Naver to challenge YouTube dominance in South Korea

 

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Founded in 1999, Naver Corp has grown rapidly over the past 16 years. Today, the internet company has a market cap of more than $19 billion.

The internet company laid out its future global strategy at Connect 2015 in Seoul last Tuesday — its second annual conference organised to discuss its vision and strategy for the mobile industry.

In tech savvy South Korea, YouTube currently reigns supreme, but Naver Corporation, the sprawling conglomerate behind the country’s largest search portal and chat app Line in Japan, vowed to challenge YouTube’s video streaming dominance in 2016.

Naver executives took the stage at the Naver Connect 2015 conference last Tuesday to deliver a message best summed up by two keywords: “live” and “mobile”. They said their strategy will make it possible to challenge video content giants Netflix, Facebook and YouTube owner Google — at least in South Korea.

“The keywords ‘live’ and ‘mobile’ encapsulate our corporate strategy for next year,” said Naver CEO Kim Sang-hun in a keynote speech. “We will focus our attention on providing for our partners mobile-based, live-streaming content, which we believe will be the key to survival in the fast-changing global IT environment against competitors such as Google, Facebook, and even Twitter.”

Kim emphasised keeping an “organic connection” between services and content consumers in order to detect what they want and give them it when they want it.

“In order to protect the domestic movie market, we must shake things up, and provide differentiated technology and content,” said Jang Joon-ki, director of video strategy, adding that Naver will have a two pronged video strategy — one in differentiated services, and another in content.

“Since YouTube entered the domestic market, it started a ‘warring states period’ in the domestic South Korean market. Naver TV Cast can compete fiercely with Facebook and YouTube in video content and in services,” Jang said.

Naver TV produced 290,000 video clips of content a month in the first 10 months of this year — more than double the 140,000 video clips a month the company created during the 12 months of 2014.

This was the result of Naver TV Cast having inked a deal with Smart Media Rep (SMR) for a revenue share of 90 percent for the broadcasters and 10 percent for Naver TV Cast. SMR originally looked for a similar deal with YouTube, but Google insisted on a 45 percent slice of advertising revenue.

SMR consists of seven big media outlets in South Korea — MBC, SBS, CJ E&M, JTBC, TV Chosun, Channel A, and MBN — and launched in the second half of 2014.

SMR, an ad agency for streaming services, provides smart Over-the-Top (OTT) service providers with video advertising proceeds generated from mobile, PC, and smart TV viewership. The seven TV companies of Smart Media Reps make up more than half of all terrestrial and cable TV viewership in South Korea. OTT refers to a telecommunications operator delivering services across IP networks, usually the internet.

In addition to video streaming content, Naver has Line Corp, founded in Tokyo in 2000. Over the past 15 years, it has amassed over 200 million monthly active users in Asia, including Japan, Taiwan, Thailand, Indonesia and, recently, Pakistan.

Naver said it will also gear up other mobile-based services, such as Naver Webtoon, group chat app Naver Band, and V app, a social video streaming service initially focused on marketing Korean pop music in East Asia to ratchet up market share, which has proved a late-blooming success. Naver reported that more than 50 percent of V app viewers come from outside South Korea.

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Envoy says South Korea must end rice quotas to see real Thai food in Seoul restaurants

Thai Ambassador to South Korea Kittiphong na Ranong sees improving Thai food restaurants as a way of prying open the South Korean rice market, which he sees as too closed to agricultural products from his country. I interviewed him at his office in Hannam-dong, in Seoul, on Sept. 16, 2013.
Thai Ambassador to South Korea Kittiphong na Ranong sees improving Thai food restaurants as a way of prying open the South Korean rice market, which he sees as too closed to agricultural products from his country. I interviewed him at his office in Hannam-dong, in Seoul, on Sept. 16, 2013.

[This article was written originally for The Korea Herald in September 2013.]

Ever eat out at an authentic Thai restaurant here in Seoul, South Korea? It is doubtful that you have, according to the Thai Embassy in South Korea.

There is a dearth of restaurants in South Korea serving real Thai cuisine made from real Thai ingredients at the moment, according to the Thai Ambassador to South Korea. But he is keen to change that.

Kittiphong na Ranong sees improving Thai food restaurants as a way of prying open markets here, which he sees as too closed to agricultural products from his country.

The embassy is determined to upgrade Thai restaurants and the popularity of Thai cuisine here with a number of promotional campaigns, such as one this week: “Thai Restaurant Week” from Sept. 23-29.

“When we launched a promotional campaign earlier this year at a restaurant at Lotte Hotel, we found it extremely difficult to even buy domestically-sold Thai rice,” he said in an interview with The Korea Herald on Sept. 16.

Thailand exported 90 tons of kitchen table rice to South Korea in 2012, a fraction of a percentage point of the 30,000 tons of rice exported from here to Thailand. The vast majority of Thai rice exported to South Korea is low-grade brown rice destined for industrial uses, such as in the manufacture of store-bought makgeolli, Korean fermented rice wine.

Put simply, Thai restaurants cannot make the grade if chefs cannot get their hands on quality agricultural products from Thailand, according to Kittiphong.

Of the 172 restaurants that the embassy determined serve Thai cuisine, 71 were selected to participate in this week’s promotional campaign.

The problem, according to Kittiphong, rests with South Korean import quotas. The permitted amount of Thai rice, poultry, fruit and other agricultural shipments ― which made up about 20 percent of its total exports of 13.6 billion won ($12.5 million) in 2012 ― is limited. Kittiphong wants the quota lifted.

