The Growth and Dominance of LINE Messaging App

If there’s an app that I use everyday, it would be the popular messaging app LINE.

How it all started

In the beginning, it was just brief moments of logging into the app, then closing it in favor of Facebook or texting. Soon, my girlfriend started using Line to text our friends, and even call them whenever the need arises. While most of my friends are still using Facebook, I started noticing a much more personal level of communication happening within Line’s messenger app. The cute doodles, called stickers, adds flair and color to the conversation, especially when you really want to expresses how you feel.

Obviously, our circle of friends starts using LINE as a replacement to Facebook group chat, with no signs of going back.

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And then my girlfriend discovered I Love Coffee, one of LINE’s biggest games. She pestered everyone in the household to play the game. Everyone started playing it, from her parents to her youngest sibling. LINE then took up a spot in everyone’s smartphone or tablet. Everyone eventually started using it for communication, gaming, and entertainment consumption.

LINE just became a phenomenon around me.

Roots in Japan

LINE was never meant as an entertainment. When the great Tohoku earthquake happened in Japan, mobile communication is crippled. Many did not know this, but to facilitate communication and relief efforts over the Internet, NHN created LINE. When it was released  to the public in 2011, it became an unexpected hit in the country.

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After 2 years, NHN realizes LINE is the software that they need to scale and focuses its resources to accommodate the huge number of people it serves. This led to the creation of LINE Corporation, which is now responsible for operating the application, as well as other tech products like Naver Japan and Livedoor – a Japanese blog publishing platform.

By July 2013. LINE was a hit not just in Japan, but also a worldwide success. It reached Southeast Asia, including the Philippines, where it even released a fun TV ad.

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The LINE Phenomenon

2013 is an incredible year for LINE. As a mobile application, it competes with a handful of other similar products such as Kakao Talk and Viber. LINE rose to the competition: data from App Annie suggested that LINE was the 6th most downloaded app in Google Play and iTunes OUTSIDE of games in 2013.

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Success also sprinkled over to its parent company itself, as LINE CORP became one of the top publishers worldwide:

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The Number 1 App in Revenue Generation

What’s really interesting this time around is this: Line is the world’s number 1 non-gaming app in terms of revenue.

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And while different countries in the world has their own version of top apps in mobile platforms, in Japan, at least, the winner is clear: LINE:

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Fun With Stickers

Much of LINE CORP’s revenue comes from games. However, the messaging app has an interesting source of revenue – stickers.

Described as “oversized cartoon like emoticons” used in chats, stickers are widely popular among its users. This is evidenced by the fact that 20% of the company’s revenue comes from stickers.

I have seen some of these stickers in the past by the old messaging apps, but rarely did these stickers reached the a scale where it contributed as a significant source of revenue.

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Most of these stickers are also free. Some are used for charity as well, like last year, when LINE announced that every money spent on purchasing a special pack of stickers will be donated to the victims of Typhoon Haiyan in the Philippines. The project was a success.

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Some sticker packs are also free, but sponsored by certain companies. For example, LINE released its first photo stickers featuring Jeon Ji-Hyun as away of promoting the Korean actress as well as the Korean drama – “My Love from the Stars”. With LINE available across Asia, these stickers display the language of your area, thus tailoring them to various local users.

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While LINE’s revenue is still nowhere near Facebook’s revenue, LINE has made itself known to everyone by being the top revenue generator in the smartphone and tablet industry last year.

Even without the data from App Annie, one who is following the smartphone industry for sometime will notice that the company is putting pressure on the big ones. For example, Facebook revamped its own messaging app to accommodate texting of non-online friends as well as the introduction of stickers (like the infamous thumbs down button). This is in response to the threat the company is seeing against messaging apps like LINE, We Chat, and Snapchat, who slowly eats away an important market segment – teenagers and young adults.

As businesses learned that this market segment are moving to LINE and other messaging apps, their marketing efforts are also realigned to target them.

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There are a growing number of messaging apps in the world

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While LINE has established a presence in Asia (and in Spain), it faces competition from the likes of Kakao Talk, WeChat, and WhatsApp.

WeChat is leading in China. WhatsApp has a strong presence in the United States, where LINE has not made a strong impact so far. Kakao Talk is dominating in South Korea. The future seems nothing but growth for the messaging app industry. Despite the intense competition, LINE has already started establishing itself as a market leader in Southeast Asia, through key partnerships with telcos such as Singapore’s Starhub.

It will be interesting to see how the messaging app industry will continue to evolve this year.

Related Stories:

• StarHub unveils Singapore’s first LINE mobile pre-paid plan
• StarHub customers get early exclusive access to LINE’s Chinese New Year stickers
• Believe it or not, there are 300 million users on LINE right now
• The irony: Most of the money users spent on chat apps, was not spent on chatting experiences
• Messaging app LINE releases tear jerking video targetted at Thailand users

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