Toward symbiotic growth

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Toward symbiotic growth

Kakao, often called Korea’s big tech star, has come under scrutiny and criticism after failing to convince small businesses and the taxi community despite its pledge of donations and symbiotic growth.

The Korea Federation of Micro Enterprises denounced Kakao’s reconciliatory proposal, claiming it to be lacking details and prior coordination with the related industry. It claims that Kakao came up with the proposal to avoid regulatory actions. The taxi union under the Federation of Korean Trade Unions (FKTU) and three other taxi lobby groups called the measures fictional and scheming to ease public criticism over Kakao Mobility’s hike in call fees. They also called the offer to lower cab membership fees as “deceiving” the taxi industry.

Announcing its so-called “co-existence” measures last week, Kakao promised to withdraw its flower, snack and salad delivery service for business clients. It also pledged to scrap the competitive call service and lower membership fees for taxi drivers to 39,000 won ($33) per month.

The industry’s response to Kakao’s measures was cold.

Market abuse by dominant players like Kakao has been an issue of controversy for a long time. Kakao has been aggressively expanding its business based on its dominance as a chat platform most Koreans use despite repeated warnings from concerned parties. The company’s symbiotic growth measures came only after the Fair Trade Commission (FTC) embarked on an antitrust review of Kakao founder and Chairman Kim Beom-su, who will be summoned to a parliamentary hearing early next month to delve into the genuineness of the measures under question.

Kakao contributed to the growth of start-ups and open innovation by paying 62.6 billion won to buy pioneering navigation app Kim Gisa. Kim also offered to yield half of his personal fortune of near $5 trillion. And yet the platform business’s influence in the market had been disappointing.

Kakao must seek cooperative prosperity with its counterparts sincerely. A dominant platform’s influence in society is colossal. Consumers have chosen Kakao thanks to its convenient service, and the company has become one of the most valuable enterprises in Korea as a result. But exploiting small businesses and consumers cannot last. Solopreneurs are increasingly giving up their businesses and even their life due to protracted Covid-19 woes. Kakao must be more engaging — and sharing — to win back public confidence it once earned.
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