Kakao, the South Korean tech giant behind popular messaging app KakaoTalk, is taking steps to acquire mobile shopping app Zigzag, according to local reports Friday.
The reported deal could see Kakao buy a controlling stake in the operator of the shopping app -- estimated to be worth about $1 billion -- and create a new subsidiary for a merger.
Kakao, however, has not yet confirmed the move, saying it is taking into account “a range of options.”
The reports came after Kakao, once considered a potential buyer, decided to opt out of the race to buy a controlling stake in eBay Korea last month.
Created in 2015, Zigzag offers customized shopping experience based on an artificial intelligence algorithm. The app boasts some 3 million monthly active users and logged transactions worth 750 billion won ($671 million) last year.
The acquisition could give a boost to KakaoTalk’s e-commerce capabilities, adding to the range of items available for the app’s gift and shopping features.
Kakao has not been the only one to eye up-and-coming e-commerce platforms, looking to the post-coronavirus market.
Earlier this month, retail giant Shinsegae Group’s online shopping platform SSG.com announced a deal worth 265 billion won to acquire fashion e-commerce platform W Concept.
Online shopping sales saw an 18.4 percent jump last year while department stores and supermarkets respectively suffered a 9.8 percent and a 3 percent drop in sales, according to data from the Ministry of Trade, Industry and Energy.
By Yim Hyun-su (firstname.lastname@example.org