Date
16 October 2018
Kang Hyunbin says LINE is leveraging its strength in games and stickers. Photo: LINE
Kang Hyunbin says LINE is leveraging its strength in games and stickers. Photo: LINE

INTERVIEW: LINE taps local partners to drive China foray

LINE Corp., a South Korean mobile instant messenger (IM) operator with 260 million global users, is betting on partnerships and customized local content to drive its business in China after its success in Japan, a senior executive said.

The company has joined forces with domestic players, notably Qihoo 360 Technology Co. Ltd. (QIHU.US), to bolster its distribution channels, gain insight into customer behavior and provide more local content.

“We are lacking distribution channels and knowledge of customer preferences and local content. These are our weaknesses,” Kang Hyunbin {姜玄玭}, head of business development, told the Hong Kong Economic Journal’s EJ Insight.

Since tapping Qihoo 360, LINE has formed partnerships with Alibaba Group’s TMall.com, travel information provider Mafengwo.cn, online dictionary Youdao.com and an English learning website run by NetEase Inc. (NTES.US), among others.

“These content providers can offer localized content our users want. We will continue to deepen our cooperation with them and add a few more local partners.” Kang said.

Main strength

LINE is moving on two fronts — online games and stickers — its main revenue drivers.

“Our strength is in stickers. Many of our customers use them to spice up their conversations,” Kang said. The company has four flagship icons — Brown, a male bear; Cony, a female rabbit; Moon, a man with round-shaped head; and James, a man with an exaggerated golden hairstyle.

LINE will continue to differentiate itself from its rivals by launching more stickers with Chinese characters such as a panda, Kang said.

“There are special localization elements in different countries. For example, smiles and angry faces can be found in every country with different cultures,” Kang said. 

In games, the company’s most popular apps are LINE POP and LINE Bubble! Altogether, its gaming apps had been downloaded 100 million times during a six-month period alone, Sina.com.cn reported in March.

Kang declined to disclose the number of users in China but said LINE is aiming to boost its global user numbers to 300 million by the end of this year. LINE already dominates the Japanese IM market.

To be sure, the company is benefiting from an aggressive push by its Chinese partners and from improvements to its technology. Qihoo 360 ordered its staff to exclusively use LINE instant messaging app, Sina.com.cn reported on July 3, evidently to promote the service against major rival Weixin, or WeChat in the overseas version. 

And last month, LINE signed an agreement with Baidu, Inc. (BIDU.US) that allows its IM app to be tested on Android phones in different Chinese provinces. Also, it launched free audio and video call services for the mainland users.

Rivals

China’s IM market has seen intensifying competition during the past two years, making it extremely challenging for foreign players such as Whatsapp Inc. to gain a toehold. Emerging players such as Alibaba’s Laiwang and Xiaomi Corp.’s Miliao have been trying to chip away at Weixin which enjoys first-mover advantage through Tencent Holdings Ltd. (00700.HK)’s flagship IM service QQ. 

Laiwang has one million users and a short-term target of 10 million, an Alibaba spokesperson earlier told EJ Insight. The next goal is 100 million users but with no time frame. The ambitious targets are in keeping with Laiwang’s grand launch on Sept. 23 by Alibaba chief executive Jonathan Lu.

Laiwang can leverage Alibaba’s advantage in the business to consumer sector by cooperating with TMall.com and Taobao.com while Miliao, launched in 2011, can tap into a younger market with its pre-loaded IM app in the Xiaomi handsets, some observers said.

– Contact the reporter at [email protected]

RA 

 

Ayishah Ma is a financial reporter on Greater China issues.

EJI Weekly Newsletter

Please click here to unsubscribe