Kakao Corp. announced that it would acquire Croquis, the operator of ZigZag, a local fashion shopping platform startup. Recently, the South Korean e-commerce industry has grown significantly, prompting retail and tech companies to expand their platforms and innovations. Accordingly, Kakao acquired ZigZag to diversify its services and become a leading player in the country’s increasingly competitive e-commerce ecosystem.
Established in 2015, ZigZag is an AI-backed shopping app that offers personalized shopping experiences, giving users access to over 4,000 online shops and brands. Since its launch, ZigZag has built a stable monthly active user base, with the app accumulating over 30 million downloads. Currently, industry officials expect ZigZag’s 2021 transaction volume to reach 1 trillion won ($895 million), exceeding its 2020 record at 750 billion won ($670 million).
Under the agreement, Kakao would combine ZigZag with its existing fashion shopping service, Kakao Commerce Corp., which operates its e-commerce platforms. Kakao Commerce also runs the fashion content-curation app KakaoStyle, which provides users with the latest fashion trends and corresponding purchasing options. Although Kakao has not yet disclosed the exact shares, industry sources estimate the acquisition to value around 1 trillion won ($879.4 million).
“We expect ZigZag, which has achieved customer experience innovation through big data specialized in fashion, and Kakao, the nation’s largest IT company, to create the best synergy,” said Seo Jeong-Hoon, CEO of Croquis. The leading South Korean Internet operator plans to launch the newly merged businesses by July, with Seo at the lead.
Kakao’s Extensive E-Commerce Expansion
Apart from having substantial customer experiences, Kakao acquired Croquis due to its fashion market advantages, growth potentials, and high competitiveness. As Kakao stated, it would integrate its technological capabilities with ZigZag’s big data to establish a leading online shopping platform. Kakao also said that its partnership with Croquis would cater to all ages and deliver convenient mobile-based shopping experiences.
Following the ZigZag venture, Kakao plans to generate more business opportunities and compete in the global fashion market. Kakao CIO Bae Jae-Hyun also said that Kakao would expand its operations to more Asian regions, including Japan and China. To this end, Kakao would utilize its global influence and synergies, content, and support body, establishing a solid market advantage. Additionally, Kakao continues to expand its e-commerce service portfolio with new IP content acquisitions.
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