LINE's Token Economy Vision
LINE, a Naver subsidiary in Japan, has recently announced aggressive new business strategies in fields such as content, commerce, and fintech. This announcement, according to an analyst with NH Investment & Securities, deserves attention given that these business areas are currently at the center of major global Internet players’ interest.
LINE rolled out its vision and growth strategies at LINE Conference 2018 held in Tokyo on June 28. The company announced an intention to redesign its entertainment, media, business, commerce, AI, and financial sectors, and introduce “LINE Token Economy,” a concept based on blockchain technology.
LINE plans to reward users with its own currency for reviewing services. This concept of using review-based incentives, the company says, will allow its services to grow and expand even further.
The NH Investment & Securities analyst says that among the many initiatives announced by the company, the most attention was attracted by its planned business reinforcement in the entertainment, payment, and fintech fields. For these areas, the company set out the following goals:
1) Entertainment: Consolidate LINE Music’s leading market position; secure a competitive edge for LINE LIVE as a streaming business; target overseas cartoon markets through LINE Manga; expand line-ups for LINE Game; and launch LINE Quick Game.
2) Payment: Aggressively expand LINE Pay’s affiliated stores (by exempting affiliates from initial setup costs and commissions) and offer user incentives (3% to 5% of purchase price earned in points); and extend LINE Pay acceptance to various online shopping malls.
3) Fintech: Expand operations through partnerships; establish both a securities and an insurance firm; introduce services utilizing blockchain technology; and establish a cryptocurrency exchange named “BITBOX.”
Recently, Naver and LINE’s share prices have been sluggish due to the companies’ heavy investment in new businesses. Citing the increase in marketing expenses that will undoubtedly accompany the firms’ aggressive expansion plans, the NH Investment & Securities has lowered its expectations towards their earnings performances in the near term.
However, the brokerage expects the share prices of NAVER and LINE to gradually rise when new business activities begin yielding tangible results.