* NHN Japan's app allows users to text, call for free
* App hits 50 million users faster than Facebook
* Developer aims for 100 million users by December
* Analysts question whether "cute" will translate
By Mari Saito
TOKYO, Aug 16 Born in the chaos after Japan's
2011 disasters, the smartphone application "Line" has attracted
50 million users faster than Facebook with a
made-in-Japan blend of cute and the promise of free
Now, the company behind the application is readying an
online media campaign to promote the app in China and the United
States to sustain its meteoric growth rate and hit the 100
million-user mark by December.
"In the smartphone business, you can't win unless you're
No.1 in the world in terms of membership," Akira Morikawa, the
president of NHN Japan, told Reuters.
The company, a unit of South Korea's NHN Corp
and which also runs the Naver search engine in Japan, created
the Line app after the massive earthquake, tsunami and nuclear
crisis that struck northeast Japan in March 2011 disrupted phone
lines across the country.
NHN Japan employees, forced to turn to the Internet to reach
each other, decided to develop Line, which launched in June
While it took Facebook more than three years to reach 58
million users from its launch in 2004 to 2007, Line reached 50
million users in just over a year.
The online campaign is set to begin in the second half and
will target U.S. and Chinese users via various websites,
although the company declined to elaborate. NHN Japan used
television commercials to promote the app in Japan, South Korea
and Taiwan, but said it has not decided whether to use the same
approach in the new markets.
Line allows users to text and call from their smartphones
using the existing data plan so users can communicate via the
Internet and not be charged for a cell call. It has topped Apple
Inc's App Store rankings for downloads in 24 countries
from Kuwait to Kazakhstan.
To distinguish itself from other communication apps, Line
offers its own games, a camera app, and a social platform
complete with a timeline and homepage, similar to Facebook.
SURVIVAL OF THE CUTEST?
Line is best known for its "stamps," elaborate emoticons,
like cartoon characters of a happy-go-lucky rabbit, that users
can send each other in a text message when words fail.
Exhaustion is conveyed by the image of a sleepwalking bunny for
Many stamps are free, but users can pay an extra $2 for
premium stamps for characters like Tweety Bird and Snoopy.
Japanese pop culture's fascination with the concept of cute,
or "kawaii," plays well in other Asian countries and some
characters like Hello Kitty have gained popularity in the United
States and Europe. Still, some analysts wonder if Line's
characters will travel.
"The characters and stamps are popular in Asia, but I am not
sure if it will translate in the United States," said Yuki
Nakayasu, a research analyst at Credit Suisse in Tokyo.
Line also faces tough competition in both China and the
United States from the likes of WeChat, run by Chinese internet
giant Tencent Holdings, and Silicon Valley's WhatsApp.
The application may also face governmment-imposed
restrictions in China. Facebook and Twitter, as well as
prominent websites like YouTube, are blocked in China.
"Line is cute and such an unconventional application that
it's probably going to be more successful in markets that are
culturally closer to Japan, said Serkan Toto, a Tokyo-based
"But WeChat is too dominant and the Chinese system of
government restriction will not let a social application from
Japan become a dominant player."
In Japan, Line poses a threat to established social gaming
heavyweights DeNA Co Ltd and Gree Inc, while
it has already surpassed Mixi Inc, a domestic social
networking platform that has lost ground to Facebook.
Some revenue comes from advertising. Line charges companies
like Coca-Cola and Japanese cup-noodle maker Nissin Foods
to sponsor stamps. Some recent Coke mascots involved an
From this April to mid-July, revenue from stamps sold to
individuals totaled 500 million yen ($6.4 million). That
excludes sponsorships, a figure the company does not disclose.
Line has yet to turn a profit, but Morikawa said its owners
are patient. The hope is that the service can become a marketing
tool for the rest of NHN Japan's divisions by tying users into
its search and gaming platforms.
"We're still in an investment phase," Morikawa said.