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Line Taiwan and Thailand units to lead SoftBank Z's Asia expansion

Local operations custom-develop new services that cater to their own markets

The Line TV service developed by Line's Thailand unit has grown into a large international business servicing over 40 million subscribers in 19 markets. (Photo by Kaori Yuzawa)

TOKYO/BANGKOK -- Japanese messaging app Line operator is beefing up its research and development capability in key Asian markets, including Taiwan and Thailand.

Line is seeking to establish itself as a leading "super app," an all-in-one experience to access to many different services, in such markets as Japan, Taiwan, Thailand and Indonesia. Local units have introduced new services tailored to the needs in each region in their efforts to achieve the goal.

Line is expanding such new services to other countries under its strategy to create a platform to offer various services under one umbrella that reigns supreme in East Asia. 

Z Holdings, owned by Softbank Group, is to merge with Line next year, with the intention of using Line's Asian resources for its expansion in the region. 

The company held an online meeting Nov. 25 to introduce the app's new technological features to engineers. "We recognized that people from many countries were attending the event," said Line Chief Technology Officer Euivin Park. About two-thirds of the 8,000 or so attendees were in other countries.

The same event last year, held in Tokyo, attracted mostly Japanese engineers.

Line has significantly expanded its overseas workforce. In addition to 2,700 employees of its head office in Tokyo, the firm employs 900 people in Taiwan, 400 in Thailand and 100 in Indonesia.

The company started offering its messaging app in the three markets in 2013-14. It has since been seeking to ramp up its presence in these key markets by expanding its services.

The development of new services in these markets was initially controlled by Line Plus, Line's South Korean unit. But local units in three countries now play central roles in developing new offerings for their respective markets.

Line stresses that "it is vital to incorporate local cultural elements into the development process to offer services that really meet the needs of local consumers rather than localizing services that have been developed somewhere else."

This approach has proved successful in Thailand, where the local unit has developed the LINE TV video-streaming service. Rolled out in 2015, LINE TV has grown into a large international business with over 40 million subscribers in 19 markets. In addition to showing local TV dramas, LINE TV also produces original videos and provides content to Netflix.

Line has 400 employees in Thailand engaged in developing services locally. 

In October, Line's Thai unit teamed up with major commercial bank Kasikornbank to launch LINE BK, integrated banking services provided through its social media platform, the first of its kind from Line.

Line plans to start offering LINE BK in Japan, Taiwan and Indonesia, as early as 2021.

Line is the dominant messaging app in Taiwan, where 21 million people, or about 90% of the island's population, use the service.

Line has expanded its portfolio of services in the market, adding a news site, an online shopping site and, from July 2019, a "fact-check" service to the list. In cooperation with four fact-checking organizations, Line's tool to verify the factual accuracy of news stories and public remarks played a role in the island's hugely successful battle against coronavirus.

Meanwhile, Line has been facing an uphill battle in its efforts to conquer the Indonesian market, one of the four key markets for the company, along with Japan, Taiwan and Thailand.

Line has found a nemesis in WhatsApp, a messaging service operated by Facebook, in Indonesia. Its ambition to become a leading supper app in the country has been frustrated by Gojek, a ride-hailing app that has been expanding into other areas.

When Line debuted in Indonesia, its stickers, a feature WhatsApp does not offer, helped it gain popularity. But its growth quickly fizzled out and the number of subscribers shrank 60% in three years to 13 million in September.

"We have failed to erode the dominance of WhatsApp," said a senior Line executive. "The No. 1 status is the only thing that matters."

According to Digital 2020 report by We Are Social of the U.K., the social media usage ratio of Line in Taiwan is 86% and in Thailand it is 86%, far higher than Japan's 61% and Indonesia's 50%. 

Competition for becoming the most favored super app is intensifying in Asia. Tencent of China, which owns WeChat multi-purpose app, has invested in a Philippine mobile pay service as well as Gojek, under its ambitious super app strategy, ramping up its footprint in Southeast Asia. 

The planned Line-Z Holdings merger will go a long way toward determining the future of Line's overseas strategy. How Line will benefit from the combination remains to be seen. But a senior Line executive said, "Softbank Group's financial muscle could open up new opportunities for our company." 

Z Holdings Chief Executive Officer Kentaro Kawabe emphasized, "We would like to use Line's overseas bases in our strategy for international expansion." 

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