Korean internet giant Kakao posted record high sales and operating profit for the first quarter this year, despite the novel coronavirus pandemic fallout that has affected most industries.
According to Kakao’s announcement on May 17, Kakao‘s sales in the first quarter increased by 22.9 percent on-year to reach 868.4 billion won ($708.4 million). The company‘s operating profit during the same period marked 88.2 billion won, up by 218.9 percent.
Kakao‘s record-breaking performance has been largely due to the growth of the company’s mobile platform businesses, the company said.
Quarterly sales from businesses of the company’s online platforms, including messenger application KakaoTalk, led the latest surge in sales. Kakao’s online platform businesses posted 441.8 billion won of sales from January to March, rising 41 percent on-year.
Sales of businesses on KakaoTalk secured 224.7 billion won, up 77 percent on-year. Total transactions from KakaoTalk-based online stores and gift services increased by 55 percent on-year. The recent increase in advertisement sales from the messenger application also contributed to the robust performance, the company said.
“Due to the COVID-19 pandemic during the first quarter, more people stayed home and avoided face-to-face contact, which led to increased use of KakaoTalk services,” said Yeo Min-soo, co-CEO of Kakao. “This trend continues through the second quarter.”
Advertisement sales from Kakao’s web portal, however, went down by 8 percent on-year to 116.6 billion won, according to the company.
Kakao’s content businesses also expanded by 8 percent on-year to post 426.6 billion won in sales in the first quarter. The sales of paid content increased by 30 percent on-year at 97 billion won. Revenue from overseas transactions also went up 51 percent on-year.
Sales from Kakao’s new businesses, including Kakao Mobility and Kakao Pay, also soared 68 percent on-year to 100 billion won. Total transactions via Kakao Pay in the first quarter were 14.3 trillion won, up by 39 percent. The recent expansion of Kakao’s new taxi service Kakao T Blue also contributed to the upward trend, the company said.
Operating expenses in the first quarter were 780 billion won, up 15 percent on-year.
Meanwhile, Kakao plans to expand sales from online shopping services and advertisements on the company’s messaging application. Kakao will expand its content businesses by entering the markets of neighboring nations, including China, Taiwan and Thailand.
In the second half this year, Kakao will launch enterprise software Kakao Work to look for new business-to-business opportunities.
By Shim Woo-hyun (email@example.com)