LINE FRIENDS, which once earned more than one billion yuan a year from its emoticon IP and became popular in China, recently received news of closing its offline stores. This made the outside world wonder. Brown Bear and Coni Rabbit, who were once so cute among Chinese people, Has it fallen out of favor?
Early last month, LINE FRIENDS closed its flagship store on Huaihai Road in Shanghai. Prior to that, it had successively closed offline stores in Hangzhou, Chongqing, Beijing and other places.
LINE FRIENDS was born in 2011 from LINE, an instant messaging software active in Japan. Fans are very fond of these cartoon characters: Brown Bear, who is chubby and has a poker face; Connie Rabbit, who is expressive and always smiles; Sally Chicken, who has thick lips and a cute face...
LINE FRIENDS It has four IP series, namely BROWN & FRIENDS, BT21, ROY6 and BRAWL STARS. Using these IPs as its own assets to produce image licensing and peripheral products, this mature business model has brought annual revenue to the parent company LINE to more than one billion yuan. IP licensing accounts for the bulk of
LINE FRIENDS's revenue and is also the fastest growing part of its business. However, as we all know, offline stores are expensive and expensive, and are far less easy to make money than IP licensing.
In China, IP co-branding has become a shortcut for many brands to quickly launch new products (such as Miniso), which has also made IP licensing a big business. The "2021 China Brand Licensing Industry Development White Paper" shows that my country's annual retail sales of authorized goods reached 110.6 billion yuan last year, a year-on-year increase of 11.5%. Among them, entertainment IP, including cartoons and animations, accounted for nearly 60%.
can make a lot of money just by relying on IP licensing, and offline stores have completed its historical mission. Therefore, LINE FRIENDS chose to shrink its offline front.
An industry insider said in an interview with 36Kr-Future Consumer that offline stores are gathering areas for consumers, especially in the initial stage, and can play a role in gathering consumers and brand promotion. But after reaching a certain level, it becomes no longer important, and further IP derivation and scene expansion can be done through online and social platforms themselves.
LINE FRIENDS’ statement also confirms this. The relevant person in charge of LINE FRIENDS told 36Kr-Future Consumption that in the future, LINE FRIENDS will comprehensively carry out digital strategic layout, develop digital assets with content as the core, and develop new digital IP formats. In the future, offline will focus more on re-retail layout, pop-up store activities, and space-related theme licensing.
Judging from the current LINE FRIENDS co-branding and growing licensing revenue, LINE FRIENDS is still a popular IP among domestic consumers, but to a certain extent, it is indeed not as popular as it used to be.
Many young consumers told 36Kr-Future Consumer that there are too many competing products of LINE FRIENDS today, and this IP does not show such strong irreplaceability.
Emoticon Pack Printing Machine
In LINE's sticker store, you can see LINE FRIENDS emoticon packs, as well as Doraemon, Hello Kitty, Crayon Shin-chan, Tom and Jerry and other classic images that evoke your childhood memories.
How much does it cost to use these paid emoticons? The purchase page shows that the minimum spend is 120 yen (approximately 7 yuan), which can be exchanged for 50 virtual currencies; the minimum spend of 250 yen (approximately 14.5 yuan) can be exchanged for 100 virtual currencies, and a set of newly launched emoticon packs can be purchased.
It will cost dozens of yuan to download two or three sets at will. This business seems to be extremely profitable. In comparison, WeChat, the chat tool that competes with LINE, takes a different approach. Most of the emoticons provided are free, which shows that the profit models of the two sides are very different.
Of course, in addition to emoticons, LINE also makes money from games and advertising. The communication business, which mainly sells emoticons, only accounts for less than 30%. In 2015, paid emoticons contributed approximately 1.7 billion yuan in revenue to LINE, accounting for nearly 24%.
Seeing the popularity of emoticons, LINE continues to develop new IPs, continues to cooperate with some well-known global brands, and produces a large number of derivatives and content.
is first of all the BROWN & FRIENDS series represented by Brown Bear, Coni Rabbit, Sally and other characters, with a total of 11 cartoon characters. These IPs appear more in the form of official products sold in stores, such as plush toys, stationery, clothes, limited editions, etc.
