Popular app operators in South Korea race to create super apps

App operators in South Korea are in stiff competition to create super apps – as clear winners have emerged in different business sectors.

The dominant apps in specific categories are trying to expand into related businesses, taking advantage of the robust branding power. 

A super app is a mobile or web application that provides multiple services including payment and financial transaction processing, effectively becoming an all-encompassing and self-contained platform. 

ALL-IN-ONE

Danggeun Market, the startup behind Karrot, South Korea's largest neighborhood marketplace app, launched a new service called ‘Within 10 minutes of walking distance.” 

The service uses the location tracking function to introduce nearby part-time job opportunities to local users. 

Drama & Company, the maker of the South Korean business card management app Remember acquired three companies in related fields so far this year. 

The plan is to allow for the whole gamut of hiring-related activities on the app, in addition to the original function of business card management. 

Including Jobis & Villains, the operator of artificial intelligence-powered accounting platform 3.3, a total of three different platforms are now in the recruiting platform market. 

This happened because leading startups are in a push to become super apps at the same time. 

Danggeun Market, Remember, and Jobis & Villains are not the only ones vying to grow their apps into super apps.

The country’s top travel and accommodation platform Yanolja Inc. launched a ticketing service last month, in a bid to become a leisure activity super app. 

Alarmy, which is the No.1 mobile alarm clock app in South Korea, recently acquired MyRoutine as part of its efforts to become the overarching platform for recording and managing people’s daily habits. 

Ride-sharing app So Car, for its part, is also planning to encompass ticketing for trains and reserving parking spots on its app. 

M&A OPPORTUNITIES

The startups’ shared goal is to secure future growth engines by centralizing different services in one area and therefore pre-emptively beating the competition. 

Viva Republica, the operator of fintech app Toss, is a success case that many founders aspire to emulate. 

Let’s compare Toss to its biggest competitor Kakao Corp.

Kakao Pay Corp. is in charge of payment and securities trading while KakaoBank Corp. is in charge of banking. Not only that, some of the lending and transfer activities actually overlap between the two subsidiaries. 

On the other hand, Toss provides the functions in a single super app. 

Toss became the leading fintech app in South Korea by the monthly active user count in April, ahead of KakaoBank. 

A venture capitalist told The Korea Economic Daily that “Unicorn startups and future unicorns have accumulated ample liquidity in the last couple of years.”

With the economic downturn this year, these startups have embarked on aggressive M&As to take advantage of the smaller startups’ low valuations, the industry insider added. 

“The trend shows that the South Korean startup ecosystem has matured enough to become an industry of its own,” Lee Ki-dae, the former chief operating officer (COO) of Startup Alliance Korea said. 

Lee elaborated, “Even in the case of conglomerates or overseas startups, mergers and acquisitions across different sectors happen more often when there is a clear leader in a sector.”

Write to Da Eun Choi at max@hankyung.com
Jee Abbey Lee edited this article.