TOKYO: Leading instant messaging providers, such as WhatsApp and WeChat of China, are facing a growing challenge from Line, a rapidly expanding Japanese-Korean rival which is building up an international following.
By adapting to local cultures and branching out into other services, the company says it has gained 175m monthly active users, of whom 85% come from outside its home market of Japan, the Wall Street Journal reported.
A subsidiary of Naver Corporation, the Korean internet content operator, Line has been in business since only 2011 and has extended its consumer base beyond its core Asian market into Latin America and Spain through marketing campaigns and responding to cultural preferences.
For example, the company says it now has 16m registered users in Spain – a country with about 24m smartphone users – after launching a marketing campaign with two of Spain's largest football clubs to offer emoticons that featured team players.
Similarly, Line suddenly became popular in Brazil after it adapted its "Moon" emoticon to suit local taste for a less "cutesy" character.
And with 10m registered users in Mexico, it now plans to target the US, which Line COO Takeshi Idezawa describes as a priority while also recognising that it could be "a difficult market".
Concentrating initially on US Hispanic audiences, Line has already launched its first major TV advertising campaign in the US with a campaign broadcast on Telemundo, Univision and other Hispanic networks. If successful, the company says it may extend its TV advertising to the rest of the country.
Industry observers also attribute Line's global expansion to its willingness to branch out into other services, such as e-commerce, digital marketing and games – a development that Yahoo co-founder Jerry Yang has described as being about building a consumer company.
For example, mobile games alone accounted for 60% of Line's revenue in Q4 2013 while 20% came from the sale of digital stickers, or emoticons, and last year the company is thought to have recorded sales of $505.8m compared to an estimated $20m for WhatsApp.
Data sourced from Wall Street Journal; additional content by Warc staff