Line’s iconic characters feature heavily in the messaging app. Like Hello Kitty, they’ve become a big merchandising opportunity, from virtual stickers to plush toys. Pictured is Line’s office in Bangkok, Thailand. Photo credit: Tech in Asia.
It’s not the kind of “hockey stick growth” that startups love – in fact, it’s barely any growth at all. A couple of weeks ahead of an IPO that will see Line raise just over US$1 billion, there are concerns over how the messaging app is stagnating.
Line added 10 million monthly active users (MAUs) last year. For a global service, that’s close to disastrous. Line, now at 218 million MAUs, is adding so few new users each day that the company could invite them all to a daily party at a football stadium.
In the meantime, Facebook has been whipping Line with WhatsApp. WhatsApp is striding across hundred-million markers every few months – indeed, it has doubled its MAUs in the past two years.
Line, run out of the Tokyo office of Korean web giant Naver, became more and more dependent on its four main markets (Japan, Taiwan, Thailand, and Indonesia) last year, according to data from its own quarterly statements. That means the social network is not finding new audiences in larger nations where smartphones are booming, such as India or Brazil.
And now Mark Zuckerberg is pushing Facebook Messenger into Line’s territory.
Line is blocked in China, but it had already been trounced by WeChat when that happened.
Despite all that, Line is growing its revenues. It pulled in just over US$1 billion in revenue in 2015 – with about a quarter of that from those huge animated stickers.
Line is – for the third year in a row – the world’s top-earning app publisher thanks to cash from stickers, social gaming, online shopping, and an array of other services.
But even the rosy financials are not without risk. As Mark Zuckerberg pushes Facebook Messenger into more fun and customizable territory, including the kinds of stickers and online commerce the Japan-based firm pioneered, Line faces stiff challenges on every front.
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