Line CEO bets on selfies and macho stamps to expand outside Asia

Japan’s most popular instant-messaging platform, a unit of Naver Corp., is customizing its software for markets across continents.

In Brazil, Line’s androgynous Moon character sports bulging muscles to appeal to local sensibilities, according to Chief Executive Officer Takeshi Idezawa. In North America, its B612 selfie app is targeting users without relying on the Line brand, Idezawa said.

“Localization is key because cultural trends, differences in handset functions, smartphone penetration and carrier plans really set markets apart,” Idezawa said in an interview in Tokyo on Thursday. “This is a bit contrary to West Coast tech company wisdom, but we plan to tailor our service to each country and cultural sphere.”

Idezawa, who took over as CEO on April 1, is looking to build on the company’s popularity in Asia to take on competitors like Facebook Inc.’s WhatsApp. More than half of Line’s 181 million monthly active users are concentrated in Japan, Thailand and Taiwan.

The number of countries where registered users exceed 10 million has climbed to 13 since the app launched in June 2011, according to the company. Japan dominates with 58 million subscribers, compared with 30 million in Indonesia and India and 25 million in the U.S.

Platform Leverage

“Unlike simple chatting applications like WhatsApp, Line offers a whole platform of services and has more chance to leverage localized content,” said Thomas Kwon, an analyst at Daiwa Securities Co. in Seoul. “Line may be more successful in gaining subscribers in emerging markets, where smartphone penetration is still low and advanced services are fewer.”

Kwon has a buy rating on Naver, the South Korean Internet search portal that owns Line.

The company makes money partly by selling icons, or stamps, customers can put into messages. Sales more than doubled in 2014 to 86.3 billion yen ($717 million), Line said in January.

The mobile-messaging app operator has added features such as games, comics, free voice and video calling, photo and video sharing. Line agreed in December to buy Microsoft Corp.’s MixRadio streaming service to speed up user growth.

“This is a business where the strong get stronger and you can’t have meaningful development without capturing top share,” Idezawa said. “Growing your user base is just not enough, you have to be number one in each country.”