The Mobile and Co�ee-holic Korea

KM Report August

Korea in theMicro-moments EraNEW TRENDSin the Mobile Advertisement Market

2015/072015/062015/052015/04

2015/032015/022015/012015/12

Mobidays [KM Report] Article & Advertisement Contact : j3y_sj@mobidays.com

Mobidays is a specialized mobile marketing company,making every e�ort to have proper understanding of mobile market and to activate mobile eco-system.

In order to do so, Mobidays established [Mobile Advertisement Research Institute: MARI] in August 2014(blog.naver.com/mobidays01).

[Mobile Advertisement Research Institute: MARI] collects and studies domestic and overseas mobile related information and issues ‘VEUM’ (Very easy understanding of mobile) a main column, and ‘KM report’ a monthly trend report.

KM report is a report based on insight and information articles such as domestic / overseas mobile related investment news and market issues which provides mobile eco-system trend and issues.

We will keep working our best to release various and interesting news about mobile market in succession.Thank you.

Mobidays Team

Domestic Issues Global Issues

1. Land of Opportunities, Digital India!

2. Uber’s Growth Pains!

3. Continental power! Chinese mobile• China’s Takeover of the Mobile Gaming Market• Understanding China in order to Advance into China

1

Index

1. Korea in the Micro-moments Era• The "Smartphone-Skilled” Public• Korean 20s’ Mobile Usage State• Korean Workers’ Mobile Usage State

2. Mobile Game Market’s Current Address• Increasing Playing Time of Mobile Games• Encountering Routes of Mobile Games• Enforcement on Stochastic Item Self- Regulation

3. O2O Services Being Absorbed into Daily Lifestyles• Attempts to Introduce O2O• Food Tech: Restaurant Business and O2O

4. Attempts to Secure Video Contents

1

2

Domestic Issues

Korea in the Micro-moments Era• The "Smartphone-Skilled” Public• Korean 20s’ Mobile Usage State• Korean Workers’ Mobile Usage State

2 Mobile Game Market’s Current Address• Increasing Playing Time of Mobile Games• Encountering Routes of Mobile Games• Enforcement on Stochastic Item Self- Regulation

3 O2O Services Being Absorbed into Daily Lifestyles• Attempts to Introduce O2O• Food Tech: Restaurant Business and O2O

4 Attempts to Secure Video Contents

S.Korea88%

China73%

Singapore72%

USA53%

Japan35%

94% of Korean smartphone users = skilled users who have used smartphones for at least 12 months

60% 33% 6%

Korea in the Micro-moments Era

What is Micro-moments?

[Devices most used by Korean internet users when using the internet]

[mobile search rate per country]

A phenomenon in which people satisfy their desire to learn and discover new things, search, and purchase items all through smartphones.

The “Smartphone-Skilled” Public1

?

3

Use smartphonesmore often

Use smartphones, computers, and tablets at a

similar rate

Source : Google, Consumer, Barometer

Use computers or tabletsmore often

Videos 43.1 sec

Text 14.4 Paragraphs

Illustrations 17 slides

Pictures 10 slides

Infographic 9.3 slides

46%42.4%46%42.4%24.8%

T

[Research on Korean 20s’ mobile usage state]

[Mobile services preferred by 20s] [Most appropriate length of contents preferred by 20s]

Korea in the Micro-moments Era Korean 20s’ Usage State1

4Source: University Tomorrow Research Laboratory For the Twenties, KT Business and Economy Research Institute

(n=918 males and females in their 20s)

3hrs 44mins

When searching for information Naver 78.5% When searching for latest issues Naver 59.2%When networking with others KakaoTalk 78.0% When killing time Facebook 40.0%When searching for information on mobile Blog 43.0%

When need for mobiles is most desperateWhen using public transportation 27.6%

When mobiles are used with most concentration

Before going to sleep 26.5%

Smartphones

40.4%Caffeine drinks

38.5% Internet searches

35.2%Cigarettes

26.4%Alcohol

25.4%

SNS

22%Internet Surfing

20.7%Games

19.9%Messaging

10.5%Using Apps

7.8%

5Source: Employment Portal Saraminv

(multiple response, n=920)

