Kakao broadens AI platform with Hyundai, boosts e-commerce business with M&A

Kakao, operator of South Korea’s top-used mobile messenger KakaoTalk, is moving to extend its influence in its major business divisions, through strategic acquisitions in the e-commerce sector and partnerships in the artificial intelligence platform business.

Kakao is reportedly looking to acquire Korea Center, which operates international shopping support site Malltail that helps Korean consumers make direct purchases from overseas sites and ships the purchased goods to Korea.

The Korean mobile messaging giant announced in a disclosure Thursday that it was indeed “considering multiple ways to foster the growth of its commerce business,” but that “details have not been confirmed yet.” 

Korea Center confirmed that Kakao has proposed an acquisition. Kakao would spin off its commerce business into a new unit, and then merge with Korea Center. However, nothing has been decided regarding the deal, including stake ownership or intent, it said.

In addition to Malltail, Korea Center also runs MakeShop, an online shopping mall creation service, and podcast platform Podbbang. Earlier this year, the company further raised its profile by acquiring SummercePlatform, the operator of Korea’s oldest online shopping mall price comparison site Enuri.com.

If successful, the deal would allow Kakao to venture into the overseas e-commerce business via Malltail and in turn widen the scope of its online marketplace services available via the KakaoTalk messenger.

Meanwhile, the Korean mobile messaging giant is working to move forward another major business goal -- extending the scope and reach of its AI platform Kakao I.

Kakao on Thursday announced it has embarked on a project to bring more extensive AI-powered voice command features to vehicles made by Hyundai Motor and Kia Motors. 

Kakao, which already has a working partnership with Hyundai in developing connected car technologies, plans to bring the convenient functions of its smart speaker Kakao Mini -- powered by Kakao I -- into the new Hyundai and Kia car models to be launched in 2019.

Kakao Mini’s key features -- streaming music, weather announcements and news reading via voice -- will be offered in new vehicles. New communication options such as sending and reading KakaoTalk messages via voice command are also in the works, the firm said.

A driver would be able to press the voice command button on the steering wheel and make voice commands, such as “Read this KakaoTalk message” or “What’s the fine dust level today?” to receive instant responses while on the road, Kakao said.

“Cars are a major area where Kakao is working to raise convenience with AI. The two companies will work closely together to bring innovation solutions to everyday tasks,” Kim Byung-hak, head of Kakao’s AI division, said in a statement.

By Sohn Ji-young (jys@heraldcorp.com)