Kakao Establishes its First Social Impact Firm ‘Kakao Makers’
KaKao’s joint order production platform ‘MAKERS With Kakao’ became independent from the mother company as ‘kakao makers’ on March 2nd.
MAKERS With Kakao was established last February in order to change the current paradigm of manufacturing by producing products tailored to the needs of customers instead of mass-producing for mass-consumption.
In the past year, MAKERS with Kakao has had a 94.5% order success rate with 447 participating partners. Kakao was able to reduce inventories by only producing products that exceed a minimum order quantity(MOQ) needed for profit. The industry average inventory rate is about 20%. This endeavor was especially welcomed by its consumers as they could purchase products at more affordable prices thanks to the reduction in cost from surplus inventory elimination. Kakao decided to establish an independent foundation in line with the growth of the joint-order production platform last October.
kakao makers will expand its business after the independence. The company has been mainly dealing custom-made products such as leather products, accessories, art toys, ceramics, and food. However, kakao makers plans on expanding the scope of custom-made products to IT electronic devices, fashion, and household goods. Given the nature of long development and production time of the new fields, the order period will increase from the current average of two weeks to three or up to six months.
On the other hand, Kakao plans to drastically reduce production and shipping duration of handcrafted products, which usually takes one month, as they can be immediately crafted upon order. kakao makers will also connect with companies that want to order large quantities as gifts or souvenirs and expand into B2B platforms.
kakao makers CEO Hong Eun Taek said, “Waiting for a month to receive a product sounded bizarre to many, especially in the era of expedited shipping. However, we found out that many customers still choose quality over quick shipping last year.” He added, “We will demonstrate through bold investments that we can contribute to the change of the paradigm of manufacture industry and survive as a social impact company.
kakao makers releases new products at 10 a.m. every Tuesday and receives order through its mobile application. kakao makers will only manufacture items that have been ordered with a minimum order of production per week. Payment is made simply through Kakao Pay, mobile pay, or credit card. Once the production is finalized, Kakao will pay the cost of the product to the manufacturer in advance, thereby reducing the initial production cost for the manufacturer.
source : techforkorea