The business model of LINE.

Do you ever dream of an app that can simplify your everyday life? One that you can use to make a reservation at a restaurant, order a taxi, and stay connected with family and friends? All through one single platform? Then step into the world of LINE, the messaging Super App that turned a tragedy into a digital connectivity triumph of revolutionary proportions. Born in the wake of the devastating Tōhoku earthquake, LINE’s evolution tells a story of innovation and resilience in the face of strong competitors such as WeChat and Alipay. Discover how their strategic choices and user-centric design are a structural part of the bigger picture, perfectly in LINE with their vision. 

From tragedy to lifeLINE.

It's the year 2011. and Japan is hit by the great Tōhoku earthquake, followed by a devastating tsunami. Phone lines are down, eliminating the main option for communication, causing confusion and chaos among people and businesses. As the crisis continues to unfold, employees at NHN Japan, an internet and online gaming company, find themselves disconnected. They decide to use their combined tech expertise to create a solution: LINE, a messaging app that reconnects their team and turns a moment of crisis into a technological innovation.

Flipping out over smartphones and stickers.

Fast forward one year. Flip phones have lost their charm and touchscreens have stepped into the spotlight. LINE stands at the forefront of this shift by adopting- and actively contributing to it. They flip the script on traditional phone bills and begin a new era in which paid phone calls and texting become a thing of the past.

LINE’s ambitions reach beyond plain text messaging. While similar apps are fussing over the next best emoji, LINE is turning into an emotion-rich communication app. They introduce a platform where digital creators can stick(er) their artistry on everything. That is right: stickers – those small, emotion-packed mini works of art that ‘speak’ louder than words, even in silent mode. LINE allows anyone to create stickers from scratch or use its popular ‘LINE’ of characters. This feature caused considerable growth of the platform’s user base, and it has become one of its driving revenue streams. In 2020, LINE’s sticker revenue amounted to $200 million. Its users are sending over 510 million of these miniature artworks per day. The stickers have become an extension of the user’s emotions and turn every ‘LOL’ into a work of art.

Chasing smiles, not numbers.

Fast forward another year and the world has shifted once again. LINE’s startup phase has gained momentum and a digital wildfire that ignited in Japan has quickly spread across Thailand, Indonesia, and Taiwan. Less than a year later, LINE has no fewer than 30 million active users and by 2013 this number has more than tripled. Strolling through Japan, it was harder to avoid a LINE chat than a sushi restaurant! The 100 million user question is this: how did LINE grow so quickly?

The secret lies in their user-centric approach.

Empower, entertain, connect.

While other messaging apps were chasing numbers, LINE was chasing smiles. When expanding into new territory, LINE didn’t just ‘copy-paste’ their services but built unique experiences for their local market. They connected users to their neighborhood restaurants, bullet train schedules, and more. LINE made each user feel like the app was tailor-made, just for them. It was like a digital chameleon, blending seamlessly in with the cultural landscape of each new market. It had entered multiple aspects of daily life, from casual chats to gaming, and even access to a smart assistant like Clona. Besides being a messaging app, LINE became a hub for connections and growth, offering easy payment options and services aimed at both elevating businesses and personal experiences. 

Time to scale up.

On LINE’s 8th birthday, it was clear they were on the right path. Having outgrown the size of a start-up, the company entered its scale-up phase. However, they were struggling to expand into the global market and their numbers fell in the red. At this point, the international corporate SoftBank stepped in to get the company back on track, merging LINE with Yahoo Japan. LINE’s chief executive, Takeshi Idezawa, stated that the merger would enable the companies to stand tall against the tech giants from overseas. Now the question was: what would be the next step beyond the evolution from messaging app to Super App?

“‘Go Brave. No Fear. No Regrets.”

-LINE.

From Super App to Ecosystem.

As LINE gradually moves into its ecosystem phase in 2019, its mission is clear: closing the gap between customers and the companies that use LINE. They aim to create digital connections by supporting relationships between people, seamlessly integrating information, and delivering services. In the realm of "Life on LINE”, LINE's business model is a dynamic element, constantly being evaluated to keep it aligned with their vision of becoming the users' life infrastructure. This shift is ongoing until today. 

Currently, LINE offers an impressive array of 64 services, ranging from LINE Chat to Pay and Insurance. Their portfolio spans diverse sectors, including entertainment, fintech, portal & search, and beyond. LINE operates on the strategic principle: adapt or innovate. Some of LINE’s businesses thrive, while others, like LINE TV, fade away due to rising licensing costs and intense competition from other platforms. 


Go Brave.

In the face of an ever-shifting digital landscape, LINE embraces the ethos of "Go Brave. No Fear. No Regrets." This fearlessness translates into a continuous search for new business avenues, to make sure that LINE not only stays at the forefront but remains a pioneer in digital change. It's a journey from "proof of concept to proof of business" which illustrates LINE's commitment to thriving in a landscape that is as dynamic as its users.

Let's have a look at how all this adds up on the business model canvas:

“We focus on providing a user experience that is uniquely LINE, and we are constantly innovating to achieve this.”

-Takeshi Idezawa, CEO of LINE

Onwards and upwards.

Using one app to make a reservation at a restaurant, order a taxi that will take you there, and meanwhile chat with family and friends is already a reality. So, if the future is now, what is next? LINE is expanding its ecosystem. It is doubling down on its customer focus by introducing new services and elevating existing ones. In a nod to the ever-evolving language of digital expression, LINE has revolutionized its sticker marketplace by embracing the world of NFTs through its LINE NEXT business. This venture not only showcases LINE as an aggregator but also highlights its collaborative powers, being able to work effortlessly with multiple partners in shaping the future of digital collectibles.

Innovation doesn't stop there. LINE's user-driven approach continues with the introduction of LINE OpenChat, an AI-based message summary service, in collaboration with OpenAI. It is a testament to the company's endless pursuit of enhancing communication and service quality, which the company rolled out to 20,000 of its employees.

Looking ahead, it's clear that LINE’s future consists of a tapestry of user-centric technologies and collaborations, where every innovation is a brushstroke, adding to the portrait of LINE's next chapter.


Three things we can learn from LINE.

1. [Why] Long-term commitment: Becoming an ecosystem doesn’t happen unless you have a bold, clear, and shared vision or mission. Even with a compelling vision, it takes years to build it, one business at a time.

2.[What] Localization: Ecosystem ≠ expand more of the same. LINE’s localization strategies allow the company to shape a different ecosystem around the life or users of each unique region.

3. [How] Experiment: Try out new things, technologies, and tactics to engage users and find out, relying on data, where value lies next.

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