Line Friends is closing its stores on the Chinese mainland as part of a brand strategy adjusted to focus on content-centric digital assets.
Photo from CFP
By WEI Xianghui
Fallen messaging app Line spin-off, Line Friends, is closing its stores on the Chinese mainland, with the flagship store in Shanghai having lowered its shutters for the last time on May 5th.
The Huaihai Road store was the company's first in Shanghai, covering nearly 800 square meters, with a cafe. Giant plastic bears, chickens and rabbits adorning the exterior attracted many more selfie addicts than actual customers. Line has already closed its stores in Hangzhou, Chongqing and Beijing, to name just a few, leaving only two of the previous 12 outlets, one in Chengdu and another in Nanjing. The company told Jiemian News that all its stores will soon be closed.
Line insists that everything is going according to plan. Closing all their stores had been the tactic all along and part of its “overall brand strategy," centered on what the company describes as “content-centric digital assets.” Store closures are described as “phased and scheduled.”
The Line messaging app was made by a Japanese subsidiary of Korea’s NHN, which then expanded to include games and emojis. In July 2014, Line's messaging and gaming operations in China were closed down and a few months later, Line Friends began – upmarket coffee shops with “merchandise” – and selfies did the rest. In 2016, stores opened fast in China.
The landscape has shifted significantly since then, and the whole Line Friends ecosystem seems old-fashioned and tired. Today, there are cafés festooned with selfie gimmicks in every city in China.
However, the price-performance ratio and insufficient innovation have become more obvious, almost on a daily basis. New IPs emerge constantly and there is no room for an old-timer.
"The Line Friends user experience is nothing more than static cartoon images for group photos and lacks interactivity. Products are simple and slow to update. This lack of innovation leads to a low repurchase rate and weak customer stickiness," said ZHOU Jie of Cushman & Wakefield.
What is doing well is the Line Friends' authorization business, essentially sticking pictures of bears and rabbits on mugs and T-shirts. The business has been operating since 2018 with annual growth approaching 20 percent and involving more than 100 brands from coffee to leisurewear.
In August last year, LI Yiyong, general manager of Line Friends China, told the China Licensor Conference that Friends’ licensing business in China increased by 80 percent in 2019 and announced a new direction for the venture including games, livestreaming and short animations – a "lighter" content field. Line Friends has teamed up with WeSee, a Tencent short video platform, and plans to establish a content center for the Chinese market.
As for the café’s, the brand is to pursue a pop-up store model, perhaps in cooperation with urban landmarks. Offline purchasing channels are now basically vending machines and pop-up stores. The brand expects to install as few as 100 vending machines in bigger cities by the end of the year.
