Chastened Kakao to Set up Small-Business Fund

  • By Park Keon-hyung, Jang Hyeong-tae

    September 15, 2021 10:52

    A chastened Kakao on Tuesday promised to cut off some tentacles of its operations that most flagrantly aim to choke the life out of the competition and create a W300-billion fund to aid small businesses (US$1=W1,170).

    The moves comes amid intense public scrutiny of the messaging app giant's aggressive expansion that threatens the livelihoods of small businesses and government probes of its monopolistic practices.

    "We will withdraw from flower, snack and salad delivery services and also scrap the user fee for our smart cab-hailing service," Kakao said in a statement.

    It will also slash the commission for cab drivers joining the taxi-hailing service from W99,000 to W39,000 and the fee it charges for chauffeur services.

    "That means we will shut down our businesses that have been accused of taking away income from mom-and-pop stores," a spokesman explained.

    They also include beauty salon booking and educational contents services. But small businesses are wary of the sudden change of heart, which comes after Kako's stocks took a dramatic tumble.

    Chairman Kim Beom-su said, "Kakao and all of its affiliates need to ditch the growth model pursued in the past decade while fundamental changes are necessary at this time for growth fulfilling our social responsibility."

    Kakao will instead target overseas business opportunities. Kim "plans to nurture Kakao's main business areas to content development, such as Korean webtoons, and blockchain operations," the spokesman said.

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