Rich messaging apps have become hugely popular social platforms in Asia, led by KakaoTalk in Korea and LINE in Japan/Southeast Asia. These apps allow users to text but also integrate other services like games, commerce, and content discovery through their contact networks. KakaoTalk has 65 million users in Korea sending 4 billion messages daily, while LINE has over 70 million users, more than half from outside Japan. Telecom and internet companies are responding by partnering with or developing their own rich messaging apps to engage users and drive revenue from new services.

1. Understanding
Rich Messaging Apps
@woosungahn

2. Rich messaging apps: new mobile social graphs
built upon the phone’s actual contact list
Free text/ call Uber emoticon App discovery

3. Korea:
KakaoTalk , #1 social app in Korea
65M users, 27M DAU(over 50% of Korean population) in 2.5 years
4B messages/day now, 97% usage/install ratio
Tencent invested $63M for 14% into Kakao
Yahoo Japan took 50% Stake in Kakao Japan
MM
Membership Growth Since Launch

4. Japan:
LINE, #1 social app in Japan and many SE Asia markets
70M users in 16 months, tracking to 100M by year end
Over half of its users coming from outside Japan now
Making $3.8M/mo by selling premium stickers
Partnered with Japanese #2 carrier, KDDI
Membership Growth Since Launch
Source: NHN Japan

5. Becoming content platform beyond texting:
Rich messaging apps allow your actual contacts to send
you push notifications for content (game, commerce…)
• Kakao’s Game platform has dominated the app store by contributing to
70% of both Top 10 Free and Grossing since its July 2012 launch
• Anipang for Kakao: played by 2/3 of Korea population, $10M/mo
• DragonFlight for Kakao: broke records of daily revenue, $1M+/day
Source: AppAnnie, MoneyToday

6. Becoming content platform beyond texting
Line already is #10 all grossing in the U.S. (#2
in Japan) by selling over 50 paid stickers by
Coca Cola, Sanrio, Disney, etc.
Initial game partners include Rovio, Konami, SquareEnix,
gloops/Nexon, etc.
Source: AppAnnie

7. Incumbents’ Response
Carriers:
SKT: #1 carrier in Korea, acquired TicToc, Kakao competitor, entering SE Asia
markets to be the 1st mover
KDDI: #2 carrier in Japan, partnered with Line
Consumer Internet:
Tencent: made their own rich messaging app, WeChat, recording 200M users
Softbank’s Yahoo Japan: established Kakao Japan (50/50 JV) with Kakao
Mobile Social Game Networks:
GREE: took strategic minority stake in eBuddy (IM app with 30M users)
DeNA: just debuted their own messaging app, Comm (#1 Top Free in Japan)

8. Global Alliance across Sectors
U.S. Japan Korea China
Softbank bought 70% of Sprint for $20B Tencent invested $63M for 14% into Kakao
Softbank’s Yahoo Japan and Kakao made 50/50 JV Kakao Japan

9. Key Takeaways
• Not just an Asian thing; Line is already #10 top all grossing in
the U.S.
• Further growth potential for younger generations (tablet/ iPod)
with no telephony service
• Carriers participating strategically not to lose text/voice biz
(being disrupted already)
• By far the best way to recommend apps
Source: AppAnnie