Line is getting dangerously dependent on users in its 4 top countries

By Steven Millward for TechinAsia

Messaging app Line, which has been struggling to grow for years, now has 218.4 million monthly active users (MAUs), the company said today. That’s up from 205 million 12 months before, and from 215 million at the end of 2015.

Rival app WhatsApp reached 1 billion MAUs in February, while Facebook’s other chat app, Messenger, crossed 800 million at the start of the year.

Another problem is that Line is more and more dependent on its four disparate main markets – Japan, Taiwan, Thailand, and Indonesia. Those accounted for 69.4 percent of total MAUs in this latest figure for Q1 2016, up from 65 percent in Q3 2015 and 60 percent 12 months ago. It’s growth, but it’s also Balkanization.

Generally only bad things happen when a worldwide web service finds it’s only popular in a Trump-sized handful of areas – just ask Friendster or Path.

“Line is focusing its marketing expenditures on these four countries and from among these, Indonesia showed the most notable user growth during the quarter. Line also continues to see user growth in the Middle East,” said the company today.

Bots could save the day

The stagnant user base prompted Japan-based Line Corp to reveal a bunch of new stuff last month. At the Line Conference Tokyo 2016, top executives showed off stores within Line for businesses of all sizes, a mobile internet service, and a prepaid bank card that ties to Line Pay (which is a bit like Apple Pay). All of those are only for Japan.

Line is also leading the way in terms of chat bots, and is now testing a way for companies to put bots into their Line brand accounts in order to do things like search, recommendations, and automated customer support.

But it’s too early for Line to see any growth effects from all the new products.

A brand account in Line using an automated chat bot. Image credit: Line Corp.

Line mostly makes money from ads, purchases in the games that are tied to Line, and from users buying emoji. The company also pulls in some money from spin-off apps like Line News, Line Live, Line Pay, and Line Music. These are mostly focused on Line’s top four countries.

All of that is growing faster than its network. Line Corp pulled in US$303 million in revenue in Q1 for all its Line-branded stuff, the company said this morning. That’s up 21 percent from the same period a year prior. The messaging app itself generated US$275 million of the total for the first three months of the year, up 22 percent from 12 months ago.

First appeared at TechinAsia.com