Japan-based messaging phenomenon Line Corporation is keen to work with operators in Europe as it prepares to launch its services in two key markets next year.
Sunny Kim, CEO of Line Europe, tells European Communications that Germany and the UK will get their hands on the company’s famous stickers, and much else besides, from Q1 next year.
Line is keen to build on impressive growth figures. It has reported year-on-year revenue growth of 146 percent in Q2 and 83 percent (to reach €157 million) in Q3.
It has 560 million registered users globally, although it counts just 170 million of them as monthly active users.
Outside its home market, which has 54 million registered users, Thailand, Indonesia and the US are its largest markets.
Spain has served as a test-bed in Europe, with Line building up a following of 18 million users since December 2012. Now, the rest of the continent is in its sights.
Kim admits it’s “hard to make an impact” in Europe without operators and says no such deals have yet been signed in either Germany or the UK. Discussions are ongoing, however.
She says: “They want to know how we can drive data consumption. We can definitely help with that.”
First however, Kim is keen to dispel a myth that Line is just an Asian WhatsApp.
Alongside messaging, voice and video calls – it has just hit the 15 billion call sessions milestone – the company offers games and a range of “family” apps that include anything from antivirus software to language tools.
It also has a developer market that encourages anyone to make the company’s famous stickers and sell them online.
But as of last month, the company has much bigger plans. Line announced the launch of an m-payments service, a taxi app similar to Uber, an e-commerce service, an indoor mapping app for shopping centres and a music streaming service.
All the new services will be available in its home market initially, but COO Idezawa Takeshi (pictured) tells European Communications that the company plans to launch some of them in Europe in the future, depending on how they perform in Japan.
In particular, Line Pay is set for a wider expansion. Says Takeshi: “Our services can have global significance.”
He is keen to build more relationships with operators too. “We have a very good relationship with Telefónica, having announced an exclusive partnership to bring our services to their subscribers that use the Firefox OS in Venezuela, Peru, Spain, Colombia, Uruguay, Brasil and Mexico earlier this year.
“Overall our relationship with carriers is good… we see them as partners not competitors,” Takeshi adds.
Announcing the partnership in February, Francisco Montalvo, Director of Group Devices Unit at Telefónica said: “Line’s messaging app enables us to strengthen what we are already offering our customers and will open up even more collaborative opportunities in 2014.”
According to Takeshi, smartphone messaging apps are “the heart of the mobile internet” and “a gateway to all sorts of opportunities”.
He says this is good news for operators: “Messaging apps can play a vital role in terms of encouraging users to use more data.”
Although partnerships with companies such as Line are much more common in recent times, operators remain wary of striking deals that leave them with the thin edge of the wedge.
But although expansion into Europe is the obvious next step for Line, it too faces challenges.
Says Kim: “We need to be local [but] the diversity of countries in Europe is a challenge for us… we are learning a lot. Compared to Asia, the speed of [take-up] of new services in Europe is slow.”
CCS Insight analyst Martin Garner tells European Communications: “There are already quite a few providers similar to Line in Europe, so the question is what role does it see itself playing?
“The market is pretty much saturated and Line will rely on shifting traffic from other providers. To do so it will have to raise awareness and position themselves. It will be pretty challenging.”
Takeshi admits as much by saying TV and advertising played a key role in Line’s success in Spain.
Kim says the company is looking at signing deals with brands and celebrities as a way to differentiate itself and claims it has “a collaboration” with Sir Paul McCartney.
The company’s new launches look well timed as it looks to persuade European operators of its worth amid competitors such as Facebook-backed WhatsApp.
But it could yet be a long and winding road ahead.
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