What is Korea?

Whatever your perceptions

NOW

They’re probably right,

but it wasn’t always like this…

Gangnam 1950s

Gangnam 2013

Beyond the Morning Calm

Korea

Nathan Millard

Educated in LondonWorked in Korea 5 years

going back to 2003

Helping Korean mobile startups build global companies

Media, Global Networking, Coaching, Events

Understanding Korea

25.6M in Seoul Metropolitan Area (1/2 of population)

Home of Samsung

Hard working (10-12 hours per day)

Engaged, Impressionable, Tech-savvy

Homogenous, and follow the rules

Global trend setters Pop culture, tech, fashion

Source: Akamai Technologies. The Washington Post, March 24, 2012

Korea’s tech landscape

16.7MB/s broadband speed (World No. 1)

70%+ smartphone penetration

104%+ internet penetration

100%+ mobile penetration

LTE-A – Fastest mobile internet (10 x 3G)

City MB/sDaegu 21.5Daejeon 20.1Anyang 18.2Kimchon 18Seoul 16.9Shimotsuma 15.5Kanagawa 14.5Suwon 14.4Tokai 14.3Urawa 14.1San Jose 13Country MB/sKorea 16.7Hong Kong 10.5Japan 8.9

Korea’s Economic Landscape

• $22,500 per capital GDP (higher than EU)

• Asia’s third largest e-commerce market (12%+ annual growth since 2006)

• Increasingly vibrant exit market (M&A and IPO)

• Engaged consumer base, eager to spend through tech

IPhone

Tech trend super-highway!

What Does This Mean?

1,288

22

Russia

• High smartphone penetration: 70%+

• Android-oriented

• Korea Telecom’s T-Store lead app market until summer 2012

• Kakao games platform now boosting Google Play

• Currently, no serious challenge against Kakao Talk

• Facebook messenger?

Korean Mobile Market Overview

Large (Korean) Corporations Dominate

= 85% M/S

= 96% M/S

= 2.5% M/S

= 97% Penetration

= 14% M/S

A Look At The Local App Stores

• 20M subscribers (biggest in Korea)

• $30M monthly revenue

• 11 downloads per user per month

• Only market accessible to ALL Koreans

• Established in 2011

• 15,000 Free & 10,000 paid Apps

A Look At The Local App Stores

• Operating in 121 countries

• Language support in each market

• 60,000+ Apps

• 500M total downloads

• Established in 2011

• Operating in 45 countries

• 2,500 free & 1,000 paid Apps

• Established in 2011

• 5,000 free & 3,000 paid Apps

•#2 in the world for downloads

•#3 in the world for revenue

•25%+ online for 8+ hours/day

App Opportunity in Korea

Whole population engaged

•$100M USD monthly app revenue

•$1.2Bn USD+ expected for 2013

•And it’s still increasing

A closer look at some numbers

Gaming in Korea

• First country to have professional PC gamers

• PC rooms used to dominate free time (now mobile)

• Highly experienced gaming market place

• Exceptionally high consumer expectations

• Infrastructure supports ‘heavy’ games and apps

Anipang: First Kakao Game

CookieRun: Current Craze

80%-90% of app revenue from games

• 2011: $750M

• 2012 grew 28.4% to $900MM

• 2012 Kakao Games reached $100M

• 2013 grew by 194% to $345M won in the first half of 2013

• Expected to pass $1Bn for the full year 2013Source: KOCCA

More Gaming Stats

T-Store:

•“Aprox $5.27 spent per user per month on games…”

•“Compared to $2.92 across other digital content…”

• Appeared in Summer 2012 on Kakao

• 79.7% of smartphone users play ‘social games’

• Daily playtime is 54.4 minutes

• Player segmentation:

• Teens: 87%, 40s: 77.2%, 50s 54.3%

• Game genres:

• Casual: 69.8%, Simulation: 39.2%, TRS/MMORPG: 12.4%

• Softcore – Hardcore game trend

Social Gaming is Strong!

Smartphones sales this year will be down 14%

•30.7M in 2012 •26.3M in 2013

Why would this be?

Strategy Analytics

“Saturation”A world 1st…

Korea will remain a key testing ground for new

mobile products and services

Koreans as App Consumers

 Korean users are demanding, highly trend-focused, social, and fickle

•Trends in South Korea move fast

• 95% of top games in May were released in April and May

•Freemium rules, and in-app purchases can be highly successful(93% - 95% of all downloads are freemium)

•Large marketing budgets are [now] required for engagement

•Localization can not be stressed enough

•97% penetration of smartphones in Korea(contacts based on phone number)

•Games platform launched in 2012

•Now has 256 games (too many?)

•Aims to become integral life companion: Kakao Platform

•Continually adding monetizable services

•CPI reasonable, but need other marketing tactics

•Failing to acquire substantial growth globally

Kakao Talk

• World leader in mobile payments

• Extensive NFC enabled devices (SK Planet’s ‘T Cash’)• Used for 54% of in-app purchases

• Expansion of interconnected devices offers future opportunity

• Samsung aims to be a leader in the Internet of things

• Korea will be a great test market

Mobile Payments Situation

2014 – my predictions:

•Expect a maturing platform situation(dominated by 1 – 2 key players – Facebook?)

•Kakao may prevail, or may be challenged

•Samsung : Smart watch is just the start

•Connected devices will become the norm

•Korean companies will continue vying for global expansion

•Korean consumers will lead global mobile trends

•Korea is definitely open for business!!

What’s the Next + ?

Keep in Touch

• Please connect for more information

• Nathan@besuccess.com

• +82 (0)10 8723 7702

Thank You!!