South Korean IT giant Kakao is closing some of its overseas subsidiaries and winding down a string of businesses accused of infringing on local businesses.
According to the company’s quarterly report on May 19, Kakao IX, a character business unit, liquidated its subsidiaries in the United Kingdom, United States, Japan, and China. Kakao IX, an affiliate managing Kakao’s character licensing arm, Kakao Friends, established a Chinese subsidiary in 2018. It built up its presence in China by operating pop-up stores and entering e-commerce shopping malls. Despite the pandemic, it opened its first official store in Shanghai, China, in 2020. This two-story store was located on East Nanjing Road, often called “Shanghai’s Myeongdong.”
At the time, Kakao IX said, “China has a very high growth potential for the character market.” However, poor sales followed, and the company liquidated the business earlier this year. A Kakao representative said, “This decision does not mean we have withdrawn from the market. We will continue our business in cooperation with local partners.”
Kakao continues its business reorganization efforts. Recently, Kakao Webtoon affiliate Kakao Piccoma has reportedly decided to pull out of the European market due to slower-than-expected growth in the European digital comics market. Additionally, it recently sold all of its stake in Kakao Hair Shop, which was controversially accused of infringing on local alley commercial areas.
