Startups take notes from Korean unicorns

Six Thai startups visited Naver Corporation’s headquarters in South Korea as part of the Line ScaleUp programme that aims to bolster the Thai startup scene. Mr Kang is sixth from right.

Localisation, differentiation and supporting new talent are the keys to success among unicorn startups in South Korea, a model that Thai startups can follow.

Six Thai startups were taken to South Korea in mid-September under Line’s ScaleUp programme, aimed at expanding local startups and helping them gain international funding. They visited three leading tech firms in South Korea.

Localisation first

“Naver Corporation, the parent firm of Line, took 20 years to evolve from a startup to a global tech firm, and now ranks fifth in terms of market capitalisation in South Korea. It is worth US$22 billion (674 billion baht),” said Jayden Kang, chief of strategy and head of Line Man at Line Thailand.

Naver’s journey began as a corporate venture at Samsung SDS in 1997 with six people. In 1999, Naver separated from Samsung and operated a search engine to let user search for information on 3.1 million websites in the Korean language at that time.

In 2002, Naver embarked on the Knowledge iN forum, where questions could be posted by anyone on the website and answered by other users.

Based on local content, Naver became the third-largest website in South Korea in 2001, reaching No.1 three years later.

Naver has 89 vertical services in its portal, including music, video on demand, e-books, shopping, e-commerce and property. The main source of revenue is banner advertising. Line’s top four markets are Japan, Thailand, Taiwan and Indonesia.

“To expand business overseas, Thai startups don’t need to rush,” Mr Kang said. “They need to have a firm grounding in the domestic market and then expand their footprint.”

Dare to change

Jongho Joo, head of the investment team at Woowa Brothers, the operator of a food delivery app in South Korea called Baedal Minjok, said its business started from disseminating restaurant brochures.

Woowa Brothers became a unicorn startup in December 2018.

In 2018, the company’s revenue was 32 billion won (818 million baht).

Restaurants can either use a delivery service from the app or their own drivers.

“Our services refrain from charging a commission fee from restaurants, unlike our rivals, instead earning from advertising in the app and delivery charges,” Mr Joo said.

Focus on talent

A representative from Krafton Game Union, a group of various game studios that have rolled out scores of popular games such as PUBG (PlayerUnknown’s Battlegrounds), stressed that most game developers have a creative spirit but business success cannot be guaranteed.

“This is why small game studios struggle to survive, because of financial pressure,” said the representative, who asked not to be named.

Five studios formed the union in 2015. Even though they operate independently, they have strong partnerships to share revenue and development.

“By operating as a union, this enables us to keep talented people and boost synergy,” the representative said.