Korea in the Micro-moments Era Korean Workers’ Mobile Usage State1

Daily average smartphone usage time for workers who rely on smartphones : 4hrs

[Target of reliance for Korean workers]

[Smartphone features most used by workers]

Smartphones

96.5%Tablet PC

15.2%

Male Female

Regular Cellphones

2.2%

[Mobile game usage rateof Korean game users]

86.2%(n=1,293)

[Daily average mobile game usage time]

Weekday 75min · Weekend 94min[Average mobile game usage time per use]

Weekday 37min · Weekend 56min

86.2%

63.7 67.4 69.3

29.719

0.3

57.6

3430.3

1.6

6Source: Kocca, 2015.July Game users’ status report

Mobile Game Market’s Current Address Encountering Routes of Mobile Games2

[Mostly used areas of Mobile games ](Unit : % / 1+2 Ranking) (Overlapping responses)

Self-entetaininggames

Record renewalgames

Foster/growthsimulation games

Competition games Others

[Mobile game devices](Overlapping responses)

Google Play

69.7%Kakaotalk

38.6%AppleAppstore

21.1% Cellular service companymarket

12.9%

LINE

2.7%

Friends’ recommendation

Recommendationmessage throughservices such asKakao Talk

Direct Selectionthrough

Kakao Talk Games

App StoreRankings

TV ads SNS Portal ads Game community adsand newsletters

Male Female33.9

43.1

18.4 2125.3

14.1

24.930.8 27.5

20.113.6 13.3 15

713.2

7.3

7

Mobile Game Market’s Current Address Encountering Routes of Mobile Games2

[Recently downloaded mobile games’ information obtainment route](Overlapping response, Unit : % )

[Mobile game download route](Overlapping response)

Source : Kocca, July, 2015.Game users’ status report

?

8

Mobile Game Market’s Current Address

Game market enforces self-regulation on stochastic items!

K-iDEA, reveals self-regulation monitoring and certificate mark

Giving up on ‘stochastic items’ rather than self-regulation

Enforcement on Stochastic Item Self-Regulation2

Source : July 15th, 2015. etnews K-iDEA, reveals self-regulation monitoring and certificate mark July 20th, 2015. Digital Times. Under the pressure of self- regulation, games without ‘stochastic items’ appear

What is stochastic item self-regulation?It is a regulation which states that for youth games(allages, age12, andage15),the probability of ‘stochastic items’ in each areas should be revealed and a warning message should be included when ‘charged enchant (such as strengthening or synthesis) ‘ is carried out.

• K-iDEA(Korea Internet & Digital Entertainment Association) will start a self-regulation monitoring process to ensure a stable settlement of stochastic item self-regulation.

• From August 1st, K-iDEA, through monitoring, will give certificate marks to companies following the regulations and will reveal monthly/yearly monitoring reports.

• ‘Immortal Warrior’, a mobile RPG that Red Sahara developed, released a new server that doesn’t sell charged stochastic game items.

• Nexon’s company nDoors’s mobile strategy game simulation ‘King Gwanggaeto’ did not select a stochastic item service.

• It is an attempt to provide the game’s inborn fun through users’ skills and strategies.

9

When users buy more than 10,000 KRW worth of products at the convenience store CU. They can use the ‘Booktake’app to get their purchased products delivered. Delivery time is between 10~40 minutes.

Customers can order products on the Lotte.com online channel and pick them up at Lotte department stores,Lotte mart, Lotte supermarket, 7-eleven etc.

Since last April, Lotte Supermarket is providing the ‘drive & pick’ service. Customers can order online then pick up their products without having to exit their vehicles when they drive by the store with a car.

DaumKakao opened the Jeju Creative Economy Revolution Center in Jeju Island and announced their ‘silicon beach’ construction plan.

DaumKakao is currently constructing a demonstration beacon in Dongmun Market which will allow customersto shop using smartphones without the need of credit cards or wallets.

DaumKakao plans to connect art pieces with O2O in Jeju Island to support sales and distribution.Moreover, beacons will be constructed at airports and major tourist sites in order to provide Jeju Island touristinformation and product discount coupons to foreign and domestic tourists in Jeju Island with a smartphone.