South Korea and Thailand agreed to seek preliminary discussions and a joint study on forging a comprehensive economic partnership agreement when former President Lee Myung-bak met with Thai Prime Minister Yingluck Shinawatra in Bangkok in November 2012.

The two nations also agreed to seek to increase bilateral trade to $30 billion by 2016. Such an enormous increase in trade ― a doubling over the next three years ― could only be met by lifting South Korea’s import quotas on Thai rice, poultry and such Thai fruits as longan and pomelo, the ambassador said.

Thailand currently has a huge rice surplus stockpiled by the government as a result of a recent price support scheme, meant to help out small farmers.

If sold at current market prices, however, the stored rice would result in profit losses and government deficits. Thailand is aggressively searching for untapped markets.

The Thai government’s new intervention began with the landslide electoral victory of Yingluck’s Pheu Thai Party in 2011. In the subsequent two years, it has allocated $18.7 billion to buy rice and shore up support for farmers. The government currently has 10 million tons of rice in storage. This month, the government extended the policy, which could lead to an additional 10 million tons after the 2013-14 harvest due to start in October.

A career diplomat, the mild-mannered Kittiphong expressed frustration at the pace of Thailand-South Korea talks on lifting restrictions on imports, saying that the preliminary FTA talks and a joint feasibility study should take place in tandem with lifting the Thai rice quota.

“When we raised the issue last year, they said that it was a bad time because it was the end of the previous government, that we had to wait for the new government to settle into place,” he said. “But when the new government came in, they said it is the restructuring the ministry, that trade is being separated from the Ministry of Foreign Affairs.

“The issue of rice, chicken and fruits has been on the table for years, so we should be able to resolve that issue separately,” he said.

Why certain imported food items are not available on grocery store shelves in South Korea is debatable. According to proponents of the current restrictions, it is a matter of weak demand for Thai agricultural products.

Critics of the restrictions point to stiff non-tariff barriers here, such as sanitary and phyto-sanitary measures that they say are unfairly leveraged by the government to limit imports.

Discussions on lifting the quota on Thai rice appear slow. So, the embassy is focused on stimulating demand for Thai kitchen table food items through promotion drives such as its current effort.

In “Thai Restaurant Week,” diners are entered into a lucky draw with every minimum purchase of 50,000 won or more on a single receipt. The embassy will announce the winners in mid-October. Four grand-prize winners will receive round-trip flight tickets to Thailand.

Six restaurants are participating in the Thai Select program: Golden Thai in Songpa, Sala Thai’s Jamsil branch, Sala Thai’s Bundang branch, Siam at Seoul Station, Thai Orchid in Itaewon, and Wang Thai, also in Itaewon.

Kakao details premium taxi app, launches test run

Kakao Taxi

[This story was written originally on October 21, 2015 reporting from Seoul, South Korea.]

The main features of the planned service include Mercedes and Lexus taxi models, a suit-wearing driver, and a complimentary drink, at around three times the price of a regular cab.

Kakao, the $7 billion parent company of messaging app KakaoTalk, released more details on Tuesday about the planned launch of a premium taxi app, as it tries to monetise lifestyle platform businesses.

KakaoTaxi Black will start off with a test run connecting users to a fleet of 100 cars through the end of this year while the company awaits final approval from the Seoul City government, when the service will then be expanded.

KakaoTaxi Black appears to be a souped-up version of Kakao’s existing ride-hailing app. So far the “taxis” include Mercedes E-Class Sedans and Lexus models, in contrast to the natural gas-powered Hyundai Sonata and Kia Lotze models that the vast majority of Seoul cabbies drive

KakaoTaxi Black users will send a request for a ride to a specific destination from their smartphone using the app.

The drivers will be professionally licensed and wearing a suit, much like a limousine service driver. The ride will even come with a complimentary beverage.

The catch is the high-end cab will cost about three times the price of regular cab, the company said. So, a ballpark figure could be about 45,000 won ($37.50) for a crosstown trip in Seoul that would normally be priced at around 15,000 won ($12.50). The base fee is 8,000 won ($6.60).

KakaoTaxi Black could presage future efforts to strengthen the company’s profit sources, since it has posted rather weak financial results for the past two quarters. That said, Kakao is a local success story, growing from a fledgling startup to South Korea’s second-largest IT venture after Naver Corp.

It merged with search portal Daum last year and spun off games and innovative businesses from its mobile-based platform. Intensifying competition in the industry has since burdened the firm with heavy marketing costs and anemic profits.

John Jung, Kakao’s chief business officer and the executive in charge of KakaoTaxi, said during a media briefing on Tuesday that while the concept is quite new to South Korea, premium taxis already take up 27 to 30 percent of the worldwide taxi market.

Kakao launched its existing ride-hailing app after it inked a three-party MOU with the Seoul Taxi Association and a major taxi company. The premium taxi drivers will be regular employees of the taxi company, Kakao said.

As of this month, Kakao said it has about 160,000 drivers registered with KakaoTaxi, which has accumulated 30 million calls since it launched in March, and receives 300,000 requests on a daily basis.Kakao Taxi

Samsung affiliates to benefit from demand for electronic components, OLEDs

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[This story was written originally for ZDNet on October 6, 2015 reporting from Seoul, South Korea]

Continued strong demand for TVs, tablets, and handsets will see a profit surge over the next two years, according to a Korean report.