South Korea YouTube’s Growth Surges has a unique structure in the global online market, being one of the few countries where big tech companies have struggled to dominate. Native services like Naver, Daum, KakaoTalk, and Melon have acted as strong barriers against the entry of big tech players. However, the rapid growth of YouTube is signaling the rapid spread of big tech’s influence in the Korean market.
The domestic search market has long been dominated by Naver, maintaining a market share of 70-80% and reigning as the absolute leader. However, last year, Naver’s market share dropped below 60%. Analysts attribute this decline to users who have shifted from consuming content such as searching and reading news on Naver to YouTube. In fact, the MZ generation tends to prefer searching for videos on YouTube rather than using text-based searches on Naver. An industry insider stated, “As YouTube usage increases, the use of other services naturally decreases,” adding that YouTube has essentially become a portal.
Kakao’s Melon also relinquished its position as the number one player in the domestic music market to YouTube Music. In December last year, YouTube Music (6,496,035 monthly active users) surpassed Melon (6,238,334 monthly active users) to become the top player in the mobile music market in South Korea. YouTube Music’s monthly active users increased by over two million in just two years, from a mere 4.08 million in January 2022. Meanwhile, Melon, Genie, and Flo, along with other domestic services, experienced a decrease of over one million monthly active users each during the same period. YouTube offers YouTube Music for free to premium subscribers who pay 10,900 won per month. This tactic has rapidly expanded YouTube’s presence in the market. The Fair Trade Commission conducted an investigation into YouTube Music’s bundling fees in February last year but has yet to reach a conclusion.
Leveraging its strength of having over 40 million monthly users in South Korea, YouTube is also significantly strengthening its e-commerce business. In June last year, it launched a Korean shopping channel and started offering live commerce services. An industry source stated that consumers nowadays have a high loyalty towards YouTube’s short-form content and popular YouTubers, and these factors can change the landscape of the e-commerce market.