Kakao, the so-called Wechat of South Korea recently announced that the US $900 million acquisition of Croquis has been basically settled, and its subsidiary Kakao commerce will merge with Croquis. The project, led by Johnny Seo, CEO of Croquis, is expected to officially launch on July 1. So far, Croquis was recruited by Kakao, along with Zigzag, who was popular with young Korean women. The acquisition drove its share price up 7.59% to 120500 won (US $107.82).
So far, neither side has disclosed the transaction amount of the acquisition, with an external valuation of 1 trillion won (about $895.9 million). The transformation of the fashion sector will enable Kakao to win the advantage of consumer audience and category in the competition with Naver and Coupang. By integrating the big data of Croquis and Zigzag, and taking advantage of Kakao’s technology and core competitiveness, we can breed a powerful online fashion shopping platform and enter the overseas market soon.
At present, more than 4000 online shopping malls and brands have settled in Zigzag. Teenagers and young people in their 20s are the main audiences, and female consumers in their 20s account for 75%. By the end of 2020, the monthly activity of Zigzag has exceeded 3 million. Croquis’s revenue in 2020 is 40 billion won (about 35 million US dollars), and Zigzag’s trading volume is expected to exceed 1 trillion won in 2021.
Zigzag’s search filtering function is relatively simple to use. The default filtering elements include popularity, age and style. AI technology will capture the browsing history, product preferences, and purchase records of consumers and then recommend them. In 2019, Zigzag launched a payment service called “Z”, which allows consumers to settle one-time across different shopping malls.
Jenny Hyojin Lee, CFO of Kakao, said that Zigzag was enthusiastically sought after by young people when it was launched, and its business model and growth potential had been recognized by the industry. We hope to expand our business to other Asian regions such as Japan and China.