Naver, Kakao compete over top spot in Japan's comics market

LINE Manga's comic series / Courtesy of Naver

By Kim Jae-heun

Korea's two largest IT firms Naver and Kakao are battling for the top position in Japan's comics market, which they evaluate as a “strategic hub” in the global market, according to industry analysts Wednesday.

Last year, Kakao beat Naver to take over the top spot in the Japanese manga market, which occupies a symbolic position in the global “cartoon kingdom.” The market size itself is large and the digital cartoon industry is growing more rapidly than ever there. Kakao Piccoma, a Japanese subsidiary providing a webtoon subscription service, recorded an all-time-high monthly gross merchandise value of 77.6 billion won ($641.5 million) in January ― accumulating 1.3 trillion won.

Naver took quick action to acquire eBOOK Initiative Japan (EBIJ), a Japanese e-book platform owned by SoftBank. Naver said it will complete the deal within a week and make an official announcement.

Naver's third-tier subsidiary LINE Digital Frontier will acquire EBIJ, which is expected to help the IT firm reclaim its leading position in Japan. LINE Digital Frontier is the operator of LINE Manga, Naver's Japanese webtoon service, and the combined entity will surpass Kakao Piccoma in market share.

“Various indicators shows our manga business in Japan is continuing to improve and we are preparing to strengthen our original content too. When the merger deal between LINE Manga and EBIJ is complete, our business strategies with the comic business in Japan will gain momentum,” a Naver Webtoon official said.

Popular manga series offered by Kakao Piccoma / Courtesy of Kakao

Kakao is confident it can maintain its current position in Japan.

“Kakao Piccoma's gross merchandise value soared last year by 74.3 percent year-on-year to reach 722.7 billion won. Compared to the 63 billion won we achieved in 2018, the figure improved by tenfold. It is an unprecedented accomplishment and this trend will keep us in our position as the top player in Japan's manga market,” a Kakao official said.

The company's next move is to launch a YouTube-like manga platform called “Piccoverse” in Japan within the next two months.

Piccoverse is a platform that allows Japanese firms to publish their comics and web novels digitally. It offers a profit model, where traditional Japanese publishers will operate their own comic channels through preview services.

Kakao Piccoma will, then, enter manga markets in France, Germany and Spain, in sequence. Last year, it founded an overseas corporation in Europe, and has already started an online comic service in France on March 17.

Furthermore, the IT firm is reviewing combining Kakao Games Japan with its manga platform operator to maximize synergy there.

“Kakao Piccoma started its comics service in Europe only two weeks ago, which is about a year later than Naver Webtoon which entered the European market in December 2019. However, Kakao established its overseas corporation in Europe more quickly than Naver. The two IT firms are severely competing against one another currently, which is likely to intensify as they expand their businesses globally,” an industry official said.