Emerging TechnologyMobileWhat western social networking platforms can learn from Japan’s Line

What western social networking platforms can learn from Japan's Line

The Japanese messaging social app Line is widely used in the Asia-Pacific region and is now starting to make headway in the U.S. How does this company generate its substantial revenue?

What is Line? You may well ask. The messaging app developed by Japanese-Korean technology company Naver Corporation has taken off in Japan and continues to expand across Asia, especially in emerging markets like Thailand and Indonesia.

But what is surprising to me, is the increasing number of people here in the U.S. who are beginning to talk about it. There is plenty of information about the functionality of Line’s services online, including this overview from my fellow ClickZ Asia contributor Andy Radovic, which you can read here

What may surprise many of you is that Line has one of the highest app revenues worldwide, beating well-known companies such as Spotify, Time Warner, and Microsoft, according to a presentation from Shintaro Tabata, the senior vice president and head of corporate sales at Line. In his view, this platform should be added to every brand’s social and digital marketing plan in 2016 – whether they are in Asia or not. But equally, western social apps could learn from Line’s revenue model.

Currently, Line has more than 212 million users in 230 countries. It ranks as number 10 by number of app downloads worldwide, and as number one by revenue.

line-top-companies-2015

One of the key attributes of Line is the way it provides a variety of apps for free, but then offers additional paid services from content, to e-commerce platforms, to its famous sticker collections.

line-stickers-nong-easy-set-4-yeah

Line also provides an advertising and marketing platform to corporations interested in targeting users. In addition, revenue is coming from character licensing, and merchandising sales in several countries. 

Hong Kong’s Ocean Park, for example, ran a ‘Summer Splash’ campaign around its partnership with Line in July and August, including the sale of Line merchandise throughout the park.

line-ocean-park-summer-splash-500

What is Line’s appeal? Here is what Tabata had to say:

Mobile apps

One of Tabata’s key points to marketers is the increasing global consumer shift to smartphones – and how mobile needs to be the primary targeting device. He said user engagement is shifting from web to app at a 28 percent to 72 percent ratio. So the big challenge is to keep users engaged. With 83 percent of apps being zombie apps, this is an increasingly significant challenge for marketers.

line-zombie-apps

In the highly competitive app market, Line is thriving, because it is building an ecosystem of mobile services in addition to its messaging platform.

“Asia is well ahead in mobile Internet services and messaging apps, and it is the first to develop and release them,” Tabata said.

Line as a distinguished business

Line differentiates itself from other apps for business in a number of ways.

  1. Ad blocking is not an issue for Line, because the consumer has to first voluntarily agree to connect with a business, before it can contact them. Once connected, the user sees the brand as a connection, rather than an advertiser.
  2. Line also works with brands to help create opportunities for connecting with their audiences. For example, Burberry went into a global partnership with Line to live-stream its Prorsum Autumn/Winter 2015 women’s wear runway show from London Fashion Week via the app.
  3. No technology-heavy development efforts are required for brands setting up an official account on Line, as their API can be easily connected to messaging server data and marketing platforms of the brand’s choice.

In conclusion

Advertising is the main source of revenue for most social networking sites (SNS). While Line may not fit into the same SNS brackets, its business model may offer insights to others out there looking at ways to generate revenue.

For brands operating inside Asia and beyond, this is one app that is worth keeping an eye on.

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