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Kakao’s Expansion Raises Concern

15:23 February 29, 2016 replay time01:46

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[Anchor]

Kakao is expanding its O2O services, which connect online with offline.

After Kakako Taxi, the company plans to launch services for hair salons and chauffeur services.

Concerns are being raised about such expansions.

Jung Sun-mi has more.

[Reporter]

Kakao plans to launch Kakao Hairshop in the first half of this year.

Customers will be able to look up hair salons using a smartphone, make reservations, and pay using this beauty O2O service.

The beauty industry has more concerns than hopes for such a service.

The problem is the cost.

For hair salons to be added to Kakao Hairshop, they have to pay an initial fee of 50,000 won, and a monthly payment of 20,000 won afterwards.

In addition, the commission charged for every payment a customer makes can be up to 13%.

The industry is concerned that the problem of high commissions that plagued the delivery apps could be revived.

<Hair Salon A / Director> “Not only is the commission high, but there are also monthly payments. We have been avoiding social commerce services because of such issues, and now we are worried that high costs will be incurred, just as with the delivery apps.”

Another service that Kakao is launching, the chauffeur service, is also controversial.

Current companies providing chauffeur services are protesting against it.

The drivers point out that no viable plan for coexistence has been suggested.

<Kim Jong-yong / President of the National Chauffeur Association> “For practical coexistence, Kakao needs to lower the commission rate and actively address the issue of dual insurances.”

Small hair salons are suffering from economic downturns and the chauffeur industry has structural problems.

Both industries are looking to Kakao to come up with a meaningful plan for their coexistence.

Jung Sun-mi reporting for Yonhap News TV.

Yonhap News TV: 02-398-4409 (Report) 4441 (Inquiry on article), KakaoTalk/LINE jebo23

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