Retail in Asia

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LINE starts to attract luxury brands in Japan

Line App Japan Asia Retail News - Retail in Asia

While Japanese social media consumption patterns are similar to those in the United States with significant popularity of Facebook, Twitter, and YouTube, one local platform dominates all of them: LINE.

Originally popularized as a phone replacement when telecommunications infrastructure was damaged by the Tōhoku earthquake in 2011, the mobile messaging app is used by 77% of all smartphone users in Japan—making LINE the top social media channel in the Japanese market by a wide margin, with a higher adoption rate by smartphone users than YouTube (55%), Facebook (41%), Twitter (30%), and Instagram (19%).

SEE ALSO: Luxury fashion brands start to sell on China’s WeChat messaging app

In spite of LINE’s popularity, brands have been resistant to launch official accounts on the app due to the high cost of setting one up. The official account allows a brand to launch its own collection of the immensely popular LINE stickers and have larger numbers of followers than a small business LINE@ account, but costs at least $25,000 a month with price increases for a higher fan base and greater frequency of messaging. International fashion brands have been especially reluctant to join, with an adoption rate of only 32% among Index brands in the Luxury Fashion category as of May 2017.

There are signs that the luxury industry is taking more interest in the platform in 2017, as several major fashion labels have flocked to the app this year. LVMH brands Louis Vuitton, Fendi, and Dior launched official LINE accounts at the beginning of the year, and were joined by Prada in February.

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As these new brands launch on the platform, they’re forcing early adopters including Coach, Michael Kors, and Burberry to step up their game to keep up with luxury marketing innovations. In the months since its January launch, Louis Vuitton has surged ahead of competitors, generating 237% more interactions per post in April than the Index Luxury brand average, despite a lower follower base. Its engagement was boosted by offering exclusive LINE wallpapers, including a set of wallpapers inspired by its Cruise 2018 fashion show in Kyoto as well as a promotion offering a wallpaper download to followers who visited its official message menu eight days in a row.Luxury Japan Line News - Retail in Asia

Fendi is also investing in LINE with a strategy that understands the role of LINE as a closed one-to-one communication tool, where users expect brands to behave more like their friends and less like advertisers. The brand used chatbots to reveal exclusive celebrity content when users message a designated keyword, and utilized gamification for a virtual slot machine that offered the chance to win an original Fendi USB flash memory stick.

Fendi News - Retail in Asia

In addition to keeping up with competitors, brands should also monitor LINE’s growing list of services as additional opportunities to differentiate. Like China’s WeChat, LINE is expanding its functions in an attempt to become an operating system within itself. Its payment service LINE Pay now boasts 30 million users, while it also offers features such as livestreaming and social games. LINE launched LINE Business Connect in 2016, which allows brands to sync their customer databases and run one-to-one marketing campaigns. LINE also recently announced that early this summer, it will release a Siri-like AI digital assistant called Clova that will be available through its new Wave speaker, which is similar to the Amazon Echo. Unlike the social platforms focused on viral campaigns, LINE offers a wide range of opportunities to brands to implement valuable CRM, payment, and personal communications strategies to resonate with shoppers in Japan.

This article was written by analyst Yo Douglas.

(Source: L2 Inc)