Naver, Kakao wrestle for crown in webtoon market

South Korea’s leading webtoon (digital comics) platforms are wrestling to secure the No. 1 position in the global market as they work to take down each other's throne in their respective countries of dominance.

This year, webtoon giants Naver Corp. and Kakao Corp. have been aggressive in their global webtoon operations, securing the top positions in the US and Japan, respectively. Still wanting more, the companies are taking the offensive to dismantle the other in the market where they are the underdog.

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Naver has been at the forefront of the US market thanks to its level of resource investment there over the past few years. The company has demonstrated its commitment to the US market by putting its US-based subsidiary Webtoon Entertainment in charge of global webtoon operations.

The company’s efforts have paid off, as its webtoon platform has kept a solid grip on the No. 1 position as the highest-grossing app in Google Play’s comics and novel category in the US since January of last year.

But its glory days may be numbered as Kakao aims to loosen Naver’s solid footing in the US using a completely different strategy. Instead of tapping into the local ecosystem and network of amateur artists, Kakao plans to spearhead the market with webtoons that have already achieved success in Korea.

“KakaoPage is equipped with a huge portfolio of intellectual property (IP) with over 7,000 pieces of work. The company will strategically select webtoons that are likely to fare well in the US,” said an official at Kakao.

In a move to boost its presence in the US market, Kakao also acquired an additional 29.6% stake in Tapas Media, a US-based digital comics platform, valued at around 16.1 billion won ($14.5 million), which raised its shareholdings to 40.4%, making it the biggest shareholder in the company.

Tapas currently holds third place among US-based comics apps and boasts 3 million monthly active users.

Through its partnership with Tapas, Kakao has already tasted some success in the US as the company provided IP for 14 webtoons to the US comics platform as a test run. Since then, Tapas’ monthly revenue surged to increase over fivefold in October compared to the year-earlier period.

“Recently there are an increasing number of people in the US market who find Korean content to be hip and original,” said an industry source explaining the rise in Korean content popularity.

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Meanwhile, Kakao's webtoon app Piccoma is flourishing in Japan despite arriving later than its industry peers. Naver's Japan-based comics service Line Manga had the highest-grossing app until this year when Kakao took over in July for the first time.

Piccoma’s success is owing to its ability to target new digital consumption behavior by uploading new episodes on a weekly basis, or even more frequently. Traditionally Japanese comics apps tended to update their comics offerings once a month as they are generally scanned versions of monthly comics.

Also, while webtoons account for around 10 to 20% on Japanese comics apps, they account for around 75% on Piccoma.

“The short-term episode updates that webtoons provide have more appeal to viewers who read comics on their mobile phones," a Kakao official explained.

In a move to reclaim its lead in the Japanese market, Naver began to make changes by offering episode updates and rolling out various promotions such as distributing free coins that allow some access to paid content.

The efforts paid off, as in the third quarter of this year, Line Manga’s MAU increased 20% year on year and the number of paid users increased by 46%.

Meanwhile, market criticism persists that Naver needs to be more proactive in using webtoons to reclaim its throne in Japan.

“Naver will eventually hit a wall if it relies too heavily on promotions. It needs to increase its webtoon content to boost its episode updates," an industry source said.

Write to Min-ki Koo at kook@hankyung.com
Danbee Lee edited this article.