2015/082015/06 2015/072015/05

2015/032015/022015/01 2015/04

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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

1. Mobile Era and the Closing Ranks of Three Mobile Carrier Companies

2. War of 0% Commission Fee, Who Is It for?

3. Capturing the Domestic O2O Market

4. NCsoft Focuses On Mobile Games

5. Online Shopping, Mobiles Are Catching Up On PCs?!

1. Xiaomi Creating a New Legend

2. Mobile Messenger, SNS Trend

3. The Boss Ruling Over the Mobile Advertising Market

Index

Domestic Issues

Global Issues

1

Mobile Era and the Closing Ranks of Three Mobile Carrier Companies

War of 0% Commission Fee, Who Is It for?

Capturing the Domestic O2O Market

NCsoft Focuses On Mobile Games

Online Shopping, Mobiles Are Catching Up On PCs?!

1

2

3

4

5

Domestic Issues

2

1 Mobile Era and the Closing Ranks of Three Mobile Communication Companies!

Source : August 9th, 2015. etnews, 3 Mobile communication companies that lost Joyn plans to make a standard messaging platform August 9th 2015. Seoul Economic Daily ‘One Store’ download exceeds 150 million

‘'Joyn’ is Korea’s first messenger platform following the global standards of messenger platforms set by the GSM Association (Groupe Speciale Mobile Association, GSMA).

The three mobile communication companies of Korea(SK Telecom, KT, LG U+) providedJoyn services but as they

The three companies plan to terminate Joyn services and will develop ‘standard messengerplatforms’, carrying out the originally intended roles of messages, and release them by the first half of 2016.

SK Telecom, KT, and LG U+ combined each of their app stores to create and release a combinedapplication market ‘One Store’ last July.

The 3 companies revealed that within two months of releasing ‘One Store’, downloads reached150 million, and buyers 11 million. Compared with before One Store’s release, downloadsincreased by 60% and buyers by 44%.

‘Joyn’ terminates its services and creates new messaging platform!

Three mobile communication companies reveal One Store results

3

2 0% Commission Fee War, Who Is It for? Securing customers than sales

Source : July 28th, 2015. ZDNET Baedal Minjok, commission fee ‘zero’... Gives up on 30% of sales

* Immediate payment is payment made within the delivery app through credit cards or mobiles.

WooWa Brothers running the food delivery app ‘Baedal Minjok’ decreased their*immediatepayment partial commission fee to 0%.

The immediate payment commission fees take up about 30% of Baedal Minjok’s total sales and thus this announcement showed their determination for securing customers rather than increasing sales.

Some workers believe that the zero commission fee policy of Baedal Minjok will bring e�ects such as‘increase of franchise stores and users’, ‘decrease of government regulation risks’, and ‘check of largeinternet companies’ delivery market entrance’.

30%

29.1 billionKRW

8.73 billionKRW

Immediate paymentcommission fees

Total Sales

Baedal Minjok announces 0% commission fees for immediate payment

1. Diversification of Baedal Minjok ad products

2. Starting a new business

Customer relations management system(push alarms/re-orders)

Baemin Fresh: fresh food regular delivery service

Baemin Riders: restaurant food delivery service

Baemin Cook: half-cooked food delivery service

[Baedal Minjok Sales in 2014]

Business loss 15 billion KRW

[E�orts to prevent decreasing sales]

Commission feesdown to 0%!

4

2 0% Commission Fee War, Who Is It for? Securing customers than sales

Against the ‘0% commission fees of immediate payments’ of Baedal Minjok, food order/delivery app Yogiyoreleased a product with 0% commission fee on order intermediation and external payments.

Small traders and enterprisers using Yogiyo only need to a pay a certain amount of monthly fixed paymentsand then can use Yogiyo at a 0% commission fee regardless of their payment methods or number of orders.

Frugal shopping service: delivery expendables discounts

Popular restaurant delivery service provided through partnerships with ‘FoodFly’ and ‘Bootake’

Baedal Minjok announces 0% commission fees for immediate payment

[E�orts to prevent decreasing sales]

Monthly fixed payments

Commission feesdown to 0%!

Small traders and enterprisers Yogiyo

Can choose between intermediationcommission fee or

monthly fixed payments

Intermediation commission fees 12.5%External payment commission fees 3.5%

Source : July 29th 2015. ZDNET Yogiyo rids of all commission fees and 'BaeMin' head-ontakes 5

3 Capturing the Domestic O2O Market

SK Planet invested in and signed a strategic partnership with indoor location information technology company ‘Indoor Atlas’ to target the global O2O market.