O2O Services Being Absorbed into Daily Lifestyles Attempts to Introduce O2O3

Source : June 25th, 2015. Korean Economy. Delivery apps expanded their markets and have become the ‘big hand’ in industry... like no other through investments and take-overs June 29th, 2015. etnews. Order, pay, and even delivery through KakaoTalk... Jeju becoming a O2O heaven

Convenience store CU starts convenience deliery service with delivery brand ‘Booktake’

Lotte group provides smart-pick up service that emphasizes omni-channels

DaumKakao activates O2O in Jeju Island!

출처 : 2015.06.23 해럴드경제 주문에서 배달까지 10분…O2O서비스‘끝없는 진화’ / 2015.07.20 platum 전문화 된 배달 시스템 구축 … 배달의민족, 배달 전문 회사 ‘두바퀴콜’ 인수합병 10

‘Yogiyo’, an app providing food delivery service, invested about 4.4 million KRW to ‘Food Fly’, which delivers franchise restaurant foods.

Food Fly’ has its service limited to only Gangnam area in Seoul, plans to use the investment for service area expansion, marketing, and technology improvement.

Through their investment, Yogiyo was able to achieve the chain stores of Food Fly.

Woowa Brothers Corp., which runs the delivery app, ‘BaeMin’, took over the delivery company ‘Dubakicall’.Through this take-over, Woowa Brothers, was able to achieve their own human resources for delivery as well asa more professional delivery system.

Woowa Brothers established a company named ‘Woowa Youths’ and began to run ‘BaeMin Riders‘ that delivers not only foods such as chicken and Chinses food, but also food that weren’t available for delivery before.

‘BaeMin Riders’ that started in the Sonpa-Gu area last June, plans to expand their services to other major areasin Seoul through the delivery system of Dubakicall.

O2O Services Being Absorbed into Daily Lifestyles Food Tech : Restaurant Business and O2O3

Delivery app Yogiyo invests about 4.4million KRW to Food Fly

Delivery app BaeMin takes over ‘Dubakicall’

1 YouTube

2 DMB(Manufacturer+SmartDMB)

3 Naver Media Player

4 Afreeca TV

5 MX Player

6 BTV mobile

7 LG U+ HDTV

8 Today’s TV

9 KT Olleh tv Mobile

10 Daum TV Pot

1,9731,006

529

336

283

227

206

184

172

171

11

Source: Nielsen Korea

Source : July 9th, 2015. Digital Daily. Terrestrial broadcasting terminated... no exiting of MobileIPTV observed

Attempts to Secure Video Contents Mobile Videos, Popular Contents!4[Domestic smartphone video APP user status(June 2015)]

(Unit : 10,000 people)

Since mobile IPTV stopped airing terrestrial broadcasting, there was an increase in terrestrial broadcasting DMB app users.

Mobile IPTV service usage was expected to decrease after the termination of terrestrial broadcasting, but no noteworthy changes could be observed.

Time of foundation: 2005 Main o�ce: Paris, France

Monthly visitors (Year 2014): 128 million

About 300 million people view videos monthly

Videos provided in 18 languages and 35 localized versions

Dailymotion, that has about 128 million monthly users in Europe, with its online video streaming services, is preparing to enter the Korean market.

Dailymotion is preparing to establish either a branch o�ce or a separate corporation in Korea.

Naver is strengthening its content potentials in broadcasting contents, web dramas, web animations, 72 sec TV etc.

DaumKako added a social video service ‘KakaoTV’ to its mobile messenger, KakaoTalk.DaumKakao plans to expand its KakaoTV services through its large number of users secured with KakaoTalk.

Naver plans to aim for foreign markets through its release of ‘celebrity personal life live broadcasting’ service ‘V’.

Naver is preparing to launch its mobile-focused video platform, ‘Play League’.

12

Attempts to Secure Video Contents Mobile Videos, Popular Contents!4

Dailymotion enters the Korean market!

Naver strengthens its video contents

DaumKakao expands its video market through KakaoTalk

Source : July 3rd, 2015. Money Today. ‘Daily Motion’, world’s 2nd largest video company, will enter Korea July 6th, 2015. etnews Competition for contents between Naver and DaumKakao fierce

13

M report regular subscription sign-up

Sign up for a regular subscription of the Mobidays KM Report to receive the monthly M report through your email.

