April 20, 2024

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[THE INVESTOR] Six years ago, Line Corp. successfully edged out western rivals like Facebook and WeChat to rise as the dominant mobile messaging service chosen by major Asian markets including Japan, Thailand, Taiwan and Indonesia.

And now, the Tokyo-based mobile messaging app operator is on track to achieve its broader vision of expanding into a full-fledged consumer platform by leveraging its strengths in localization and data-driven artificial intelligence technology.

Line, touted as a rare case of a globalized business brought to success by South Korea’s internet technology giant Naver, currently has more than 200 million monthly active users worldwide, concentrated mostly in its four core countries in Asia.

IT industry observers and investors have eyed Line’s stagnant growth with concern but are aware that the Japan based messenger app is focusing its limited resources on its core markets in Asia.

The selective approach has helped the company become an innovation-savvy money maker that pioneered the likes of mobile stickers that are now mimicked by other industry players.

In a sector where the hype of explosive MAU growth is slowly being replaced by tough questions on monetization, the company -- at least for now -- seems to have found the right strategy.

Line CTO Park Eui-vin (Line Corp.)

Having hit the growth ceiling as a mobile messenger, Line is working to grow into a one-stop-shop platform with wider roles -- a shift that will be underpinned by AI and big data, according to Line’s Chief Technology Officer and Senior Vice President Park Eui-vin.

“We want to expand our platform to become a ‘smart portal’ for not just mobile messaging but things like simplified payment and content access, with aims to better link users to their daily endeavors,” Park said in an interview with The Korea Herald at Line’s Seoul office.

“The key will be to join hands with more third-party companies to make existing services from Line as well as others more convenient as possible for users, for which AI technology and data will play an integral role,” said Park, who has been leading Line’s development team as CTO from April 2014.

As part of the push, Line unveiled its artificially intelligent voice assistant platform Clova in March this year. Similar to Amazon’s Alexa and Google’ Assistant, Line’s AI assistant platform combines speech recognition and natural language processing abilities with data processing capabilities to automatically respond to users’ inquiries and carry out requested tasks.

Clova can work within apps and be integrated into hardware built by Line as well as other companies. Its applications are broad and open for experimentation, whether it is building an intelligent chatbot that can converse directly with customers with inquiries or developing connected devices for a smart home.

Line itself has introduced a Clova-based mobile voice assistant app that works like Apple’s Siri and Samsung’s Bixby. It is also set to release a Clova-powered standalone smart speaker called Wave similar to Amazon Echo and Google Home, in Japan and Korea in the coming months.

With the move, Line is jumping -- somewhat belatedly -- into the highly competitive global race to dominate the AI platform business. While there are no clear winners yet, the Asian messaging firm is up for a tough fight against Western tech giants already ahead in terms of technology development and market entry.

The Line CTO says it will be an “uphill battle” but will be “worth every shot.” While admitting there are many technological gaps that have to be filled, Park believes Line has a critical resource that Western rivals lack -- quality user data involving Asian populations.

Over the years, Line as well as its parent company Naver have amassed a vast pool of data involving Asian users, whose habits, needs and interests often differ from those of their Western counterparts. As an AI algorithm is as good as the data it is trained on, Line believes it has a competitive edge over foreign rivals.

“We build and fine-tune our technologies using the social graphs based on our real time user data. This makes us a more attractive (AI platform) partner to work with (in our stronghold markets in Asia),” said Park.

Currently, Line’s presence in its four core markets goes beyond mobile chatting to span everything from payment, e-commerce and character franchising to games and webtoons. This makes Line an attractive platform to which new smart services can be synced. 

Experts have pointed out that the company‘s accumulated knowledge on local languages and cultural norms are expected to give it an edge over other chat apps in the AI battle in the Asia region, especially Western ones, that use more of a cookie cutter approach and offer most of the times only basic chat functions.

According to the CTO, such reasons are precisely why Japan’s convenience store chain FamilyMart recently chose to work with Line to develop collaborative products and technologies using Line’s AI platform Clova as well as Line messenger.

“Why did FamilyMart decide to work with Line and not Amazon? FamilyMart chose us because it needed to target Line users more than Amazon users. It needed Line’s application programming interface more than it needed Amazon’s API,” she said.

In the past, localization tailored to individual markets allowed Line to gain an upper hand in the mobile messenger business in Asia. And the firm is hoping that sticking to the same strategy will work in its process to become a bigger consumer platform.

“We call it ‘culturalization.’ If you look at Apple or Google, they pursue a ‘one product’ strategy for markets worldwide. This approach assumes that every user worldwide, including Asian users, will want that same function,” Park said.

“However, users in different countries all display differing characteristics. Considering this, Line focuses on tailor-fitting its products and services in line with market-specific needs. It’s a process that continues to remain a challenge, yet one that pays off.”

By Sohn Ji-young/The Korea Herald (jys@heraldcorp.com)