Indoor Atlas uses the earth’s magnetic field to inform users about indoor locations. This technology allows searching for indoor locations that GPS cannot reach, using sensors in smartphones to overcome distortion of the magnetic fields due to metal constructions of buildings.

Through this investment, SK Planet plans to strengthen its domestic and global O2O business technical skills as well as improve the competence of its ‘Syrup’ services.

Since June of 2015, DaumKakao has been conducting the beta tests of pre-order service ‘KakaoOrder’ on 4 domesticuniversities and expanded the range to the Pangyo area.

Users can pre-order their food through KakaoOrder without having to visit the stores.

‘KakaoOrder’ will be o�cially released in the coming October and its services are similar to ‘SyrupOrder’ of SK Planet. Both companies plan to add their easy-payment services ‘KakaoPay’ and ‘SyrupPay’.

SK Planet invests 3 million dollars in ‘IndoorAtlas’ and signs a partnership

DaumKakao preparing the release of KakaoOrder

KakaoOrder

Order through app without having to visit the stores

Receive products without having to wait

6

3 Capturing the Domestic O2O Market

New World Group DS Investment Consulting Group,Daesung Private Equity, Inc.,Smilegate InvestmentGoogle Play download: 1~5 million

July MAU(based on App ranker): 141,493

Yap Company that provides O2O commerce platform attracted about 22 billion KRW worth of investmentfrom an o�ine distribution group ‘New World Group’ in China and Hong Kong.

Yap Company also additionally revealed about the 20 billion KRW investment attracted fromINNOPOLIS Fund, co-run by DS Investment Consulting Group, Daesung Private Equity, Inc., Smilegate Investment.

Through this investment, Yap Company plans to confirm mobile coupon services based on beacon inChina and Hong Kong.

According to Yap Company, the mobile discount coupon O2O service ‘Yap’s beta service tests were completed and will o�cially begin their service in the Korean market from August 26th.

220억원 200억원

Source : July 26th, 2015. ZDNET O2O Commerce ‘Yap’ 42 billion KRW investment attraction

[O2O Commerce platform ‘Yap’ attracts 42 billion investment]

7

4 NCsoft Focuses On Mobile Games

Ncsoft invested about 10 billion KRW to acquire shares of external mobile gamedevelopment companies since 2014.

Ncsoft plans to strengthen its mobile business through investment in external developmentcompanies, development within their own company, IP opening, publishing business etc.

Companies that NCsoft invested in are small scale mobile game development startupcompanies with about 10 people or less and such companies are developing idea gamesnot found in the market currently.

• ‘Blade and Sword mobile’, ‘AION Legions’, ‘Fashion street‘ being developed• Mobile MMORPG ‘project S’ that made use of ‘Lineage 2’ IP is scheduled for release next year

Games using Intellectual Property(IP) under development

• NCsoft‘s subsidiary company Ntreev began developing ‘Pangya mobile’

Focus on mobile games of company

NCsoft plans to start mobile game publishing business in second half of 2015

Dec. 2014

500 million KRW

SK Planet invests 3 million dollars in ‘IndoorAtlas’ and signs a partnership

Source : August 18th, 2015. etnews 10 billion KRW on external development investment alone, NC entering a “mobile NC” orbit

Jan. 2015

300 million KRWFeb. 2015

300 million KRWFeb. 2015

2 billion KRWMar. 2014

5.8 billion KRW

8

5 Online Shopping, Mobiles Are Catching Up On PCs?! Online shopping current status

Reviewing productsand services

PC 61.1% Mobile 38.9%

Carrying out final payments

PC 64.1% Mobile 35.9%

Recognition as lower price

Size of online shopping through PCs are still bigger than mobiles as of now.

Customers rate PCs highly for product information delivery and mobiles for approachability.

Mobile shopping is gaining popularity as a substitute shopping channel among the youngergeneration and female customers.

