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Kakao Super App failure brings South Korea to a standstill

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Super-App-kakao
© Associated Press
2 minutes

Very present in Asia, Super Apps are used by millions of people every day. They bring together in a single application all the services of everyday life. Messaging, financial services, transport, bills and much more… They aim to make the mobile experience simple, fast and intuitive. However, the crash of the South Korean Super App Kakao last weekend showed a very different reality, highlighting their limitations…

The whole country totally disrupted

On Saturday 15 October, nothing or almost nothing worked in South Korea. It was impossible to chat online with friends, pay for purchases in a shop, listen to music, order a taxi, send emails, identify oneself on public service websites… This catastrophic scenario was indeed experienced by millions of people. The cause? A fire in a data center. This accident brought almost all the services operated by the Korean Super App Kakao to a halt.

Launched as a messaging application more than ten years ago, KakaoTalk has become a world unto itself. Today, more than 90% of the South Korean population uses it. Seen from France, it's a bit like if a single national player controlled WhatsApp, Uber, Spotify, Google Maps, Gmail, France Connect, Apple Pay, and they all broke down at the same time. A considerable restriction to everyday services. The fire disrupted the habits of 47 million Koreans. It took several dozen hours before all services were operational again.

What are the consequences of this general breakdown?

On the Wednesday following the nationwide incident, a press conference was held at Kakao's office in Pangyo. The co-CEO of the Super App, Namkoong Whon took responsibility for the outage and apologized. "We have caused great inconvenience to everyone. I know that now, more than ever, it will take a lot of time and effort to regain the trust of our users," he said. He then announced, "I feel heavily responsible for this incident and will resign as CEO". Hong Eun-taek, now the sole CEO of Kakao, promised major action to ensure that the problem does not recur. No less than 460 billion Korean won, or about 328 million euros, will be invested. They will be used to launch the construction of the company's own data center from 2023.

However, the multi-day outage and the havoc it wreaked has raised national awareness of the country's growing dependence on Big Tech. Indeed, that the entire country should be destabilized by the destruction of a single data center is particularly disturbing and shows the power of Kakao in South Korea. Following this, the country's president Yoon Suk-yeol ordered an investigation into the incident, citing concerns about a corporate monopoly.

If there is a monopoly or oligopoly situation that manipulates the market, we need to take systemic measures at national level in the interest of the population.

Yoon Suk-yeol, President of South Korea

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