As LINE FRIENDS becomes popular in Japan and Southeast Asia, stores are also expanding to China. Media reports stated that 2016 was the fastest year for LINE FRIENDS offline stores to expand in the mainland market, with 6 stores opened in Guangzhou, Nanjing, Shenzhen and other places.
Brands with high popularity often become popular before they are launched. LINE FRIENDS’ theme stores, shops, and theme parks are no exception. The newly opened stores have so many customers that there are long queues.
First of all, offline stores serve as terminals for product display and sales. Their main function is to attract customers to spend and check in and take photos. There are more than 6,400 product SKUs, most of which attract consumers' desire to buy with their cute designs and practical functions.
In the retail sector, LINE FRIENDS also launched a cafe to increase sales. For example, the Shanghai Huaihai store opened in 2016 has a cafe on the second floor and launches an afternoon tea set that is exclusively sold nationwide and costs 318 yuan. The Shenzhen Coast City store opened in the same year also combines two business formats: a store and a cafe, selling desserts, coffee, beer and snacks.
Offline stores are only part of it. The traffic password of LINE FRIENDS lies in the authorization business. Since 2018, LINE FRIENDS has started operating its own licensing business in the Chinese market, growing at an annual rate of about 20%. There are more than 100 cooperation partners, including global brands such as Uniqlo, Watsons, and Mentholatum.
Starting in 2019, LINE FRIENDS’s brand cooperation will focus on expanding into the fields of travel, sports, and entertainment. The result was that the licensing business that year increased by 80% year-on-year, and the performance in the Chinese market also increased by 38% compared with the previous year. In addition to its commercial value,
IP also has emotional value for fans. The "cute economy" of LINE FRIENDS is driven by young people's awareness of the brand. Therefore, in addition to online marketing, it also plans a large number of offline activities to interact with fans, including pop-up stores, theme exhibitions, and landmark tours in cooperation with different city landmarks. Projects etc.
Generation Z is the main force in the two-dimensional culture and is willing to consume games and idols. So LINE FRIENDS cooperated with some celebrity artists to create new IP images BT21 and ROY6, and also launched a new IP BRAWL STARS with a mobile game company. There are more than 30 cartoon characters in the four series.
not only builds its own IP system, LINE FRIENDS also develops new external cooperation models, such as “NEVER’SFAMILY”, an IP brand jointly incubated with Li Jiaqi.
In short, the success of LINE FRIENDS lies in the mature industry chain layout and expanding influence through online and offline channels. The popularity of LINE FRIENDS is often used to discuss the business opportunities contained in emoticons.
Super IP competition
In the early days, overseas IPs seized the relatively blank Chinese market and enjoyed a wave of dividends. Like LINE FRIENDS, there is also KAKAO FRIENDS from South Korea that has the ability to attract money. From the growth path of
, the two are quite similar. KAKAO FRIENDS was born in November 2012 and became popular through the emoticons of the chat software Kakao Talk. There are a total of 8 cartoon characters such as the pink Bobo Peach, the maneless Lion, and the white Rampant Duck.
KAKAO FRIENDS has developed rapidly in recent years and has become the leading IP in the local market. According to "Sanwen Entertainment", the total sales of KAKAO FRIENDS in 2019 reached 841 million yuan, with more than 7,500 kinds of emoticons, and the cumulative number of purchasing users reached 21 million.
makes nearly 900 million a year from emoticons, and KAKAO FRIENDS has also found a stepping stone. However, it entered the Chinese market later than LINE FRIENDS. It held its first offline pop-up event in March 2019, and opened its first offline store in the mainland in September of the following year, both in Shanghai. .
, like many IPs, has launched emoticons in WeChat stores, sold peripheral products on major e-commerce platforms, and continuously launched co-branded models. KAKAO FRIENDS is skillfully opening up the link for IP monetization.
observed that the two brands LINE FRIENDS and KAKAO FRIENDS both started from emoticons on social software, accumulated high popularity, and accelerated the materialization of IP step by step.
has similar genes to these two well-known IPs. The domestic QQfamily owned by Tencent is worth mentioning.
