With an Internet penetration of 84 percent, this Northeast Asian country continues to top the UN ICT Development Index, a tool that benchmarks global information societies.
In terms of mobile user demographics, more than 78 percent of South Koreans use smartphones - and a whopping 97 percent of that number is within the 18 to 24 age bracket. In January 2014, the South Korean government announced plans to build up a 5G mobile network by the year 2020 with an investment commitment of US $1.5 billion.
Aligning themselves with the country’s top mobile telcos and tech firms such as Samsung and LG, the government plans to implement new features such as Ultra-HD, hologram transmission, and top-of-the-line social networking services.
All this might make South Korea sound like the ideal place to launch a social media start-up. But despite having the ideal environment for technological innovation, South Korea’s strict regulation of the Internet has stifled, rather than nurtured, its social media potential.
KakaoTalkEver since its launch in 2010, KakaoTalk has become the number one social network in South Korea, and today boasts approximately 48 million monthly active users (MAU). The multi-faceted messaging platform allows free calls, multimedia messaging, event scheduling, and in-app gift shopping. Deloitte named KakaoTalk the number one tech company in the Asia-Pacific region in its recent Technology Fast 500 Asia Pacific survey, which ranks companies based on revenue.
KakaoTalk ran into issues with user privacy in October 2014, as fears of state surveillance caused users to defect to foreign messaging apps en masse. KakaoTalk responded by introducing security features such as message encryption and publicly announcing that it will not allow the authorities to monitor user messages.
Besides a security snafu with its users, KakaoTalk still has tremendous reach in the domestic market and brands can use the messaging platform for marketing purposes. In 2011, Kakao rolled out its advertising platform "Plus Friend" in order to connect users with their favorite brands, celebrities, and media companies.
LineMessaging platform Line is a subsidiary of South Korea’s Naver Corp., and while it has 14 million users in its home country, it has proven most popular in other parts of Asia, especially Japan, Taiwan, Thailand, and Indonesia. Line's annual report for 2014 puts global MAUs at 181 million – with Japan, Taiwan, and Thailand accounting for 92 million.
One of Line’s monetization strategies that is popular with Korean users is its paid stickers, which are larger-scale emoticons primarily used for messaging. Usually stickers are free to use, but some services charge $1 or $2 for premium packs and they can be customized for brands, products, or limited-edition events. For example, famous Korean rapper PSY has his own sticker depicting his hit song "Gangnam Style."
This year, film studios Warner Brothers ran a successful mobile target block campaign to drive awareness for its new movie Edge of Tomorrow. The studio was targeting males 21 years or older and used video to give sneak previews of the incredible visuals from the film. The result? A success – as the campaign picked up 1.8 million ad impressions.
Cyworld’s Fall From Social GraceAvatar-driven Cyworld was one of the many homegrown social networks that have had to shutter its services in favor of larger platforms such as Facebook. Once South Korea’s largest social network, in its prime in 2011, Cyworld boasted a user base of 24.7 million before eventually giving way to Facebook.
Although it had global ambitions, Cyworld’s two attempts to enter international markets didn’t fare so well and the platform announced the closure of its global service in 2012.
Today, Cyworld is looked back on as a lesson for aspiring entrepreneurs in the space.