M report regular subscription sign-up ☞ http://goo.gl/iotV9x

MAX Summit is where trend leaders in the mobile business

within the field of Gaming, Ad-tech, Social Media,

Commerce, Start-ups and Venture Capitals gather to

pioneer the path into the future.

Gain insights and maximize your imagination for the

future of the mobile eco-system.

URL : http://maxsummit.co

E-mail : hello@maxsummit.co

http://maxsummit.co The speaker list will be updated every week. Please check from the o�cial website.

16

1

Global Issues

Land of Opportunities, Digital India!

2 Uber’s Growth Pains!

3 Continental Power! Chinese Mobile• China’s Takeover of the Mobile Gaming Market• Understanding China in order to Advance into China

17

Indian government announces ‘digital India’ to promote the IT industry

Prime Minister of IndiaNarendra Modi

The 1.2 billion people of India are all wantingdigital India that will lead to the digital highway.

It is hoped that by the year 2020 most of electronics, such as cellphones and communications equipment that India needs, will be made in India.

Source : July 2nd, 2015.Yonhap News India, this time ‘digital India’... 79 trillion KRW business investment plan

Land of Opportunities, Digital India! Full Support of Government and Industries1

Prime Minister Narendra Modi announced that by the year 2019, high speed internet connection, introduction of electronic documents and electronic signatures, establishment of digital hospital systems that include telemedicine, installationof wire-less internet repeaters in major areas, establishment of IoT research in stitutes will be completed in 250 thousand towns.

The Indian government plans to input about 18 billion dollars(about 20 trillion KRW) to the project above.

Indian industries announced investment plans worth 4.5 trillion Rupee(about 79 trillion KRW).

1234

China

India

USA

405

8248

458

118164

491

149 167

505

174 169

2014 2015(e) 2016(e) 2017(e)

18

[Smartphone sales projection by countries]

Reasons behind the fast growth of the Indian smartphone market

(Unit : 1 million)

Low smartphone distribution rate to begin with

Expansion of the smartphone distribution network

Wealthier middle class consumers

Aggressive promotion of local smartphone brandsSource : July 2nd, 2015.Yonhap News India, this time ‘digital India’... 79 trillion KRW business investment plan

Land of Opportunities, Digital India! Steadily Increasing Mobile Sales1

1,000900800700600500400300200100

02012 2013 2014 2015 2016 2017 2018

1225

60

137

292

501

778

(100 million Yen)

(Year)

1

19

[Indian mobile advertisementmarket forecast]

Growth of Indian mobile advertising market

(Unit : 100 million Yen)

Source : Cyber Z

Number of mobile users switching from pitcher phones to smartphones is increasing.

2 Various mobile app services are being introduced.

3 Advertisements through mobile are increasing.

Land of Opportunities, Digital India! Full Support of Government and Industries1

Uber 11%

20

[Chinese Taxi app market share]

Didi Kuaidi 78%

Uber announced that it would invest 1 billion dollars(about 1.1152 trillion KRW) in the Chinese marketin order to recruit drivers with subsidies. The Chinese company ‘Didi Kuaidi’ announced they wouldinvest 1.5 billion dollars(1.7 trillion KRW).

Uber announced a large-scale fund –raising plan that would ensure its survival against Chinese local companies. However, as local companies(Didi Kuaidi) also announced large-scale fund input, the competition for subsidies and marketing in the Chinese taxi app market is expected to worsen.

Daily average reservation: 300 million

Merge of Chinese taxi app companies‘Didi Dache‘ and ‘Kuaidi Dache‘ in February, 2015

Investment from ‘Tencent’ and ‘Alibaba’

Daily average reservation: 100 million

Investment from ‘Baidu’

Uber’s company value : 40 billion dollars (about 44.6 trillion KRW)

Uber’s Growth Pains! Subsidy Wars in the Chinese Market2

21

New York city council members(Stephen Levin & Ydanis Rodriguez) suggested a law that wouldlimit the growth of the number of hired cars in order to analyze the e�ects of hired cars on New York city’s traffic and air pollution.

Out of the 25,000 hired cars enlisted in New York, 18,000 cars are with Uber and thus industry officialsexpect Uber’s growth will be hindered if the law passes.

Uber’s founder, ‘Travis Kalanick, was prosecuted without detention for violating the law related toprotection and use of passenger transport service and location.