Do you still remember the QQ emoticon package? Speaking of QQfamily, the first thing that comes to mind is the penguin wearing a red scarf, which has become the representative of QQ.In addition, there are babyQ, white bear Dofu, seagull Oscar, parrot Anzi, and human friend Kana. These six cartoon characters made their debut in 2014.
QQfamily is positioned as a social IP and is active on a super platform with more than 800 million users. It can be said that it enjoys unique advantages. After all, it is supported by Tencent's huge traffic and social relationship chain. However, judging from the progress of commercialization, QQfamily does not seem to be in a hurry to realize cash.
From the IP matrix, QQfamily is not as rich as LINE FRIENDS and KAKAO FRIENDS. Compared with the other two, QQfamily is more involved in the social scene.
is backed by entertainment and social platforms such as QQ. QQfamily began to work hard on the content side, outputting content through animation, movies, games, and publishing.
took stock of several domestic IPs, and then looked at the global market. The most profitable IP is Pokémon - Pikachu is the face.
Judging from data released by the statistics agency Statista, since the release of the Pokémon series in 1996, the amount of money attracted has reached 100 billion US dollars. Next is Hello Kitty, which made nearly $84.5 billion. The commercial value created by becoming a top IP is evident.
New players are catching up with
. On the one hand, super IPs are beginning to seek changes, and on the other hand, the number of players pouring into the content creation field is increasing.
For example, Twelve Buildings Culture, which first became popular with the two series of emoticon packs "Changcaoyan Danzi" and "Cooling Girl", began to emerge. It has more than 300 cartoon and animation IPs, and the cumulative download volume of emoticons exceeds 1.2 billion. Since its establishment, Twelve Buildings Culture has completed 9 rounds of financing.
Twelve Building Culture once said in an interview with 36 Krypton that in the early stage, IP gained traffic dividends from the instant messaging ecosystem and gradually gained national recognition. The turning point for IP monetization has reached, and a platform will be built to help more IP creators monetize. It can be seen that "LLJ clip machine accounting" and blind boxes in offline stores have become new ways to monetize. The innovation and life cycle of
IP itself have always been the focus of attention from the outside world. Take leading IPs like LINE FRIENDS as an example. There are countless competitors and they are also thinking about how to maintain their appeal.
In the eyes of some people born in the 1990s, Japan's animation industry is developed. For example, Sanrio owns more than 500 portrait stars such as Hello Kitty and Lazy Dandan, and more than 10,000 kinds of products are launched on the market every year. IP giant Disney has countless classic works, as well as many other animation peripherals. “It’s a fact that there are too many competing products.”
Regarding the current popular culture created by IP, LINE FRIENDS believes that the real super IP is not affected by the changes of the times and can rely on its own values to continue to influence consumers in every era, especially young people. To achieve this, in addition to the image conforming to public aesthetics, content support is essential. At present, the trendy image IP is very popular, which is of great help in promoting the development of the industry. Opportunities and challenges coexist.
As for the topic of how profitable the emoji business is, it is true that emojis have become the source of IP. This job seems to have a low threshold, but in fact the competition is fierce. However, high-quality IP itself is scarce, and it also faces piracy problems after the fire.
An industry insider said that the core of emoticons is cuteness, but this is only the initial stage. There are indeed many domestic two-dimensional brand competing products, but they are all the same as their predecessors. They have products but no stories, cute points but no series, and designs but no world (view). Such products will become a trend for a while, but they will not settle into Lasting two-dimensional culture.
"So it’s not difficult to copy. The difficulty lies in how to give your IP a soul like Disney and Marvel, and truly become some kind of 'friend' or companion for the user, or even connect the IP into a leafy, intertwined, complex plot." , an IP forest worth exploring. This may be the entry point for brands in the latter stage, and it is also the key to breaking the bottleneck,” said the person above.
