Line Corp has an instant message for Facebook Inc: Asia is ours.
Country by country, the chat app from Japan is signing up new users by adopting a different strategy in each place. In its home market, cute bunny and bear stickers drew in everyone from schoolgirls to suit-clad businessmen. In Indonesia, Line built a classmate-connecting service after learning that alumni networks are a powerful social glue there. In Muslim countries, Line rolled out special features for people observing the Ramadan fast.
All of this is aimed at getting new users hooked onto Line before they have a chance to become loyal to a rival service, such as Facebook’s Messenger and WhatsApp, or China’s WeChat.
“It’s meaningless unless we have the top share,” said Takeshi Idezawa, 42, Line’s chief executive officer. “With regard to services in Asia, I can say that we are at the forefront.”
Idezawa’s ambitions go beyond Asia, where Line is No. 1 in Japan, Thailand and Taiwan. He is betting that the Tokyo-based company will also be able to snap up users in the Middle East, tapping into a pool of more than 1 billion people in regions where there is not a dominant messaging service. That, along with Line’s knack for making money from its app, bolsters the company’s plan to hold an initial public offering as soon as this year.
Line, a subsidiary of South Korean Internet company Naver Corp, has more than 215 million monthly active users.
One of Line’s biggest foes in Asia is Tencent Holdings Ltd’s (騰訊) WeChat, which boasts 697 million users. In some ways, WeChat is more than just a messaging service, with a myriad of features that let people book car rides, find dates and exchange money — all from within the app.
Line’s stickers have become so popular that they have a life outside of the messaging app. Taking a page out of Rovio Entertainment Oy’s Angry Birds franchise, Line operates 45 stores in 11 countries, where fans of Moon, Cony, Brown and other characters can buy dolls, stationery and even take selfies with enlarged versions of the characters.
They are so popular that Line is to open three new shops this year in China — even though the app is banned there.
Line is not just good at reeling in new users, it also knows how to make money off of them. A third of the company’s ¥120.7 billion (US$1.1 billion) in last year’s revenue came from virtual-sticker sales. Idezawa also appears to have figured out how to make advertising work inside a messaging app. Under one marketing program, companies can pay ¥40 million to give customers access to sponsored stickers for two weeks. People are more likely to pay attention to ads if they appear while chatting with friends, Idezawa said.
“We bring together communications, advertisement and emotions,” said Idezawa, who is working on a project to bring all of Line’s services under one umbrella called a “smart portal” in the near future.
One of the fiercest battles for messaging market share is happening in Indonesia. About half of Indonesia — at 254 million people, it is the world’s fourth most-populous country — would use smartphones by 2019, up from 33 percent in 2014, according to Statista.
“The goal right in front of us is Indonesia and we are almost there in terms of top share,” Idezawa said.
Line is also targeting other Southeast Asian countries, the Middle East and even South America. The company has 3,800 employees — average age, 31 — supporting services in 19 languages.
To snag local users, Idezawa dispatches teams of engineers, designers, marketers and business developers to each new country — they are empowered to come up with new features and services that appeal to those markets.
For example, in Latin America, Line rolled out a selfie app called B612, which has more than 50 million users.
Facebook, for its part, is keeping WhatsApp — a no-frills service with 1 billion users — just the way it is, even after buying the messaging app for US$22 billion in 2014. At the same time, Facebook has started to add features to Messenger, the companion to its social-networking site, letting people book car rides, read news and, yes, download stickers.
Idezawa says stickers are not just a visual gimmick: “It’s supported by very substantial research of the culture.”
The chief executive officer said he is going beyond stickers to connect people and businesses as he expands in Asia and beyond.
“I’m confident that we will be able to bring something special,” he said.
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