Competing with giants

“If they manage to do that once this merger pushes through, then we might have a new global digital ballgame. Let us just wait and see.

If there’s a positive indication that the trade war between Japan and South Korea is simmering down, it’s the planned merger of two technology companies from the said countries by the end of 2020.

Yahoo Japan and South Korea’s messaging service Line announced the merger last week, signifying their plan to go head-to-head with tech giants like Amazon, Google, Tencent, Facebook and Apple.

This is not only a sound business deal but a mandatory arrangement if Naver (Line’s parent company) and Z Holdings (Yahoo Japan’s operator which is part of SoftBank Group Corp) want to survive the highly competitive and evolving industry.

This merger will turn them into major players in Southeast Asia where the rise of e-commerce has become very evident. Rakuten, a Japanese company which bought Viber in 2014, has even pulled out from online shopping in some markets due to competition from Chinese companies.

Before Yahoo Japan and Line put their boxing gloves on for the Southeast Asia ring though, they must first ensure control of their own domestic markets.

Online payment and search engine services are only a few segments that Yahoo and Line should have an impact on. Google has not been particularly dominant in South Korea. Yahoo, meanwhile, is the most popular search engine in Japan.

Private messaging services are also essential not only to source online transactions but to gather data from among its users.

According to Statista, these are the most popular global messenger apps as of October 2019: WhatsApp (by Facebook), Facebook Messenger, WeChat (by Tencent), QQ Mobile (by Tencent), Snapchat (by Snap) and Telegram (Founded by Nikolai and Pavel Durov).

In the Philippines, Facebook’s Messenger is the top messaging app that has the largest penetration according to We are Social and Hootsuite digital report in January 2019. It is followed by Viber, Snapchat, WhatsApp, WeChat and Line.

The same study also shows that Facebook is still the go-to platform for Filipinos followed by YouTube. Instagram, Twitter, Skype and LinkedIn are also widely used here. Other platforms include Pinterest, Reddit and Tumblr.

Going back to the Yahoo Japan and Line merger, it is highly anticipated in the region, but some analysts say this is just a minor deal which would not create a dent in the larger picture.

I beg to differ. What I see is that two companies are putting their heads together to improve their capacities and capabilities to reach a wider global audience. The challenge is to maintain their own market strongholds while at the same time fending the continuous expansion of US and Chinese companies.

If they manage to do that once this merger pushes through, then we might have a new global digital ballgame. Let us just wait and see.