I Walk the Line

Line Corp

Japanese application with a Korean mother, Line just recently celebrated its fifth birthday and already boasts an impressive 218 million users. This summer, it joined the Tokyo and New York stock exchanges with an estimated value of $ 5 billion.

Hello Kitty, Mickey and Pikachu still cannot understand their declining popularity. In Japan, Disney and Sanrio, the giants of the entertainment industry, face an unexpected competition: mobile applications. If Angry Birds had its fleeting moment of glory, it is the Line application that has established itself in Japan and in the rest of Asia as the new paradigm of kawaii-ness, the foundation of cute pop culture of Japan.

Born in 2011 in response to the Tohoku earthquake, Line was a simple instant messaging service, just like WhatsApp. Since then, the application has been a phenomenal success. In 2012, there were already 75 million users and by January 2016, Line had reached 218 million unique users per month. The secret of its success? Stickers.

Kawaii power

The Emoticons of the early 2000s evolved into a new concept: stickers. Every day, 2.7 billion stickers are sent via Line and very quickly, these characters — at the crossroad between manga culture and the Internet — have become as famous as Mickey Mouse and Miffy. In Europe — except for a first success in the Spanish market — they remain unknown, but in Japan Cony the Rabbit, Brown the Teddy Bear, the Japanese Moon cake and James, the narcissistic blond are the new pop icons capable of generating an annual income of more than a billion dollars.

“Designed by the creative department of Line, the stickers are imagined by their users through the Market Creators service. In the first 6 months of service, launched in 2015, over 230,000 users from 139 countries already created 18,000 stickers” explains Adriana Arias, Marketing Director of Line EU. An approach which also enables some users to make money: the top ten most-sold stickers have generated an average of 225,000 euros.

The 360° application

Despite the diversification of its products, chat messaging is still the core business on which to build other services, said its CEO Takeshi Idezawa at the Tech in Asia Conference that took place in Singapore in 2016.

Indeed, Line has established itself on the Asian market as the absolute leader of applications with a unique offering: it is possible to exchange messages (22.3 billion per day), make calls, listen to music, take pictures, read newspapers, follow friends, pay online or even call a taxi.

Line to conquer Asia

If the diversity of services may seem like a weakness, the secret of the application is its commitment to keeping the Asian audience engaged through mythical characters. Cony, Brown, Moon and James have become so famous that since 2015, the ultra kawaii gadgets are on sale in 18 stores in Japan, South Korea, China, Taiwan and Hong Kong.

The brand was able to create an entire universe around its characters and even managed to seduce the Indian market where Line has decided to present itself as the “Cat-Sticker Fun App”. To entertain and engage audiences, Line has also created an animated series, Offline Line, which tells the story of Moon, the salary-man.

In Europe, Spain is the largest market with 18 million users, followed by the UK and Germany. Why? “Because of high cost of telephone operators, the Spaniards were the forerunners on the market for instant messaging applications,” recalls Adriana Arias.

Selfies, games, videos and bots

Beyond stickers, how does the application manage to generate a turnover of one billion dollars? In 2015, 41% of its income came from video games starring the heroes of the application, Line Music to listen and follow artists, and Line Camera and Egg, applications dedicated to selfies. A quarter of the income came from the stickers as well as the Call Line service for low cost calls in Japan and abroad.

This year, Line has also opened its doors to bots with an API for independent developers. This will facilitate the arrival of companies and enable better service for its users: it will be easier to subscribe to online alerts or find answers through automated services.

If Line and its stickers are a deeply Japanese product, the company belongs to the Korean company Naver corporation (NHN). Valued at 5 billion dollars, Line entered the Tokyo Stock Exchange and New York in July in 2016. Its goal: to enter new markets. In Asia, Line rivals the GAFA and today, it is mainly present in Japan, Taiwan, Thailand and Indonesia.