Location Marketplace SK Planet Acquires Beacon-based Shopkick
The deal is part of a race to capture the estimated $1.4 trillion spent in the U.S. on online-to-offline shopping through geo-marketing technology.
The rise of location-based advertising and commerce is at the heart of South Korea’s mobile geo-marketplace operator SK Planet’s decision to acquire beacon-powered shopping app platform Shopkick. A subsidiary of SK Telecom, South Korea’s largest mobile carrier, and the operator of Korea’s largest shopper rewards program bought, SK Planet bought Shopkick for more that $200 million in cash, Shopkick co-founder and CEO Cyriac Roeding confirms.
SK Planet intends to use Shopkick as a direct entrance to the US market, or as Roeding puts it “its launch platform” into the States and globally. This means Shopkick is not being integrated into SK planet’s ‘thousands of employees,” Roeding points out, but rather will retain its own leadership as SK’s sole platform. Indeed, this is Shopkick, which has done much of the early evangelizing and work to grow beacon technology, will continue to flourish as its own brand (Roeding says its keeping its name), as opposed to being gobbled up as acquisitions typically imply.
Roeding says he will be staying on as CEO and board member and that Shopkick’s brand will remain intact, as will its “entire” leadership team. “We will be pushing forward with everything we have planned,” Roeding says.
Expanding Upon A Very ‘Loyal’ Population
“We’ve been approached by several companies over the years and have never pulled the trigger on any of them, but with SK Planet it is really a different story,” says Roeding. “They are so leading edge in what they do, and South Korea [in general] is probably the most leading edge country in the world when it comes to mobile technology along with the U.S.”
SK Planet has over 38 million people in its rewards program, Roeding says, adding that South Korea only has a population of roughly 50 million people. “Basically seventy percent of [the region’s] inhabitants are using [SK Planet’s] rewards program.”
Shopkick has its own achievements of late — particularly with the expansion of its agreement to serve as Macy’s beacon management platform for the department store’s 4,000 US locations starting this month. This was a big break for the Redwood City, CA-based company whose beacons were previously used in only two of the department store’s locations. Roeding suggests that Shopkick can make further advancements with SK Planet as its new parent.
“We’re going to learn a lot about how [SK Planet] scaled so quickly to [connect to] 38 million people,” Roeding says. “We’re also going to get additional resources and probably develop our products faster.”
SK Planet has cultivated an expertise in beacon technology Roeding says, adding, “so there’s a lot of things we can do now that we may not have been able to do before. I’m hopeful that with our acquisition, you’ll see us accelerate.”
Sk Planet’s acquisition of Shopkick comes amid a flurry of investment activity in the geo-marketing space: this past month alone saw location-based ad platform xAd raise $50 million to help promote the rollout of its FootPrints data visualization platform, while geo-data analytics provider Placed netted more than $10 million in funding from a variety of backers, including ad holding company IPG. In addition, Finland-based IndoorAtlas, which is marketing its magnetic positioning technology as an alternative to beacons, has also accepted a $10 million financing backed by China’s top search company Baidu this past month.
Explaining the reasoning behind its acquisition of Shopkick in statement, SK Planet cited Forrester Research that estimated online-to-offline shopping is slated to represent $1.4 trillion in spending by retailers and brands in the U.S. — an amount that is over four times larger than what is spent on e-commerce shopping.
As for Shopkick’s part in the bigger picture, Roeding feels the acquisition speaks loud and clear to the growth of mobile commerce.
“This is a big day not just for Shopkick but for mobile commerce in general,” he says. “I believe this is one of the largest acquisitions in the last decade for [the category]. It’s pretty awesome.”