Uber Korea is suspected of providing rent-car drivers with readers that would allow them to checkpassenger locations.

The Canadian taxi industry filed for a 410 million Canadian dollars(about 365 billion KRW)-worthcompensation lawsuit against Uber.

According to the Toronto taxi industry, the Toronto taxi and limousine industry’s sales took a serious hitdue to Uber drivers’ illegal business such as driving passengers without appropriate licenses.

New York put a pause on the law when it was issued that it would limit jobs in New York. However, it was announced that the law will be re-considered once additional analysis on tra�c and drivers is complete.

Uber’s Growth Pains! Trouble Between Government and Taxi Industry2

New York city council members pass for ‘Uber car limit law’?

Uber stands at the Korean court for violating positive law

Toronto taxi industry file for a compensation lawsuit against Uber

78.4% 25.6 hrs(0.5hr decrease in comparison to last year)

(standard: 1 week)

22Source: 中国互联网络信息中心(CNNIC)

Continental Power! Chinese Mobile Gaming Market Current Status of the Chinese Internet Market

Chinese internetdistribution rate

48.8%

less thanmiddle school

education

36.5%

High school,and 2-year college

education

36.5%

4-year universityeducation

11.8%

Percentage of 10~39 year oldinternet users out of total

Chinese internet usage timein first half of year 2015

Number of Chineseinternet users

668 million

Number of mobileinternet users

594 million

3

[Internet users’ percentage by academic background]

38%

34%

2%

8%

6%

12%

2013 2014(e) 2015(e)

4465

23

Source: Newzoo, Talkingdata

Size of American mobile games market at6 billion dollars (about 6.8 trillion KRW)

(Unit : 100 million dollars)

Continental Power! Chinese Mobile Gaming Market China’s Takeover of the Mobile Gaming Market3

Global Googleplay

11.5 billion dollars

Chinese Android appstore3.6 billion dollars

Android appstores other than China1.7 billion dollars

Chinese iOS 2.3 billion dollars

Globalpitcherphones700 million dollars

iO S other than China10.3 billion dollars

Size of globalmobile games

market30.1 billion

dollars

Size of globalmobile games market30.1 billion dollars

[Global mobile gaming market forecast 2015 ]

[Size of Chinese mobile games market]

18

(Unit: %)

Baidu 39.85

35.55

23.58

16.44

5.54

4.17

360

Tencent

Wandurae

MM Market

Anji Market

Baidu

360

Tencent

Wandurae

MM Market

Anji Market

36.2 33 14.2 5.9 10.7

28 36.3 12 7 16.7

33.6 40.6 9.6 5.8 10.4

49.7 30 11.7 5.6 3

23.2 33.6 13.6 9.4 20.2

31.7 33.1 10.5 7.8 16.9

24Source : Industrial Trend of Content in China

Baidu and 360 platform’s influences turned out to be the strongest in theChinese mobile games market.

Ages under 24 and 25~30 turned out to be the main users of mobile games in the Chinese market.

Continental Power! Chinese Mobile Gaming Market Understanding China in Order to Advance into China3

[Distribution of Chinese mobilegame platform users in 2014] (Unit: %)

[Distribution of Chinese mobilegame users’ age groups]

Under 24 25~30 31~35 36~40 over 41

June 24th, 2015. Nesis. Workers “rely on smartphones the most” http://www.newsis.com/ar_detail/view.html?ar_id=NISX20150624_0013747658&cID=10401&pID=10400

July 2nd, 2015. Digital Daily. Korea is a ‘micro-moments’ country that satisfies its needs through smartphoneshttp://www.ddaily.co.kr/news/article.html?no=132079

July 2nd, 2015. Money Today. Korea’s mobile search usage rate at 88%... Highest in the worldhttp://news.mt.co.kr/mtview.php?no=2015070216575191315

July 17th, 2015. Asian Economy.Dailyaveragemobileusagetimeat‘3hrsand44mins’for20shttp://view.asiae.co.kr/news/view.htm?idxno=2015071710282843045

1. Korea in the Micro-moments Era

July, 2015. Kocca ‘Game users’ status report’

