Kakao to take ZigZag for a spin
Kakao is acquiring Croquis, the operator of fashion shopping platform ZigZag, the Korean IT company announced Wednesday.
Kakao said it plans to spin off the style business division from its subsidiary Kakao Commerce and merge it with Croquis. The joint venture will officially launch on July 1 as an affiliate of Kakao, and will be headed by Croquis CEO Seo Jung-hoon.
Specific information on the price of the acquisition has not been finalized yet, but multiple media outlets reported Wednesday that the price is expected to be nearly 1 trillion won ($900 million).
Founded in 2015, ZigZag allows customers to shop products from around 4,000 brands. The app, which offers users a list of products, mostly clothes, based on their preferences, gained popularity particularly among young customers in their 20s and 30s.
The number of monthly users on the app amounted to some 3 million as of the end of 2020.
Annual transaction volume, which was only some 200 billion won in 2016, surged to 800 billion won in 2020, according to Croquis and Meritz Securities. It is expected to exceed 1 trillion won this year.
Croquis recorded 40 billion won in revenue in 2020 with net losses of 25 billion won.
“We anticipate that the merger of ZigZag, which has achieved innovation in customer experience through big data it acquired in the fashion sector, and Kakao, the country’s major IT company, would be able to create the ultimate synergy,” Seo said in Wednesday’s report.
The new venture hopes to discover new business opportunities and enter the global fashion market, Kakao said.
“ZigZag's high competitiveness and potential for growth have already been proven in the fashion e-commerce market," said Bae Jae-hyun, an executive vice president at Kakao. "Utilizing the global content and influential following that Kakao has, we anticipate [the new venture] will become a global fashion platform by expanding the service to many Asian companies including in China and Japan."
Kakao’s acquisition of Croquis comes a month after the IT company opted out of participating in the preliminary bidding round for eBay Korea, which took place on March 16.
Kakao has not been the only enthusiastic player hoping to boost sales through online fashion platforms. Earlier in the month, SSG.com, the online platform of Shinsegae Group, acquired online fashion platform W Concept for 265 billion won.
BY CHEA SARAH [email@example.com]