Japanese Messaging App Line on iPhone screen

Japanese App Line Brings In $270 Million Per Year Selling Stickers

First came emoticons. Then came emojis. Now, it’s all about stickers.

Nope, not the colorful adhesive ones you played with as a child. These are akin to the large, cartoonish characters you may have received on Facebook Messenger at some point. You would think there’s not much to stickers, but one Japanese company is making a killing off of them.

Japanese messaging app Line has reported earnings of over $20 million a month from the sale of stickers, reports TechCrunch. They are usually sold in sets of 12 to 18 and go for a couple of dollars per set.

While Line is quite popular in Japan, almost half of the Japanese app’s users come from outside the country in places like Thailand, Taiwan, and Indonesia. According to the New York Times, the app hosts over 200 million users. Line has experienced steady growth over the last few quarters, and it has branched out into the ride-sharing market. The Japanese company, which also offers phone and video calls, makes most of its money through traditional advertising, its popular stickers, and video games.

Mobile Deivices Users In Tokyo
Japanese using their smartphones. [Photo by Atsushi Tomura/Getty Images]

Despite its success in parts of Asia, the Japanese company faces stiff competition in a saturated mobile messaging market. There are a number of messaging apps that have a firm hold over many key areas, making it difficult for companies like Line to infiltrate those markets.

Nevertheless, Line remains optimistic of its chances and has its sights set on going global. It has an initial public offering planned for this summer in July, with a dual listing in Tokyo and New York. The Wall Street Journal reports the Japanese messaging app’s valuation at $5 billion, and the company is expected to raise $2 billion to $3 billion dollars. The lead managers for Line’s IPO include Nomura Securities and Morgan Stanley.

Back in 2014, the company first attempted an IPO. At that point, the Japanese company was valued at $10 billion, but Line backed out only to return to the process two years later at half of its 2014 valuation.

One obvious factor for the drop in value is the market’s recognition of the competition posed by giants like Facebook Messenger. Not only does Line have to compete with the numerous messaging services throughout Asia, it also has to go up against the social media juggernaut. According to Forbes, roughly 91 percent of online users between the ages of 16 and 24, a key demographic, have a Facebook account, Facebook Messenger, WhatsApp, or Instagram – the last two of which are owned by Facebook. Research shows that already staggering number approaches 100 percent when analyzing messaging app usage in emerging markets.

Cambodia Facebook user uses phone to logon
Facebook continues to dominate marketshare. [Photo by Omar Havana/Getty Images]

What’s necessary for the Line app, according to Forbes, is reaching that critical mass of users needed to prompt other users to hop on. As more and more people use a messaging app, others become more inclined – and more incentivized – to sign up in order to contact friends and family who are already on the platform. This means that although the Japanese messenger may have found success in entertainment and lifestyle services like ride-sharing, it will need to find a way to lure in more users.

Line’s $20 million-dollar-a-month stickers have proved to be a quirky source of income. The Japanese app effectively spurred the popularity of stickers throughout the tech world. Users on a variety of social media apps outside of Line have access to stickers in addition to the traditional emojis. Additionally, the company has managed to leverage its eccentric sticker characters into merchandising and licensing deals, turning the fun graphic communication tool into a popular brand. But all accounts indicate the Japanese app Line is going to need to find a strategy that involves something a little stronger than stickers if they want to achieve their desired global status.

[Photo credit GettyImages/Atsushi Tomura]

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