26 Feb Head of the Line
Head of the Line
26 February 2019
Thai people are connected to the internet for over 9 hours a day, and half of them go online using their cell phones. The most visited sites are Facebook, YouTube and Line, a South Korean company based in Tokyo and subsidiary of internet giant Naver.
With 44 million users in Thailand, Line is undoubtedly one of the most popular applications in the land of smiles – its second-biggest market. From a simple chat service launched in Japan in 2011 to compensate for the communication network blackout during the Fukushima disaster, Line has continued to dominate the Asian market and especially in Thailand.
It is a craze which has often been attributed to its cute stickers which are used to express a wide range of emotions or actions. A success that has allowed to build a first user base. Today, beyond its instant messaging application, Line has evolved into a service platform: a news portal, delivery services, taxi booking, online payments, television and games, all with resolutely local anchorage and different strategies depending on the country.
Born in France to Thai parents, grandson of former Prime Minister Pridi Banomyong, Ariya “Bi” Banomyong studied in Paris and London before returning to Thailand in 2001 for the launch of Orange Thailand. He then worked as Commercial Director at True Corporation and then Regional Director of Google Thailand. All of this led up to him taking the helm at Line Corp in Thailand in 2015, where he began growing the messaging service into a multipurpose platform.
You often say that understanding Thai culture is the key to success in this market. Having grown up in France, have you ever found it difficult to figure out this culture?
I still remember the day I had my first culture shock. I was born in France to Thai parents and, before going back to Thailand in 2001, I had never studied or worked here. So I was French. In the afternoon of May 17, I started working for Orange Thailand and we were in a launch meeting. At one point, I asked a direct question, “who chose this supplier?” without meaning anything negative by it. The room went quiet and I realized that I had just made a real blunder.
That was the day I understood that I would have to work differently in Thailand. I think it’s common to all expats here. It took me what turned out to be a very difficult year to really manage to adapt.
How do you explain Line’s success in Asia and the fact that the application is almost unknown in Europe? Is it only down to its stickers?
We must acknowledge what the stickers have done for Line and understand that they correspond to the culture; the way Asians communicate. In Thailand, people do not like to express themselves directly. For example, if I am angry with someone in France, we’ll end up yelling at each other. However, if I want to say that I’m not happy in Thailand, I’ll send a Brown angry sticker. This way of expressing yourself is more about implying what you mean rather than actually saying it. The same goes for seduction: Thai people do not say “I love you” but send heart stickers as a way of expressing emotions without vocalizing them. And it’s not just young people or teens who use stickers, people of all ages do – even politicians!
People use applications very differently in Asia. WhatsApp users and Line users don’t behave in the same way at all. WhatsApp has replaced text messages – the only thing it is used for is sending messages.
On Line, people don’t just want stickers, they order food, call a taxi, etc.
The same is true of social networks. Thais will have thousands of friends whereas French people are more concerned about their privacy. Thai culture is a society of networking and community and this is evident when using chat services and social networks. Our interest is therefore developing multiple services while being aware that what works in Thailand will not necessarily work elsewhere.
What is your strategy for developing these different services?
We must constantly be evolving and innovating or else we’re giving our competitors the chance to catch up and eventually overtake us. Over time, our simple chat application has been transformed into a real platform where you can find content with Line TV and Line News, where you can order food, call a taxi, make payments, shop online, etc.
To stay in touch with what’s going on, it is very important to know how often people use services, which is why our strategy focuses on services that are useful to everyday life. It really is the underlying theme for developing new tools.
Today, selling stickers, advertising and games are our main sources of income. For other services, including Line Man or Line Pay, we are still in the investment phase.
In Thailand, we have built our business model around our huge customer base in what we can call an economy of scale: the more users I have, the less money I need proportionally.
The Line Man service is only available in Thailand, how much latitude do you have on a local level?
As it happens, how we operate is very decentralized. Understanding the local culture is very important for us to develop localized products. Line Man is a very good example of a service incubated in Thailand that is only available here. We will see how to replicate it in other countries based on the outcome.
The independence we have from our parent company is seen in two aspects: on the one hand we develop very local services such as Line TV and Line Man. On the other, we invest a lot in the Thai market.
Last year, we bought a Thai start-up, we just took over a second and are investing in a third.
The second domain we are investing a lot in is content for Line TV and Line News by purchasing content or production. We do not create content – it’s not what we do – but we work with partners who make videos for us, a bit like Netfiix, except that we focus on Thai content.
What is so specific about the Thai market?
Line represents a third of the time users spend on their cell phones! 90% of consumption is in Thai whether it be for videos or news. Netflix, HBO or series like Games of Thrones only make up a tiny part. As it happens, the market is still dominated by television content even if it is now viewed on cell phones. There is a certain irony, but it still shows that there is a real opportunity for TV in Thailand to make a comeback.
Something else specific to Thailand is prepaid. 90% of the cell phone market in Thailand is based on prepaid cards. Consumers will buy a refill when they have money, two thirds of the population is self-employed and many people are paid on a daily basis. Another important detail about Thailand is that there are only 9 million credit card users out of a population of 68 million! Knowing this helps us understand why payments are so fragmented.
Can Line Pay make up for this fragmentation?
In the United States or Europe, the banking system is very developed. Everyone uses credit cards, no one carries cash around and there are banks everywhere – even in smaller cities. In most Asian countries, waiting for banks to cover everything could mean hanging around for 10 years; there is no point in copying the system used in Western countries. With technology and the internet, we can skip a generation and bridge the gap.
In Asia, people do not have access to financial services or loans because people don’t get the information about them. Above all else, banks are businesses which revolve around calculating risks and data is needed to do so: pay slips, seniority within a company, expenses, etc. There is no data on self-employed people. Technology and cell phone payments will really work in Asia because problems with data will be solved even if the data is different: who your friends are, how many times you take taxis, etc. Data exists and will help develop another risk model to what banks are used to dealing with.
What kind of protection can we expect with this kind of data?
We only store data about our users’ behavior to understand how they use our features. We don’t go near their personal data. We do not keep anything stored in their messaging services and we are very clear about that. I think it’s an agreement between our users and us: our chat is very private, unlike social networks.
Among other services, where are you with regard to cryptocurrencies?
Cryptocurrency services that include a BitBox trading platform and Link currency have been developed in Singapore, but have not yet been launched in Thailand or Japan. In Japan, it’s totally forbidden so the situation is clear. The same cannot be said for Thailand – there are no real regulations. We talk a lot with regulators to understand how they think, see where there are holdups and what kind of direction we can take. The subject is quite sensitive. In parallel, we are looking a lot beyond what crypto is and how we can use Blockchain on our platform, but for now, we are still in the exploration phase…