Kakao’s emoticons are cute cash cows

From left: Cat’s Melody, Perytail, Nicejin and Narm are the four best-selling emoticons in order of popularity at Kakao’s emoticon store from 2012 till now. Sticky Monster, far right, is the most recent hit emoticon.

Emoticon providers are all smiles these days due to surging demand from users of KakaoTalk, the nation’s leading mobile messenger app.

But few are as busy as Sticky Monster Lab (SML), one emerging creative content studio.

Boo Chang-jo and Choi Lim, co-founders of SML quit their former jobs in 2007 to start the business. They created short animation films with their flagship “Sticky Monster” character, but public awareness of the brand remained low.

That all changed when a Sticky Monster-themed emoticon pack entered the shop on KakaoTalk. Everyone from middle-aged women to teenagers went wild for the character, and sales on the messenger surged.

As public awareness increased, so did the number of Sticky Monster’s collaborations. The company has gone on to create joint products with Lotte’s Chum Churum, a soju brand; Smoothie King, a beverage chain; and Aritaum, a cosmetics shop.

All have sold out.

“The emoticon business brought us lots of profits, but it was also a great opportunity to raise awareness of our characters in the market,” Boo Chang-jo, founder of SML, said.

Emoticons started out as a way to have fun or make jokes during mobile chats, but they have since created a new business model.

“Exact figures are hard to give due to company policies, but the total size of the emoticon market is assumed to be over 100 billion won [$86 million],” a Kakao spokesman said. “If we include sales of related products, the size of the market expands to as much as over 300 billion won.”

KakaoTalk’s emoticon shop offers 3,000 different emoticon sets for about 2,000 won apiece. Roughly 27 million shoppers visit the mobile shopping platform for emoticons every month. According to Kakao, 10 million of the 38 million total users on KakaoTalk use emoticons during their chats. While about two billion emoticons are sent every month on average, more people receive them than send.

Heavy users are estimated to have purchased 20 sets on average, the company said.

Back in December 2011, when Kakao first started the emoticon shop, nobody expected the emoticon market to become this significant. According to developers at the time, the company started its emoticon shop with six emoticons modeled on characters from famous webtoons with no end goal in mind - just a desire to make things a little more fun.

“The texting service was fine, but some users pointed out the service lacked fun elements, and from there, a designer on the team suggested we add cartoon characters,” said Ji Ju-hyun, a content planner for Kakao who was on that first team of developers.

The first emoticons uploaded for sale on the store were created by Kang Full, a well-known webtoon artist on Daum’s portal, and Emalyun and Norangumi of Naver.

People were initially doubtful that the emoticon store could ever become a cash cow for either the company or artists. But these days, some artists make their entire living by creating characters for the store, which can then become licensed into tangible products and bring in tens of millions of won in profits.

Some creators have even become minor celebrities based on their characters.

More than 1,000 artists, including individuals and teams, are actively adding to Kakao’s emoticon shop. That number excludes the providers of Kakao’s basic emoticons, the ubiquitous Kakao Friends, which are managed by the company’s own brand experience team.

The most popular emoticon sets on the store are Cat’s Melody, Perytail, Nicejin and Narm, in order of sales.

“I have released about seven to eight sets during the last four years, including special items for the season, and it has earned me profits at the level of my monthly salary,” said Cheon Gyeong-hwa, the 35-year-old artist behind Cat’s Melody, which are based on drawings of a cute white cat.

Cheon has taken some time off from designing to have a baby, but she says she still enjoys a devoted following. “I receive tons of emails asking questions like how I created such a popular emoticon or what is required to enter the Kakao store,” she said. “There are also frequent calls from companies asking me to create a character for them.”

Competition to enter Kakao’s emoticon shop is fierce. Every week, 30 to 50 new emoticons are uploaded to Kakao’s website in hopes of being accepted. The company has a team that evaluates the emoticons according to criteria like how age-appropriate they are and whether or not they have been plagiarized.

Only 50 new items can be added to the store every month.

There have been many different paths to getting a spot on Kakao’s store. The journey for 32-year-old artist Lee Chi-sung, 32, also known as CHO, began when he started uploading cartoons he’d drawn to his Facebook, which became hugely successful.

He entered the Kakao store at the end of last year with his cartoon “thing and think,” which imbues items found in everyday life with a meaning or message.

Although he majored in art, Lee works full-time on the business development team at an IT company. He creates new emoticons mostly during his winter or summer holidays.

Other creators have no formal training in art at all, with some being ordinary stay-at-home moms or office workers.

The distribution of the profits is quite complicated. Emoticons are categorized as digital items, so Apple and Google take 30 percent of the total revenue for providing the operating systems that make the sales possible. Kakao and the artists share the other 70 percent.

The ratio differs case by case, but artists usually take more than the company.

While emoticons have emerged as a sustainable means of earning extra profits for both artists and companies, they have also become a new way for users to express their emotions.

Especially among the younger generations, the colorful characters can be used to more effectively convey an emotion than words.

“There are thousands of specific emotions that can be conveyed through emoticons, and I think users enjoy selecting the most appropriate item to imply something more than words could describe,” Lee Yoon-geun, a PR manager at Kakao, said.

“Existing characters like Mickey Mouse and Donald Duck have had too much exposure around the globe, and people have their own stereotypes about those characters” Boo Chang-jo of SML said. “New emoticons, on the other hand, are easier for users to imprint their emotions onto because the characters are usually a kind of blank slate.”

Kakao is planning to further diversify its business areas. It will expand partnerships with other companies, and by early next year, it will open up a site selling business-to-business coupons.

“We aim to strengthen support for emoticon artists to nurture 100,000 artists that show stable performances in the long run,” Kim Hee-jeong of Kakao said. “While increasing the overall demand for emoticons, we will further expand distribution channels to create sound business environments.”

BY JEON YOUNG-SEON [kim.jeehee@joongang.co.kr]