PC 26.1% Mobile 41.6%

Viewing mobile shopping as anappropriateshopping style

in modern society

Male 72.2 Female 83%

Source : Data: Trend Monitor, on a 1000 adult males and females 9

5 Online Shopping, Mobiles Are Catching Up On PCs?! Mobile shopping current status

When searching for products and services using mobiles

Products often searched through mobiles (overlapping responses)

Platforms used by mobile shoppers (overlapping responses)

APP use Web surfing

Fashion andaccessories

SocialCommerce

Food andhealth products

Living and kitchen products

Digital and home appliances

HomeShopping

Largemarkets

Department stores,mobile sites

Website name search

31.2%

Clothes

52.3% 49.6% 40.9% 31.1% 30.4%

Open market

66.4% 59.5% 43.5% 25.7% 23.4%

25.9% 21.9%

Source : Data: Trend Monitor, on a 1000 adult males and females 10

(Unit: ten billion KRW)

Source : Korea On-Line Shopping Association (KOLSA)

5 Online Shopping, Mobiles Are Catching Up On PCs?! Surprising social commerce growth

Social commerce WeMakePrice attracted an investment of 100 billion KRW from ‘NXC’, a share holding company ofNexon, through issuing of new stocks allocation.

1.2

2010

79

2011

192

2012

340

2013

550

2014

800

2015

Through this investment WeMakePrice plans to scout new talents, speed up system improvement and also improveshopping and working experiences between customers and partner companies.

According to NXC, WeMakePrice is showing rapid growth by reaching a volume of business of 1.6 trillion KRW in 2014and a yearly growth rate of 60% in the first half of 2015. It was decided that WeMakePrice had appropriate competitiveedge in the social commerce market and an investment was thus made.

[Size of domestic social commerce market]

WeMakePrice attracts investment of 100 billion KRW from NXC

11

5 Online Shopping, Mobiles Are Catching Up On PCs?! Why is social commerce gaining attention?

Domestic social commerce Coupang, WeMakePrice, and TicketMonster recorded business loss due tomarketing competition last year.

Despite the loss, marketing investment and price discounts were made in order to gain more users than itscompeting companies.

Experts agreed that as the domestic social commerce market is recently growing and gaining more share in the mobilemarket, large business benefits can be expected once the competition slows down and thus large investments are being made.

Year 2014Sales 125.9 billion KRWBusiness loss 29 billion KRW

Year 2015

NXC : 100 billion KRW

Year 2014

US’s investment company Sequoia Capital, BlackRock: 4 billion dollars(about 440 billion KRW)

Year 2014US private fund Kohlberg Kravis Roberts (KKR) Consortium: 75 million dollars(about 80 billion KRW)

Year 2015

Soft Bank : 1 billion dollars(about 1 trillion KRW)

July MAU5,047,558

Year 2014Sales 157.5 billion KRW Business loss 24.6 billion KRW

July MAU4,786,244

Year 2014Sales 348.5 billion KRWBusiness loss 121.5 billion KRW

July MAU10,717,780

WeMakePrice

Coupang

TicketMonster

Source :

MAU Data : App Ranker

August 18th, 2015. Chosunbiz. Deficit and encroachment of capital…What is the reason behind the 3 social commerce companies receiving large investments? 12

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The speaker list will be updated every week. Please check from the o�cial website. 14

Xiaomi Creating a New Legend

Mobile Messenger, SNS Trend

The Boss Ruling Over the Mobile Advertising Market

1

2

3

Domestic Issues

16

1 Xiaomi Creating a New Legend A jump over China onto Global?

1816

1210

9

73204750

29901790

1620

Xiaomi ranked first in the Chinese smartphone market share and is showing its strength.

Xiaomi, founded in 2010, grew into a company gaining lots of attention within 5 years and sold 61.12 million in 2014.Its company value is calculated at around 45 billion dollars.

While Xiaomi’s smartphone market share is largest in China, Huawei is showing rapid growth in theglobal smartphone market.

(Unit : %)

Xiaomi Huawei Apple Vivo SamsungElectronics

Xiaomi Huawei Apple Vivo SamsungElectronics

Source: HIS Technology Source: IDC

[2015 2nd quarterChinese smartphone market share]

(Unit: ten thousand)

[2015 2nd quarterglobal smartphone shipments]

Source : August 4th, 2015. JoongAng Ilbo ‘Continent’s mistake’ Xiaomi exceeds SamSung and Apple 17

1 Xiaomi Creating a New Legend Targeting the Asian market

A banner on a building in Korea claimed the opening of a Xiaomi store and gained a lot of attention.

It was later revealed that the banner was meant to advertise the building’s re-modeling instead of Xiaomi’s entry intoKorea but had been mistakenly made.

Although Xiaomi didn’t o�cially enter the domestic market yet, it is expanding in the online and o�ine marketsin Korea as Korean customers evaluate it with its ‘cheap and reliable features’.

• On July 28th, Xiaomi released Mi Note in the Asian area(Singapore, Malaysia etc).

• Xiaomi conducted a campaign with the mobile call taxi service Uber to advertise Mi Note.

