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Why Japan’s youth are turned off by Facebook

On the face of it Facebook have a lot to be smug about when looking at their Japanese footprint.

With the original Japanese social network Mixi in rapid decline, Facebook now boasts 21 million local active monthly users. This has grown rapidly from around four million a couple of years ago, with 86% of users on mobile compared to the global average of 71%. And what’s more Facebook announced in August that it was going to double its Japanese team to boost the local advertising business.

All this in a society that many said would never accept a service that does not allow its users to remain anonymous just shows how attitudes can change.

However, explore the digital landscape a little closer there are some worrying signs for Facebook. Some of which are the same concerns that are levelled everywhere, namely outside of traditional advertising they have still haven’t cracked monitising mobile.

But others are culturally specific to Asia, and may just hold the key to the future of the platform in the region and further afield.

Primary among these is the explosive growth of the mobile chat app LINE. Inspired by the wake of the 2011 Tohoku earthquake, LINE has broken all records on the way to this week’s announcement of 300 million users globally, of whom 43 million are in Japan. And it has ambitiously stated its intention to top 500 million global users before the end of 2014.

But what makes LINE stand out among the handful of other chat apps currently boasting these kinds of user numbers, such as WhatsApp, Viber, and WeChat is its phenomenal ability to monetize its user base.

Unlike Facebook, which is now more or less limited to advertising, LINE sells digital goods (such as the stamps its users converse with in chat threads), and game credits. And it’s working, in the second quarter of 2013 LINE generated $100m in revenue, a feat not achieved by Facebook until Q4 2011 nearly eight years after launch,

For Japan’s users, who were raised on an image-rich diet of manga characters and anime, the stamps are the easiest and most charming way to express their everyday feelings. Each stamp has been designed to map to a commonly shared feeling like “I’m exhausted”, or “having fun!” using 4 original LINE characters as the grammar of its visual language.

LINE users begin with the default set of stamps, but have the opportunity to make purchases for $1.70 a pop. Alternatively they can download free stamps from the sponsored gallery, neatly paid for by brands wishing to promote their own characters.

Many of these stamps feature classic and universally familiar manga characters, ideal for sharing amongst friends with the same memories and context. Whilst at first sight seeming quite basic, LINE’s universe of stamps actually offers far more nuanced communications than simple status updates, adding a subtle extra layer of meaning and personality.

In contrast with Facebook’s two dimensional likes or linear status updates, LINE offers a much more effective way of communicating visually, which is proving particularly effective with its younger target demographic. And this is all on top of the fact (at this stage) you are unlikely to find your parents or boss hanging out in LINE, adding another layer of authenticity to the platform.

At present, LINE’s growth has so far largely come in East Asia where the same “high context, low content” culture predominates, but what is perhaps surprising is how popular it is proving elsewhere.

It has jumped to 10 million users in India in the space of a couple of months having hired a top Bollywood actress as its ambassador, passing 15m users in Spain and is now targeting South America.

Some of us wondered whether Japan, so long a hardware juggernaut and console gaming industry heavy hitter, would ever break its duck in the web services arena. In hindsight it makes total sense that it would take a mobile app with a uniquely visual UX that can be personalized to reflect the visual culture of its users, wherever they are, to have universal appeal.

As smart phone adoption continues to grow exponentially around the world it is easy to imagine how LINE can continue to prosper. A mobile first native application that plays directly to the strengths of handheld devices- rather than reengineered from desktop starts to make other apps look almost antique.

Add the universal appeal of emotive images, monetized through digital goods and it’s not too far fetched to bet on LINE continuing to have Facebook’s sushi lunch from Tokyo to the ends of the earth.

James Hollow is president of Profero Japan, you can find him here.

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