KT, LG Uplus invest in homegrown app store

ONE store CEO Lee Jae-hwan speaks during a press conference in Seoul in this July 2018 file photo. Courtesy of ONE store

By Baek Byung-yeul

Seen is a front page of ONE store app market. Captured from ONE store

KT and LG Uplus have acquired small stakes in SK Telecom's smartphone app market platform ONE store, paving the way for the local app store to file for an initial public offering, the three telecommunications companies said Wednesday.

The two firms bought an aggregate 3.8 percent stake in the platform with KT investing 21 billion won ($18.7 million) for 3.1 percent, and LG buying the remaining 0.7 percent for 5 billion won.

In a joint press statement, the two mobile carriers said the decision was a bid to improve the competence of ONE store so that it can work as a support platform for the local information and communications technology ecosystem.

Following the investment, SK Telecom now has a 50.1 percent stake and local tech giant Naver has a 26.3 percent. ONE store is expected to go public sometime in 2021.

Established in 2016, ONE store had run at a deficit for four years, but turned a profit in 2020.

According to a Feb. 16 report by the Korea Mobile Internet Business Association, ONE store was the third-largest app market platform here last year in terms of sales. In 2020, Google Play generated sales of 5 trillion won, accounting for 66.5 percent of total sales in Korea, followed by Apple's App Store with 21.5 percent and ONE store with 11.7 percent.

While Korea's smartphone app market has long been dominated by Google and Apple, it remains to be seen whether the telecommunications companies' acquiring stakes in ONE store will help the domestic app store platform bolster its presence.

With KT and LG Uplus joining as shareholders, ONE store CEO Lee Jae-hwan said the platform will be able to deliver more benefits. “By seeking mutual growth with the industry and offering bigger benefits to customers, we will try to become a representative app market in Korea,” Lee said in a statement.

One of the biggest draws of ONE store, compared to its competitors, is that it imposes relatively lower transaction fees ― it takes a 20 percent cut in payments made for apps and in-app purchases compared to Apple's 30 percent and Google's commission which is expected to be increased to 30 percent later this year.

Based on its relatively cheap commission, industry analysts say ONE store could possibly distinguish itself from Google and Apple if it succeeds in attracting blockbuster mobile games.