• When users purchase the 450 thousand KRW worth Mi Note through the Uber app and select a location of their choice, the Xiaomi+Uber arrives at the location and users can pick up their Mi Note there. Payments are made through Uber.

• Although it was a one-day-only event, there is a high possibility that Xiaomi may expand the on-the-day-delivery service to products other than smartphones using Uber vehicles.

Collaboration of Xiaomi and Uber

Xiaomi making a scene during Korean market entry

Source : July 24th, 2015. ZDNET Xiaomi uses Uber Taxi for a “quick delivery” of smartphonesJuly 24th, 2015. Financial News. Xiaomi “We love you, Korean fans!” .. Consideration of domestic market entry? 18

2 Mobile Messenger, SNS Trend Facebook showing strength among mobile messengers

* MAU: Monthly Active User[2015 1st quarter global mobile messenger *MAU status]

• According to the market research company SNL Kagan, Facebook showed strength in the 2015 1st quarter global mobile messenger MAU.

• Whats app, that Facebook took over in 2014, ranked 1st with 700 million and Facebook Messenger was at 2nd (650 million) and thus, both messengers add up to 1.3 billion.

Whats app

800 100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

700

600

500

400

300

200

100

0Facebook

MessengerWeChat Viber LINE Tango BlackBerry

MessengerKik

Source: SNL Kagan

19

2 Mobile Messenger, SNS Trend Which SNS is loved in Japan?

(Overlapping responses included)

•According to the data released by MMD, the app genre most used by the Japanese during January through June in 2015 was ‘games’.

•SNS ranked second and a closer examination on the service usage status revealed that ‘LINE’ ranked at the top, over ‘Facebook’ and ‘Twitter’.

0

10%

20%

13.6%

2013 (N=389)

16.5%

30%

13.6%

20.8%

16.3% 16.3%

5.19%

9.6%9.2%

2014 (N=565)

2015 (N=563)

0% 10% 20% 30% 40% 50% 60% 70%

2014 (N=565)

2015 (N=563)

LINE

Facebook

Twitter

Google+

Mixi

Instagram

Facetime

Games SNS Video

[Mobile service usage rate in Japan] [SNS usage status in Japan]

Source : MMD(Mobile Marketing Data Research Institute), ‘Research on smartphone app contents of year 2015’s first half’ 20

3 The Boss Ruling Over the Mobile Advertising Market Customer’s eyes moving to mobiles

American adults’ daily average digital media usage time exceeded 5 hours.

Source: KPCB

Usage time of desktops and laptops are slowly decreasing and is expected to remain around 2.4 hours in 2015.

Usage time of mobile devices are continuously increasing and is expected to reach 2.8 hours in 2015, exceeding the usage time of desktop/laptops.

0.22.7 3.0

3.2

3.7

4.34.9

5.35.6

0.3

2008

Mobile

2009 2010 2011 2012 2013 2014 2015

2.2

0.3

0.3

2.3

0.4

0.4

2.4

0.3

0.8

2.6

0.3

1.6

2.5

0.3

2.3

2.3

0.3

2.6

2.4

0.4

2.8 51%

2.4

Desktop/LaptopOthers

(Unit : Hours)[American adult’s digital media daily usage time]

21

3 The Boss Ruling Over the Mobile Advertising Market 64.8% growth compared with 2013

2014 global mobile ad sales

31.9 billion dollars total(about 37 trillion KRW)

Sales per areaNorth America 14.3 billion dollarsAsian Pacific 11.6 billion dollars아시아태평양

36.5%

기타18.6%

북미44.9%

15.1 billion dollars

14.7 billion dollars

2.1 billion dollars

41.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

46.9%

2013 2014

47.4%

46.1%

6.6%

Source: IAB Europe, IAB, IHS

Source: IAB Europe, IAB, IHS

[SNS usage status in Japan]

22

3 The Boss Ruling Over the Mobile Advertising Market Mobile market’s boss ruling over

Google changed their algorithm last April so that mobile friendly websites would be exposed as top ranks.

Apple revealed that starting from iOS9,to be released in fall of 2015, ad block features

will be added.

Google mobilegeddon turning into reality

Apple loads ad block features staring from iOS9

7.2

2013

11.7

2014

21.8

2015

41.4

2016

According to Adobe, websites that are not mobile friendly had their tra�c decreased by 10% compared to last year.

Companies are carrying out search ads to make up for tra�c loss but CTR is decreasing despite the rising CPC

Adobe’s digital index analyst Tamara Ga�ney emphasized that “campaigns must be new and meaningful to integrateand evolve around mobile experiences”.

