One of the biggest IT companies in South Korea has recently expanded its reach into Thailand with a major acquisition. Thailand has a dynamic and expanding economy with huge potential for South Korean companies. That has convinced Kakao to take over two companies in Thailand (Studio Phoenix and Studio Orange). The two companies will be merged to run its content and commerce business from the area.

“Studio Phoenix and Studio Orange were incorporated into Kakao Entertainment Asia, which was established to expand its entertainment business,” a Kakao Entertainment official told the Korean Times. “Kakao has acquired these two companies with the aim of starting music, video, and commerce businesses in Southeast Asian countries.”

Kakao is an entertainment, mass media, and publishing company founded in 2010. They are perhaps best known for their app, KakaoTalk, a free mobile instant messaging platform with 220 million registered users. The move into Thailand is certainly strategically important, but South Korean companies have seen the potential within the region for a couple of years now.

Korean Companies in Thailand

Thailand is a growing country that has actively sought South Korean investment in recent years. The Korean Herald reveals that numerous companies from Korea have bases in Thailand, including CJ O Shopping, GS Home Shopping and Hyundai Home Shopping, and cosmetics firms Sulwhasoo, Laneige, The Face Shop, and Skin Food. That is a strong reflection on the potential within Thailand and the desire to welcome new investment. 

Korea was the biggest foreign investor in Thailand in the first quarter of 2021. They accounted for more than $314m (฿366bn) or 17% of total foreign investment in the country. That’s a result of the Thai economy welcoming the retail outlets and becoming more tech-savvy. Therefore it is a major market for South Korean companies in the e-commerce, gaming, software, and other digital industries. 

Indeed, the Thai government has helped facilitate the growth in South Korean investment to benefit their overall economy. Expatbets explains how Thailand has one of the most dynamic economies in Southeast Asia, resulting from the forward-thinking policies of a government keen on developing the country. They’ve initiated reforms to make the country a better place to do business, and they now rank 21in the World Bank’s Global Ease of Doing Business Index. 

Kakao Webtoon in Thailand and Taiwan

A couple of months before their takeover of the two Thai companies, Kakao had already moved to strengthen their influence in the area, releasing digital content platform Kakao Webtoon in Thailand and Taiwan. It saw strong early buy-in in the country, surpassing ฿300m in daily turnover just four days after it launched. It launched in South Korea in August and earned ฿1bn within two days. The app continues to see remarkable growth, which underlines the company’s strong position within the digital media market.

With such impressive numbers, it is a huge boost to the Thai economy to have Kakao develop a presence there. It only signals a continuation of the intense interest from South Korean companies in Thailand and the Southeast Asia market.