Article

Martin Hiesboeck
Martin Hiesboeck 6 April 2016

The Chat App Revolution: Everything on the LINE

While the US and Europe are still working with simple chat applications that offer only basic functionality, East Asia has embraced a different paradigm: Chat platforms with offer hundreds of functions from ticketing to payment systems.

3 bold predictions for a changing digital landscape

When I talk to American and European digital marketers, they still put SEO, SMM, a solid Twitter and Facebook strategy, Adwords and perhaps Snapchat at the top of their list of things to do.

I think that’s about to change. I predict that in the next ten years, email and websites will become irrelevant, Twitter will be merged into another chat app, and Facebook will increasingly focus on Messenger. And that's just the start.

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The reason is the rise of integrated chat platforms, which are a far cry from the WhatsApp of yesterday.

The two most prominent candidates are WeChat (in China) and LINE (Japanese subsidiary of Korean Naver). WeChat has the disadvantage of being Chinese – whose Internet companies aren’t much trusted in the West.

WeChat definitely chose the wrong name when it was founded, because it has become so much more than a chat app. Things you can do on WeChat include pay bills, transfer money, split bills in restaurants, call a cab, read news and websites, order food and drinks or any delivery service, book a restaurant table or theater seat, scan product barcodes, send bitcoin, share location, access your brokerage account, donate to charities, configure your dream car, try on clothes (virtually), and, well, finally, chat with your friends. It has hundreds of millions of users in China. Check out this neat summary of WeChat.

LINE is moving in the same the direction. It started out as a chat app with cute icons, but the LINE characters have become so popular that they now have their own merchandize and comic book series. LINE now has an estimated 250 million users in Asia. It is offering official accounts (businesses) which can push messages to their followers based on geolocation. From inside the app, you can access novels and comic books, thousands of LINE games, a payment system, and a LINE timeline feature which is competing directly with Facebook.

I am typing this standing in front of the 7-ELEVEN, having just confirmed my flight reservation, paid my electricity bill, made a reservation at my dentist, received a message from the 7-ELEVEN that a second coffee will be 10% off, all the while chatting with my colleague and browsing a website. All on LINE. Now I’m using LINE Pay to pay for my train ticket tomorrow. Since Taipei has city-wide free Wi-Fi, none of this online time is costing me anything. As I walk away from the convenience store, I receive a message from my favorite pizza place: “Come in now and get free chicken wings with your pizza!” I’ve already eaten, so as I get on the bus (also free Wi-Fi here) I start playing a LINE game. I haven’t left the LINE environment once. No other app necessary.

You see where this is going? The total integration of all online activities into a single platform. Here are my 3 bold predictions:

  1. In the next 5-10 years, websites and email will become irrelevant as interaction with individuals and companies moves onto ever more diversified chat platforms.
  2. The payment systems offered by these platforms will become dominant currencies and replace many banking processes.
  3. Whoever wins the race will be the world’s most valuable company by 2025.

These are bold predictions but I don’t think they are far-fetched. There are now more LINE games being developed than separate mobile games. Taiwan and Japan have seen the emergence of LINE authors, producing short stories and novels in instalments which are being pushed to you as a chat message. You can pay for them with LINE points. (Watch out Amazon Kindle!). LINE allegedly wants to include auction platforms in the near future. Its virtual currency is gaining ground. Stores will soon allow you to pay in LINE points. EBay and PayPal are on the line here, to name just two.

Am I sure that LINE will win the race? Not at all. I don’t think it will be WeChat, because it allegedly includes software that allows the Chinese government to monitor your phone. But a real threat may come when Facebook wakes up to the fact that WhatsApp and Messenger are being abandoned in droves as people move to more integrated platforms. They may yet challenge the dominance of these upstarts (LINE is only four years old.) But whoever comes out on top, it will be a powerful, integrated platform. Digital marketers will have to adapt quickly.

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