July 15th, 2015. Digital Daily. Keywords in the mobile market are ‘women’ and ‘30s’http://www.ddaily.co.kr/news/article.html?no=132470

July 15th, 2015. etnews K-iDEA reveals self-regulation monitoring and certificate markhttp://www.etnews.com/20150715000325

July 20th, 2015. Digital Times. Under the pressure of self-regulation, games without ‘stochastic items’ appearhttp://www.dt.co.kr/contents.html?article_no=2015072102100831102001

2. Mobile Game Market’s Current Address

25

Domestic Issues

26

June 23rd, 2015. Herald Economy. 10 minutes from order to delivery... O2O services ‘endless evolution’http://news.heraldcorp.com/view.php?ud=20150623000246&md=20150623110048_BL

June 25th, 2015. Korean Economy. Delivery apps expanded their markets and have become the ‘big hand’ in industry... like no other through investments andtake-overshttp://www.hankyung.com/news/app/newsview.php?aid=201506257833g

June 29th, 2015. etnews. Order, pay, and even delivery through KakaoTalk... Jeju becoming a O2O heavenhttp://www.etnews.com/20150628000086

July 20th, 2015. platum Professionalized delivery system established... BaeMin takes over delivery company ‘Dubakicall’http://platum.kr/archives/43059

3. O2O Services Being Absorbed into Daily Lifestyles

July 20th, 2015. platum Professionalized delivery system established... BaeMin takes over delivery company ‘Dubakicall’http://www.mt.co.kr/view/mtview.php?type=1&no=2015070212153428275&outlink=1

July 9th, 2015. Digital Daily. Terrestrial Broadcasting terminated.. No exiting of MobileIPTV observedhttp://www.ddaily.co.kr/news/article.html?no=132303

July 6th, 2015. etnews Compeition for contents between Naver and DaumKakao fiercehttp://www.etnews.com/20150703000261

4. Attempts to Secure Video Contents

Domestic Issues

27

July 2nd, 2015. Asian Economy Indian smartphone market will exceed the American market within 2 yearshttp://www.asiae.co.kr/news/view.htm?idxno=2015070208060634785

July 2nd, 2015. Yonhap News India, this time ‘digital India’.... 79 trillion KRW business investement planht t p: //www.yonhapnews.co.kr/bulletin/2015/07/02/0200000000AKR20150702160400077.HTML?input=1195m

July 9th, 2015. ZDNET ‘extreme growth’ in the smartphone advertisement market of the Asia-Pacific regionhttp://www.zdnet.co.kr/news/news_view.asp?artice_id=20150709091903&type=det&re=

1. Land of Opportunities, Digital India!

June 30th, 2015. news1 Taxi app Uber in a fierce competition for subsidies with Chinese app Didi Kuaidihttp://news1.kr/articles/?2306423

July 6th, 2015. Herald Economy. ‘Shared economy icon’ Uber stands again in the Korean courth ttp : //news.heraldcorp.com/view.php?ud=20150706000336&md=20150706140306_BL

July 7th, 2015. Money Today. Law to limit Uber cars... 2nd stage of Uber vs. New York‘http://www.mt.co.kr/view/mtview.php?type=1&no=201507061461533777&outlink=1

July 24th, 2015. Yonhap News. Toronto taxi industry files for 365 billion KRW compensation lawsuit against Uberh t t p : //www.yonhapnews.co.kr/bulletin/2015/07/24/0200000000AKR20150724072300009.HTML?input=1195m

2. Uber’s Growth Pains!

Global Issues

28

July, 2015. Kocca Chinese contents industrial trend 2015

July 16th, 2015. iNews24 China rises as the world’s greatest mobile games markethttp://news.inews24.com/php/news_view.php?g_serial=909163&g_menu=020600&rrf=nv

July 17th, 2015. ZDNET China enters mobile games market... should focus on ‘Baidu-360’http://www.zdnet.co.kr/news/news_view.asp?artice_id=20150717104534&type=det&re=

3. Continental Power! Chinese Mobile Gaming Market

Global Issues

29

Thank You

Contact Ushttp://www.mobidays.com/en

http://facebook.com/mobidays.en

https://www.linkedin.com/company/mobidays

Seung Je, Lee

j3y_sj@mobidays.com

HP :

FB :

IN :

Editor :

E-mail :