Naver, Kakao unsettled by Google's in-app payment policy

Global tech giant Google’s in-app payment policy has been coolly received by South Korea’s leading platform companies, fueling criticism over global companies’ foray into the country's e-commerce platform industry. 

During an online media roundtable on Nov. 24, domestic portal giant Naver Corp. Chief Executive Han Seong-sook said, “Google should carefully reconsider its obligatory in-app purchase policy given that it has an unrivaled influence in the domestic mobile app market.”

In September, Google announced that it would require in-app payments for all digital content listed on its app store Google Play. This means Google will be entitled to a 30% commission cut for all of the app purchases as no other billing method will be offered.

Initially, the new policy was set to take effect in January next year for new apps, while giving a longer adjustment period for existing apps until next October.

However, strong resistance from the IT industry prompted Google to extend the effective period for new apps to October as well, although this did little to appease critics as it doesn't benefit new app developers nor inflict any losses on Google.

Last week, Joh Su-yong, co-chief executive of the country’s largest messaging app operator Kakao Corp., also said that Google Play’s revised billing policy will “have a considerable impact on many content creators and distributors in Korea,”  adding that “Google should allow other payment methods as well.”

Meanwhile, Naver CEO Han has expressed concerns about global IT platforms’ entry into the local market. Recently, Korea’s largest telecommunication carrier SK Telecom Co. teamed up with e-commerce platform Amazon to sell the US-based retail giant's products directly via local e-commerce platform 11Street.

In October, Naver also strengthened ties with entertainment conglomerate CJ Group through a share-swap deal to create synergy in their entertainment content and logistics business.

NAVER RAMPS UP SUPPORT FOR SMALL BUSINESS OWNERS

Naver will step up its support for small and medium-sized businesses in the domestic e-commerce market by investing around 180 billion won ($163 million) over the next two years.

To this end, Naver is rolling out the Brand Connect platform to showcase the work of selected content creators. The company will also connect sellers on its Smart Store platform to 1,000 experts offering professional advice to business owners.

The platform could, for example, connect speciality attorneys or accountants to sellers from both online and offline businesses.

Naver also plans to incorporate artificial intelligence into its live-streaming shopping service Shopping Live to aid business owners. 


Write to Joo-wan Kim at kjwan@hankyung.com
Danbee Lee edited this article.