Japanese mobile messaging applications Line upcoming IPO (initial public offering), financing of up to $ 1.14 billion in Japan and New York. Rather, Line Thursday will be the first in the New York Stock Exchange listed on the Tokyo Friday. By then, Line IPO so far this year will be the largest technology IPO.
Nevertheless, Line of future performance in other markets outside Asia remains unclear, the challenges have become increasingly severe.
Here are some facts about the Line, let's start talking about the most basic:
1) Line is a free messaging application, but its range of services beyond the basic messaging applications WhatsApp service, covering sticker (sticker), social games, video calls, and a host of other subsidiary applications.
2) Line wholly owned by the South Korean Internet company Naver, was founded in 2011. At that time the Japanese earthquake and tsunami cause communication interruption, Line came into being. The reason why the Line, headquartered in Japan, because of Naver and South Korea can not realize Line dominant messaging application Kakao compete. Line has about 2,500 employees, including about 1,000 in Japan.
3) Line in the world has 218 million monthly active users, of which about two-thirds at the maximum of four markets: Japan, Thailand, China Taiwan and Indonesia.
4) 2013 and 2014 Line have tried to expand the European and American markets, but last year, Line business focus return to Asia.
5) Line currently provide at least 35 applications, in addition to the core messaging applications, but also includes social games, music streaming service, taxi service, cartoon application and payment services.
And WhatsApp (10 more than one billion active users), Facebook Messenger (9 million active users) and micro-letter (about 700 million active users) and other messaging applications, users could scale Line is not huge, but in many ways led the news application development trends, especially commercial (monetization) aspect.
Line 2015 revenues topped $ 1 billion, of which more than 40% from its social gaming app purchases. Line Game Download cumulative amount of 628 million times, including downloads of 16 games (each) more than 10 million times.
Line user network is very powerful. Some might say, Line so many users concentrated in four markets, in terms of the coverage may not be a positive signal. But from another perspective, this means that user engagement with its four market is very high, friends and family members are in use around the Line.
Line said in the document, 61% of monthly active users every day to use Line. But in the Line of four major markets, the proportion as high as 73%. Because of this high interaction, only to Line an opportunity to apply their message into a chat outside of the integrated platform. For a messaging application, this is critical to its future commercialization. If we simply put ads inserted into the message applications, it is bound to affect the user experience.
In this regard, Line has been integrated messaging applications & ldquo; official account & rdquo; one of the pioneers. Therefore, Line not blindly use advertising to & ldquo; bomb & rdquo; user, but allows the user to accept & ldquo; & rdquo ;, promotion messages and these messages from the user precisely the concern brands. Currently, Facebook's Messenger also follow suit.
Line a large part of revenue (about 30%) from this advertising model. In addition, Line services also include advertising stickers. A few years ago, many consumers outside Asia that the sticker is just a fun fashion. But now, almost every news service applications offer stickers, and earn a profit.
Today, Line stickers have become a meaningful communication. Through the sale of sticker pack (a dozen or dozens of price $ 2 to $ 3), and its revenue has accounted for about 1/4 of total revenue Line. Last year, Line sticker pack revenue more than 270 million US dollars, an increase of 38%.
Of course, Line development is not smooth sailing. Today, the market competition Line facing increasingly fierce, urgent need to show investors that their ability to meet the challenge.
Let's start talking about Facebook's biggest competitor. Facebook is also actively create their own messaging application Messenger, and strive to be like, like Line, causing it to hit a & ldquo; Moneymaker & rdquo ;.
In the current environment, a messaging application by winning new market is almost impossible. Back in 2010 or 2011, Line or other applications might be able to form a local or promote cooperation inroads into a new market.
But things have changed, messaging application & ldquo; Gold Rush & rdquo; era has passed. Currently, most users and their friends around already has its own messaging application. Allows users to switch to other high-volume messaging applications is extremely difficult, almost in any country have no such precedent. For example, Viber is Myanmar's most popular messaging application, simply because the former Line and micro-letters to enter the market, Viber has been very favorable. Line has invested heavily in Myanmar to promote their use, and ultimately found it difficult to compete with Viber.
But Facebook is an exception. As a social network, Facebook has 1.6 billion monthly active users, and a large number of users to maintain interaction. In Thailand, Line is the biggest news applications, where Facebook has more active users.
In the future, when Facebook decided to markets outside the United States, especially to expand its market advantage in Line Messenger application, this will highlight the advantages of Facebook.
Currently, Facebook Messenger is still focused on Western markets. However, the current global almost every brand, every celebrity and every influential people are using Facebook. With the Facebook office in more and more countries, its Messenger application in the future is likely to become a major competitor Line.
Line after the listing, opportunities and challenges, and its future Facebook contest worthy of attention.
Other challenges facing the Line also includes:
1) dependent on the Japanese market
Line Nearly 90 percent of its revenue from the Japanese market. There were no clear indications that Thailand, India and China Taiwan Line will also bring significant revenue.
2) dependent on mobile games
2015, Line 40% of its revenue from the game, as the largest single revenue source Line.
Games can really bring a lot of money in revenue, but it can easily be eliminated. Current Line game business performance was good, but as we have seen in the past, as long as the poor performance of a game, it will drag the company's overall revenue.
Line in the IPO prospectus said: & ldquo; In the past, we rely on the few games get most of the game revenue. In the foreseeable future, we expect this trend will continue. & Rdquo;
3) subscriber growth slowing
As mentioned above, the current expansion into new markets is not an easy thing. Today, consumers have already selected your own messaging application, Line and other messaging applications can successfully enter a new market, and attract large numbers of users concern. For any listed companies, are essential to ensure that subscriber growth, the status of Twitter is the best example.
4) application of the ecosystem is small
In order to counter Facebook, Line by building their own applications and services network to increase user interaction, open a new revenue source. But so far, Line Pay, Line Taxi, Line Music, Line Man and Line TV and other yet to really take off, did not bring significant revenue to the company. In the future, to develop the company, please investors, these services also need to be strengthened.
Line to achieve profitability in 2014, net profit of 20 billion yen (US $ 19 million). However, due to investment in new services due to a loss of 7.972 billion yen last year (US $ 76 million). Due to expansion plans begin to emerge, Line could return to profitability in the near future remains to be seen.