Asian instant messaging apps spin online chatting into cash
Apps such as Line, WeChat, and KakaoTalk can bring in US$1 to US$4 per monthly active user every quarter, analysts say
In the social media age instant messages translate to instant money, and for Asian messaging apps that can mean US$1 to US$4 per monthly active user (MAU) every quarter, analysts say.
A Morgan Stanley report forecasts dominant instant messaging applications such as Japan-based Line and WeChat in China will post gains in the third quarter while Korea’s favoured KakaoTalk will stall.
These messaging apps are increasingly carrying weight in Asia, with Line at 218 million monthly active users, WeChat booming at 806 million monthly active users, and Kakao reaching 40 million of the around 50 million users in Korea. As users fire off messages and emojis on these apps, the companies look for new ways to cash in through in-app advertising, but also from mobile games, banking, and e-commerce.
“Messengers have diverse revenue streams,” Morgan Stanley analysts led by Sam Min wrote in a report.
Line Japan has the highest advertising revenue of the three at US$1.1 to US$1.5 per MAU per quarter, with its advertising profits “likely to rise sharply” in the third quarter from performance-based ads, Morgan Stanley said. Line’s third quarter sales are projected to reach 39.3 billion yen (HK$2.92 billion), 23 per cent higher than last year and a 16.2 per cent increase from the second quarter, the analysts said.
The app announced in September it would buy a 25 per cent stake in Snow, a version of Snapchat focused on the Asia market, that analysts say is a positive investment for the company.