Mobile browser marketApple Safari‘s share 52%

1.6%

2million

Global ad block programusers (PC+mobiles)

Mobile devices,Ad block features usage rate

CPC: Cost Per ClickCTR: Click Through Rate

(Unit: 1 billion dollars)[Expected loss in sales due to ad blocks]

23

August 9th, 2015. etnews. 3 mobile communication companies that lost Joyn plans to make a standard messaging platform http://www.etnews.com/20150807000233

August 9th, 2015. Seoul Economic Daily ‘One Store’ download exceeds 150 million http://economy.hankooki.com/lpage/it/201508/e20150809172955144450.htm

1. Mobile era and the closing ranks of 3 mobile communication companies!

July 28th, 2015. ZDNET Baedal Minjok, commission fee ‘zero’... Gives up on 30% of saleshttp://www.etnews.com/20150807000233

July 29th, 2015. ZDNET Yogiyo rids of all commission fees and takes ‘Baemin' head-onhttp://economy.hankooki.com/lpage/it/201508/e20150809172955144450.htm

2. 0% Commission war, who is it for?

July 22nd, 2015. Digital Daily. SKPlanet invests 3 million dollars in a O2O companyhttp://www.ddaily.co.kr/news/article.html?no=132734

July 26th, 2015. ZDNET O2O commerce ‘Yap’ 42 billion KRW investment attractionhttp://www.zdnet.co.kr/news/news_view.asp?artice_id=20150726111730

August 9th, 2015. iNews24 SKPlanet vs DaumKakao, O2O 3rd war approaching http://news.inews24.com/php/news_view.php?g_serial=912950&g_menu=020310&rrf=nv

3. Capturing the domestic O2O market

Domestic Issues

24

August 18th, 2015. etnews 10 billion KRW on external development investment alone, NC entering a ‘mobile NC’ orbithttp://www.etnews.com/20150818000250

4. NCsoft focuses on mobile games

July 28th, 2015. Segye Ilbo. Searching with mobiles then purchasing with PCs? http://www.segye.com/content/html/2015/07/27/20150727000560.html?OutUrl=naver

July 29th, 2015. ZDNET Yogiyo rids of all commission fees and takes ‘Baemin' head-onhttp://www.zdnet.co.kr/news/news_view.asp?artice_id=20150807163202

August 17th, 2015. Digital Daily. WeMakePrice attracts 100 billion KRW investment from NXC http://www.ddaily.co.kr/news/article.html?no=133685

August 18th 2015. Chosunbiz. Deficits and encroachment of capital... What is the reason behind the 3 social commercecompanies companies receiving large investments? http://biz.chosun.com/site/data/html_dir/2015/08/18/2015081802169.html

5. Online shopping, mobiles are catching up on PCs?!

Domestic Issues

25

August 4th, 2015. zdnet Xiaomi and Huawei rank 1st and 2nd Chinese market share http://www.zdnet.co.kr/news/news_view.asp?artice_id=20150804065219&type=det&re=

July 24th, 2015. ZDNET Xiaomi uses Uber Taxi for a “quick delivery” of smartphones http://www.zdnet.co.kr/news/news_view.asp?artice_id=20150724080512

July 24th, 2015. Financial News. Xiaomi “We love you, Korean fans!” .. Consideration of domestic market entry? http://www.fnnews.com/news/201507241813480886

1. Xiaomi creating a new legend

July 28th, 2015. ZDNET Japan’s LINE, an overwhelming 1st place against Facebook and Twitter http://www.zdnet.co.kr/news/news_view.asp?artice_id=20150728094418&type=det&re=

July 28th, 2015. Digital Daily. 3-way war continued in the global messenger market.. Focus on di�erentiation http://www.ddaily.co.kr/news/article.html?no=132920

2 . Mobile messenger, SNS trend

Global Issues

August 17th 2015. Yonhap News Last year’s global mobile ad sales at 37 trillion KRW...64.8%↑http://www.yonhapnews.co.kr/bulletin/2015/08/16/0200000000AKR20150816045500017.HTML?input=1195m

August 10th, 2015. zdnet Google ‘tra�c mobilegeddon’ turning into reality http://www.zdnet.co.kr/news/news_view.asp?artice_id=20150810103313&type=det&re=

August 12th, 2015. zdnet ‘iOS9 storm’ incoming in the mobile ad market http://www.zdnet.co.kr/news/news_view.asp?artice_id=20150812085422&type=det&re=

3. The boss ruling over the mobile ad market

26

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