Mobile SNS Battle
Korean, Chinese, and Japanese companies are engaged in heated competition in the mobile social networking service (SNS) market. Alibaba and Rakuten have recently entered the market, which has been dominated by Korean and Chinese mobile messenger service providers like Line, Kakao Talk, and WeChat for a while, to change the dynamics of the competition.
According to industry sources, Alibaba, which recently started a mobile game platform business, is going to make a large-scale investment in Korean game studios. The Japanese company is planning to beef up its mobile contents business through the acquisition of Viber, too.
Alibaba is regarded as an archrival of Tencent, which leads the Chinese mobile Internet market with the WeChat and WeChat games. Alibaba is currently providing the payment system of AliPay with 900 million subscribers, the open market service of Taobao with over 700 million members, and the messenger application dubbed Laiwang. The company is planning to link its new game platform application with Taobao and Laiwang. In particular, it is going to provide game developers with 70% of the sales and donate 10% of the sales to the development of local rural areas, a move that has been extremely well received by industry participants.
Softbank of Japan is the largest shareholder of Alibaba, with 35% shares. Softbank has recently taken over Supercell, the maker of the smash hit game Clash of Clans. The follow-up is expected to be distributed using the Alibaba platform.
In the meantime, Tencent is moving swiftly to counter Alibaba’s offensive, too. Tencent is said to invest approximately 200 billion won (US$186.6 million) in CJ Games of CJ E&M through a third-party allocation. The Chinese company is expected to smoothly absorb the popular games of CJ E&M, such as Marble for All and Monster Taming, in the case that it becomes a major shareholder of CJ Games. Tencent already has 14% of Kakao in Korea as well.
Although the race between Alibaba and Tencent is likely to be an opportunity for Korean game studios, the acquisition of Viber by Rakuten has strained Korean mobile SNS service providers like Naver and Kakao. Viber started as a free Internet call provider and has expanded its scope of business to cover mobile messenger services. The number of its subscribers is close to 300 million, as of now, across the world. In particular, the number is increasing fast in Southeast Asia, where Naver’s Line and Kakao Talk are in wide use.
At present, Naver has 50 million Line users in Japan, 22 million in Thailand, and 20 million in Indonesia, but is falling behind Viber in Vietnam. Kakao Talk has more than 10 million subscribers in Indonesia but has been outperformed by Viber and WeChat in the other Southeast Asian countries.