February 20, 2017 1:00 pm JST

Line profits as companies invest in diverse work styles: CEO

Businesses use chat app to improve communication, interact with customers

Line President Takeshi Idezawa

TOKYO -- Companies are showing interest in services such as Line to improve in-house communication as workers' schedules and lifestyles become more diverse, the chat-app operator's chief executive said.

Deeper integration of smartphones and the internet with everyday life will bring Line a host of new business opportunities, President Takeshi Idezawa told The Nikkei during a recent interview. Excerpts from that discussion follow.

Q: What has been the response in Japan to services tailored to individuals?

A: The number of smartphone users is on the rise, as are the amount of time and money people spend on their devices. Customers across generations engage with content on Line. Casual games are particularly popular with women in their 30s, while those in their 30s and 40s will pay for manga comics. Smartphones are blending the internet and real life, expanding business opportunities along the way.

Q: Line recently began offering low-cost smartphone service as a mobile virtual network operator [a carrier leasing wireless infrastructure from larger rivals].

A: Many people see data transmission fees as a major burden. Because we have designed Line to offer a stress-free user experience and kept prices low, people now use the app to watch over their children or video-chat with their grandparents, for example. Virtual operators used to be seen as intended for those knowledgeable about the internet. But we aim to make them truly popular this year.

Q: How do you understand consumer spending as a whole?

A: More people have different values from older generations, which sought to own objects, and so you can't necessarily call personal spending robust. People will spend money on quality things, but they're choosy.

Q: What about corporate investment?

A: Companies are interested in investing, given efforts to overhaul how people work. To improve efficiency, businesses need to gain a clear picture of working hours and cut waste. Many are saying they hope to use Line to facilitate smooth in-house communication.

Companies are even interacting with customers at call centers via Line, rather than by phone. That way, one worker can deal with three or four cases at once. Several times more people apply to work at these centers than there are job openings. Many people -- particularly young people -- feel as though using the phone is a bother, and job seekers are looking for new ways of working.

The internet advertising business continues to grow, led by three fields: smartphones, social media and videos. We have a very wide client base. In Japan alone, Line's service for small and midsize businesses has been used in more than 1.3 million instances.

Q: How is the Asian business, in markets such as Thailand and Taiwan?

A: Per-capita gross domestic product is on the rise -- everyone's becoming prosperous. People used to say running a gaming business in Southeast Asia was impossible. But people will pay for and play good games. It's a major market, with a growing middle class.

Q: What sort of demand do you see artificial intelligence creating?

A: We're headed toward a world where you can ask an AI for answers to any question. A variety of devices can be used for this -- headphones, for example, or glasses. Map services could give their users verbal directions, rather than having them follow a map on their smartphones. We have kicked off research and development to prepare for a post-smartphone world.

Q: The appearance of inappropriate information on content aggregation sites has hurt trust in the internet industry.

A: I would like to make it easier for readers to judge the reliability of what they see on aggregators -- for example, by looking into the poster's background and credentials. [Line] also held more than 2,000 classes in schools in 2016 teaching students how best to use the internet. We run a piece of infrastructure that has thoroughly embedded itself in modern life, and so hold responsibility.

Interviewed by Nikkei commentator Keiichi Murayama.

LINE Corp.

Japan

Market(Ticker): TKS(3938)
Sector:
Industry:
Technology Services
Packaged Software
Market cap(USD): 7,878.26M
Shares: 219.31M

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