Messaging App as a Lifestyle Platform

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A new product called LINE Life Global Gateway was recently announced, aimed at growing messaging app Line’s network of services. The strategy will see the expansion of services from simply communication to include e-commerce, payment, media and entertainment services.

Line said in September 2014 that it intended to delay an initial public offering to “expand business globally.” A global investment fund has been established, worth $42 million, to attract companies wanting to help establish greater diversity in the firm’s portfolio. The strategy is fundamental to ensuring Line does not become reliant on future revenue from its messaging app or games platform. Line have indicated they are talking to potential companies but have not revealed further information.

The newly appointed Line CEO, Takeshi Idezawa, stated, “the keyword of our future is ‘life’. Line is the smartphone gateway for your life.” Industry observers have noted that Line intends to expand into a range of services that touch all aspects of smartphone use and not just as a replacement for SMS texting.

An example of this is their development of Line Pay, a mobile payment service integrated into its messaging app. Line Pay is due to be extended in the near future to allow customers to transfer funds to one another. In addition, Line has already expanded to food delivery, indoor maps and taxi calling services in Japan.

In line with western companies, such as Facebook messenger and Snapchat, Asia-based messaging companies are following Line’s lead. WeChat and KakaoTalk have announced weakened financial performance based in part on poor sales of online games.

Line’s future strategy was justified by its recent announcement that it now has 181 million monthly users, and although this represents a 62 percent increase in Quarter 4 revenue it was still short of industry expectations.

It is unclear how this strategy will energise Line’s future fortunes but their recent investments in Japanese game maker Gumi, 4:33 Creative Lab and the purchase of MixRadio from Microsoft show Line is taking a proactive approach to increase its market share.

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