Japan’s Line Gets Ready for Its Next Act: Becoming a Global Tech Player
It is the world's third largest app, and yet few have heard of Japan's Line outside of Asia.
Line, a subsidiary of South Korean Internet behemoth Naver, came to life out of response to the 2011 earthquake and subsequent tsunami that rocked Japan and put a halt to major areas of Japan’s phone system.
Up to that point, the Japanese did not have a common communication platform that was based on access to the “real” Internet. Instead they used other network applications that were tied to traditional phone lines, thereby leaving users communication-less in the face of any disruption caused by a natural disaster or other severe events.
Within its first year alone, Line was able to gain a user base of more than 50 million subscribers. In comparison, it took Facebook nearly three years to get this kind of traction. In its infancy, Line was merely a messaging app that allowed users to communicate through text messaging and calls.
But the platform has also empowered advertisers to create brand pages to develop and communicate with their respective communities. McDonald’s, Coke, Toyota, and Ralph Lauren are just a few of the growing number of advertisers creating a brand story on the platform.
Fast-forward three years and Line’s global users now stand at 560 million and growing, pushing it comfortably into the top three most widely used apps globally, just behind WhatsApp and WeChat.
This meteoric growth has been nothing short of amazing. But it’s Line’s next act that I believe will put it firmly on the map to be a solid global technology brand, while also separating it from its rivals by adding more uniqueness to its platform and service.
Line is starting to innovate and evolve into what its chief operating officer (COO), Takeshi Idezawa, calls a lifestyle brand. He says, “The keyword of our future is ‘life’…Line is the smartphone gateway for your life.”
The app is looking at how Line can support people in their daily lives by really focusing on two key themes: convenience and entertainment. These themes are illustrated through the following new ventures it is aggressively moving into.
Line Pay: Announced in October, Line will soon launch a payment service using a prepayment system allowing people to buy goods and services either online while on-the-go or directly through local stores, all linked to their bank account or credit cards. This is following WeChat’s move into the payment arena earlier this year, when they launched WeChat Payments.
Line Taxi: Another recent evolution to its business, Line has partnered with NihonKotsu, Japan’s largest taxi company, where it is now linked up to 22,000 taxis in greater Tokyo, all accessible for those with a Line account. This move should position it to combat Uber, which has started to make aggressive inroads in Japan since its launch last year.
Line Wow: This will be Line’s first ever on-demand e-commerce service complete with a full logistics setup powered by one of the top logistics providers in Japan. As a first phase, Line Wow will focus on food delivery but will soon expand into other products and services.
Line Maps: This is a new indoor map application that specifically focuses on helping users navigate through indoor shopping centers, department stores, and other commercial properties. Users can select the destination they wish to go to and through Line Maps, they will be able to see the optimal route on how to get there with additional details like phone numbers, hours of operation, and more.
Line Game: Gaming has been a big contribution to Line’s total revenue. To date its reputation has been built up from more “casual games” like Disney’s Tsum Tsum. But it is expanding and diversifying its lineup to get into more strategic RPG-based games like Chronicles of Albion, Legion of Heroes, and others. According to Idezawa, his ambition is to be the biggest and most popular smartphone communication platform in the world.
The potential for brands, both existing and new to the platform, is vast. Now with Line Pay, users will have the opportunity to shop and buy directly through the brand pages that they favorite. For example, if you are a fan of the Uniqlo account and they are serving up deals on a new winter collection, you’ll have the chance to buy directly through Line Pay. This feature, along with Line Maps and Line Game, is providing brands with more opportunity to have a presence on the platform in new shapes or forms. I believe this is a win-win both for brands and users of the growing platform.
However, one of the reasons Line is so successful in Asia is in large part due to its “kawaii” (“cute,” in Japanese) appeal through the use of its stickers and fun emoticons. As Line looks to diversify its product and service offering and its expansion westward, it is unclear if this cuteness will truly translate to Western audiences, as there seems to be a clear cultural mismatch.
The question also remains whether Line can successfully operate in so many different services, as they look at Line Pay, Taxi, Maps, Game, etc. But it is doing a solid job at repositioning it from the humble beginnings of just another messenger app to becoming a major Japanese – potentially global – technology business.
