$8.6 billion reasons why western social media giants are looking at LINE

$8.6 billion reasons why western social media giants are looking at LINE

If social media was Las Vegas, Facebook would be the desert’s neon dominator. Facebook holds most of the cards, and importantly, the most chips.

Typically, the player with the best cards and the most cash wins.

But like Macau is a legitimate contender to the gambling mecca that is Las Vegas, Line is a tech company from the East that might show the West how to play. 

An introduction to Line

In the beginning, Line began as a communication service in response to the natural disasters of 2011.

Most people understand it to be a chat app. Actually, it’s not accurate to describe Line this way. It is broader and greater than a chat service.

Before examining the advantages Line offers over American tech giants, here is its brief introduction and history:

  • Line is owned by South Korea’s Naver Corporation. As Line looks at expansion to the West, it is the biggest tech IPO of 2016, with a valuation of $8.6 billion.
  • According to The Drum, it is the world’s seventh largest chat app. Line has over 218 million users worldwide, with almost 70 per cent of those based in Japan, Thailand, Taiwan and Indonesia. 
  • Line is mobile first. This positions the company well with the growing trend of mobile first internet usage across the world. Thailand, which is the world’s leader in mobile internet usage, is a market advantage for Line. 
The world's no.1 mobile users are in Thailand. 

The world's no.1 mobile users are in Thailand. 

  • The Nation reports that service has innovated past chat. Line Corporation announced in March that its latest five-year mission is to shift from being only a messenger-service provider to being a smart portal to help close the distance between people and information and services.
  • The Nation adds that Chief executive officer Takeshi Idezawa said Line's goal was to become an entity that is as comfortable to be with as the family and friends that people have, providing an environment where anyone's day may literally begin and end with the service. 
  • In 2015, stickers accounted for more than a quarter of the company’s $1.1 billion revenue. According to Quartz, only 4% of its 218 million active users spent money with the company in March. 

Line has many aces up its sleeve.

Here are seven reasons why western tech giants are looking over their shoulders.

1. Line is diversified

It is a powerhouse in messaging, entertainment and merchandise

2. Affection and brand creation = fandom

Line has fandom. Facebook and other large social media players do not have fandom.

The company has created a culture around its characters. Line’s characters feature through their sticker programme and are merchandised through Line retailers and joint promotions.

Approximately 2 billion stickers are exchanged daily.  Harry McCracken from Fast Company explains why this extension of kawaii has been embraced. 

Line’s stickers express emotions that would be difficult to sum up in text tapped out on a smartphone.Because of the Line stars’ vivid personalities, people bond with them in a way that they don’t with emoticons or emoji—or with stickers from other apps that cribbed the feature after it took off on Line, such as Facebook.
"Stickers like Cony and Brown are fun to use because they have a wide range of emotions, without many limitations," says Melissa Palacios, an artist in San Francisco whose own sticker featuring a tabby named Tora was recently voted Best Sticker in the Universe by Line users. "Anyone can see a little bit of themselves in them."

Line’s brand affection is a distinct advantage in comparison with other social media operators.

Cross cultural phenomenon - Line characters. Image credit - http-//mobilemarketingmagazine.com

Cross cultural phenomenon - Line characters. Image credit - http-//mobilemarketingmagazine.com

3. DIY brand equity

Line recently opened a Creators Market, in which users were invited to create their own sticker design.

It was a masterstroke.

Users bought a total of 1.4 billion of these stickers in that period, for a gross of about $30 million.

Aside from the revenue success, the DIY appeal increases user investment, engagement and ownership of everything that is Line. Other social media platforms take note. 

4. Line moves into stage three – lifestyle solutions

Line’s fandom feeds into lifestyle integration.

As Facebook and others have moved into stage two of their platform, which is ecommerce, Line is already at stage three – moving into parcel and food delivery services.

Line Man moves into stage three - lifestyle solutions. Image credit - asia.nikkei.com

Line Man moves into stage three - lifestyle solutions. Image credit - asia.nikkei.com

Line Man launched in May 2016. In Thailand, Line Man operates as a food delivery service created in partnership with Wongnai, the country’s top restaurant review website. Now customers can have food delivered to their door from over 10,000 restaurants. 

5. Content delivery advantages

Line’s Chief Executive Officer Takeshi Idezawa mission is to become the number one news service for smartphones

International ambitions - Takeshi Idezawa, CEO of Line Corp. (Photo- Kiyoshi Ota/Bloomberg)

International ambitions - Takeshi Idezawa, CEO of Line Corp. (Photo- Kiyoshi Ota/Bloomberg)

Line TV was launched in February 2015. Some programs attract 3 million viewers. 

While Whatapp's commands more users, in content delivery, Line does it better.

Jessica Goodfellow from The Drum writes about The Economist’s use of Line.

The publisher’s ethos on Line is to explain the world in bitesize messages.
The Economist Community Editor Denise Law explains –
“The way I describe Line as a platform is a like a suped up version of Facebook Messenger but you also get to do things like make payments on it, chat to your friends, share things, buy stickers and play games. It’s like a one stop shop for everything you want to do on the internet.”
Goodfellow adds -
“That scope has pushed the publisher to post exclusive content on the app that is not on Facebook or Twitter. It’s why the Economist is the first publisher to send voice push alerts on the platform, the first of which featured the sound of the Mekong River as well as an audio clip interview with a Southeast Asia bureau chief talking about Myanmar. Further tests are on the way."

Early statistics on the trial are positive, with a greater click through rate on Line delivered content compared to Facebook or Twitter.

6. Teaming up with big business

Line is business partnership focused.

In Tokyo, Line Friends is the recently opened retail outlet with all the merchandise for friends.

In Line popular markets like Thailand, the Line ID is commonly advertised, overtaking the display of the old-fashioned email.

Among big business that Line has linked to - Star Wars, Disney, KFC, Toyota and Seven Eleven across its games and sticker platform.

Line Pay is aligned with Bangkok’s rail transit Rabbit card. Line Pay has over 1.5 million users

New products and services to expand the company’s ecommerce reach include Line Points and Line Pay Card.  

7. Marketing advantages – the digital version of direct mail

The Nation reports:

Line's advertisement-distribution platform will be expanded beyond its previous one-way mass delivery systems appropriate for only larger businesses, to deliver more relevant and personal advertisements to suit any business size, the company says.

Fast Company expands on the marketing potential: 

The fact that these commercial missives show up in the same stream as private chats (and only after a Line user has chosen to follow a brand or person) gives them a higher profile and greater sense of urgency than other forms of social marketing such as Facebook ads and Twitter’s promoted tweets.
"It’s like direct mail," says Ben Thompson from stratechery.com. "That’s a part of marketing that very few people pay attention to, but it’s super-effective. A brand gets a direct connection to the customer. It’s very powerful, and in the long run it has the potential to be very compelling."

Can Line successfully roll the dice?

Line Corp. has an instant message for Facebook Inc.: Asia is ours

But how will the company fare in western markets?

Some view Line has an Asian app, wrapped up in its cute characters, too culturally different to amass users in the West.

Only time will tell if the bridge from East to West can be crossed.

For now, Line has the diversity and product innovation to demand a seat at the West’s playing table.      


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