The coming fight will not be nearly as cute.
Most articles describe Line as a mobile messaging company. That descriptor might no longer be valid. The company has made a recent habit of sticking its nose into seemingly irrelevant industries. To wit, Line unveiled a host of new ecommerce offerings for Line Mall in August, and revealed a coming entrance to the financial services industry earlier this week.
All that was merely a prelude to the series of stunning announcements the company made at Line Conference Tokyo 2014 yesterday. In the space of three hours, Japan-based Line Corp showed off Line Maps, Line Pay, Line Taxi, food delivery service Line Wow, Line Business Direct, Line Book Distribution, and Line Music. You can read our summary of the proceedings, here, here, here, and here.
In that same stretch of time, Line also made new enemies. The dramatic expansion of Line’s business scope might have set investors’ hearts a flutter, but it also caused some of the world’s biggest tech companies to start sharpening their knives.
Google Maps
Line Maps, an indoor navigation app, takes Google’s nascent indoor maps and ups the ante. Line’s version allows users to get step-by-step, GPS-guided instructions around buildings. The service clearly has global ambitions since it will be launched in Japanese, English, Simplified Chinese, Traditional Chinese, and Korean.
Google Maps is one of the cornerstones of Google’s non-search empire and Line is attacking one of its few weak spots. Google Maps has seemed unassailable for years and spectacular failures by competitors like Apple have deterred most reasonable people from entering the mobile navigation space. Line apparently did not get the memo and is ready to tussle with the search giant.
Apple Pay
Speaking of Apple, Line Pay is going to be a direct competitor to Apple’s own new recently-announced payment service, Apple Pay. The big difference is that Apple Pay is designed around NFC technology, meaning participating stores will need a piece of external hardware on which users will scan their phone.
Apple Pay will also be available online, so your next Uber ride can be handled via Cupertino. Line Pay, however, emphasizes its digital seamlessness. It will be usable for online purchases, as well as those in the real world, without needing any external devices to operate. That reduces a barrier to entry for brick and mortar stores that Apple still has to deal with.
Uber
On the heels of showing off its new payment service, Line made arguably its most audacious announcement – Line Taxi. Operating in essentially the same fashion as Uber – use GPS to hail a taxi to your exact location, pay without using cash or card – Line Taxi is serious about stopping Uber’s growth in Tokyo.
Employing the fleet of Nihon Kotsu, a giant Japanese taxi provider, Line is ready to hit the ground running in Tokyo. The service is also expected to travel overseas where it might be met with open arms by the taxi operators fighting Uber’s implacable expansion tooth-and-nail.
Old-school taxi operators have been completely outclassed by Uber on the technical level. Line Taxi offers them a desperately needed lifeline. It might not be enough, however. Uber is no stranger to a fight and is prepared to do anything to win. This also bring Line Corp head-to-head with Rocket Internet’s EasyTaxi.
Amazon
Line Music, Book Distribution, and Wow turn Line Mall into an Amazon clone. Just like the American ecommerce company, users could sign into Line and then never need to sign out for their purchasing needs. The only cog missing is a copy of Amazon Prime’s film and television titles.
Amazon’s brand recognition and deep integration into ecommerce systems around the world will pose a steep challenge to Line’s collection of services. Line also has the disadvantage of not closely controlling all of these new apps.
Wow is dependent on a Korean logistics firms. A key partner of Line Music is Sony which has not been known for successful product rollouts recently. Even with Book Distribution, the joint venture is controlled by Line but by a narrow margin – four of the seven board seats will have Line employees.
China’s mobile messaging app of choice has 438 million monthly active users. It has a similarly broad array of web services, including ecommerce and a mobile wallet.
Like Line (which has only 170 million active users worldwide), WeChat has been trying to become the top global app. As far back as August last year, it had over 100 million registered users outside of China.
Line has only just begun its transformation into global conglomerate. WeChat has been doing it for the past year, meaning Line has to hope that first mover’s advantage is just a scary bedtime story told to MBA students.
Let the battle begin
Whether intentional or not, Line has entered battle on multiple fronts, in terms of both geography and industry. Its deep coffers are going to be stretched as it sinks resources into accelerating growth in all these new businesses. This means the Line of ever-increasing profit margins might disappear for a while. If that is the case, Line’s indefinite delay of its own IPO might be the master stroke that makes this new enterprise possible.
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