled for the 27th of Next Month
"Decision to End Business for Service Selection and Focus"

Kakao Style has decided to terminate a new service that was launched less than a year ago. This move is interpreted as an effort to streamline unprofitable businesses amid ongoing losses and increasing burdens from new ventures such as Posty.

According to industry sources on the 25th, Kakao Style notified its partner sellers on the 23rd that the 'Jikjakmate' service will be discontinued. The announced termination date is May 27. Considering that Jikjakmate went through a beta service in May last year and officially launched in June of the same year, the new service is being discontinued after just 11 months.

Jikjakmate is a shopping mall startup solution for individual sellers, providing a fulfillment-type service that supports the entire process from sample purchase to sales, delivery, and customer service (CS). It helps individual sellers easily sell products by joining the platform operated by Kakao Style. After purchasing samples, individual sellers upload product photos to the platform, and sales begin immediately. Kakao Style then handles product packaging, delivery, and CS.

Kakao Style's one-stop shopping mall startup solution, 'Jikjakmate'.
Photo by Kakao Style

Following the decision to terminate the service, new registrations for Jikjakmate were halted on the announcement day, the 23rd. From May 13, sellers will no longer be able to purchase sample products, and product registration will be suspended on May 23. On May 27, sales of Jikjakmate products on 'Zigzag' and 'Fashion by Kakao' will cease, marking the complete end of the service.

Previously, Kakao Style suspended the global business of Zigzag in October last year, temporarily halting 'Jikjakmate Global,' the service for regions including the U.S., Canada, and Japan. With this decision, Kakao Style is also ending the domestic Jikjakmate service, withdrawing from the individual shopping mall fulfillment business.

Kakao Style's decision to withdraw the Jikjakmate service is interpreted as an effort to reduce cost burdens. The fulfillment services supporting packaging and delivery for individual sellers incur significant expenses. Kakao Style recorded a consolidated loss of 19.8 billion KRW last year. Although it succeeded in reducing the deficit compared to 2022 (51.8 billion KRW), it failed to turn a profit.

Moreover, financial burdens increased as investments continued in new businesses such as Posty and technologies like artificial intelligence (AI). In fact, Kakao Style has been focusing on improving profitability, exemplified by the appointment of Choi Hye-ryeong, head of Kakao's finance group, as a non-executive director in January this year.

The decline in users of the flagship fashion platform Zigzag app is also believed to have influenced the service termination. According to app and retail analysis services WiseApp, Retail, and Goods, Zigzag's monthly active users (MAU) last month were 3.27 million, down 16.4% compared to the same period last year. This is about half the MAU of competing fashion specialty malls Abley (8.05 million) and Musinsa (6.76 million) for the same month. An industry insider said, "Female fashion platforms with many Dongdaemun wholesale small merchants see user numbers directly linked to transaction volume, so a decrease in users leads to seller attrition," adding, "Withdrawal from the (individual fulfillment) business was an inevitable step."

Regarding this, a Kakao Style representative explained, "The decision to end Jikjakmate was naturally made to focus and prioritize service operations," adding, "We are continuously considering and developing various services for sellers, and in this process, new services may appear or disappear at any time. Jikjakmate is one of them."