A messaging app and an entertainment content provider from Japan are setting sails to expand to the Middle East.
The first one is Line Corp, provider of the chat application Line which is market leader in Japan, Thailand and Taiwan and is growing in Indonesia, India and parts of Europe and has more than 400mn registered users worldwide.
“We aim to become Asia’s number one chat app in 2016,” Line Corp CEO Takeshi Idezawa said, adding that his company’s expansion focus lies on Southeast Asia and the Middle East and North Africa (Mena). Especially in Mena he sees grows potential as clear trends in the chat app market had “yet to be set.”
While in the wealthier countries in the Middle East, namely in the Gulf Cooperation Countries (GCC), messaging apps are already quite well established, there is potential in emerging countries in the region where smartphones are just becoming popular. To that end, Line wants to offer a simplified version of its app that also works under poor network conditions and plans to boost recognition of its brand through television and online advertising.
In most GCC countries Line will have to compete with chat apps such as WhatsApp, WeChat and Facebook Messenger. For example, in Qatar, WhatsApp is the leading chat app in absolute user numbers for locals and expats combined, replicating the fact that the Facebook-owned brand is the global market leader in this industry with around 900mn users.
Snapchat, in turn, is popular with Qataris and the youth. WeChat, a brand owned by China’s Internet giant Tencent Holdings, is also making inroads into the Middle East where it is particularly strong in the UAE. In its expansion, WeChat has the advantage that it is partnering with Chinese low-cost smartphone brands such as Xaiomi which could be a challenge for Line in emerging Middle East markets.
To create awareness, Line has kicked off sticker design competitions in Saudi Arabia, UAE, Qatar, Bahrain, Kuwait, Lebanon, Algeria, Egypt, Jordan, Morocco and Tunisia, whereby it asks interested users to submit self-designed stickers that portray Arabic culture “in a creative and innovative way” and can be used for everyday conversations on the app and be applicable to Arabic dialogues and social situations.
The other Japanese company that wants to expand in the Middle East is Tokyo-listed entertainment content provider Kadokawa Corp, market leader in the segment in Japan and known for books, movies, comics, anime, manga, online videos, computer games, other digital and multi-media content and children’s book. The company, through Malaysia-based media company Art Square Group in which it acquired an 80%-stake and then rebranded Kadokawa Gempak Starz, will expand in Southeast Asia and to various Middle East markets where it seeks to tap the growing creative content industry.
Kadokawa aims to strengthen original content creation in Arabic language, acknowledging the growth potential in the region to which Malaysia has traditionally good business relations and for which Kuala Lumpur has been named Kadokawa’s “creative content export hub.”
Kadokawa’s foray into the Middle East market can be particularly interesting for telecom companies as more and more consumers embrace smartphones, tablet computers and other mobile devices and expecting more and better digital content. And this is not a small business: The global entertainment content industry is valued to reach $10.1tn over the next four years, according to the PwC Global Entertainment and Media Outlook 2015-2019.