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【Yahoo and LINE】The No-Side Phenomenon Seen in the LINE/Yahoo Business Integration. A Game Changer in the Smartphone Payment Market
In a nutshell
- The top players in the smartphone payment market have chosen to merge after a war of attrition. This is a game changer.
- Let's take a look at the players in the smartphone payment market. If we look only at QR payments, the integration of Yahoo and LINE will be a rival to the dominance of Suica. SoftBank G should be seen as having successfully acquired the valuable recognition of the elderly by spending 10 billion yen and docking Yahoo and LINE. The market has shifted to a war of annihilation for unification, just like the flea market app of the past. Let's consider the survival tactics of each company.
- Andy Grove of Intel called the dramatic changes in the market "inflection points," and in his book "Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company (Nikkei BP/2017)," he talks about the secrets of management to prepare for inflection points based on his own experience of Intel's CPU transition.
LINE and Yahoo to merge. Game changer.
Shocking news has just come in. The business integration of LINE and Yahoo. It seems that Yahoo and LINE will each have a 50% stake (why is it equal? It will definitely be difficult to manage unless it's 51:49) in a joint venture, which will have a 100% stake in Z Holdings.
The QR payment market, which began in 2019, may have its hegemony almost decided by the integration of the top players. With the business integration of LINE and Yahoo, the war has shifted from a war of attrition to a war of annihilation for unification. By the way, the reason I'm writing this in a Sengoku period style is because I've been playing too much Nobunaga's Ambition.
Such a phenomenon in which the competition between players in the market changes significantly is called a game changer. The game changer in the market that occurred a little while ago in the flea market app, from the rise of Fril in the flea market warring states period from Yahoo Auctions, and then the shift of hegemony to Mercari, has finally occurred in QR payments as well.
Well, I think many experts and NewsPickers can smoothly state the merits of the business integration, so I hope to say something interesting to the readers of this article, focusing on the game changer in the market.
Players in the smartphone payment market and their path to survival
A battle for hegemony in the QR payment market was being waged under the watchful eye of the strongest player not shown in the diagram below, Suica-kami.
By integrating the top two players, the new company will surely hold the hegemony of QR code payments.
In addition, by integrating not only payments but also message users and Yahoo's various services, SoftBank G, which is shaken by the WeWork problem, can stabilize the foundation of Yahoo, which has been in a slump recently, and turn it into a cash cow. Even so, this is a much more solid judgment than the investment judgment of the Vision Fund at the time of WeWork.
However, what gonjitti is concerned about is the path to survival for other companies. If things continue as they are, they will just be annihilated. I will arbitrarily set up a rescue committee and think about survival strategies.
First, Rakuten Pay. I actually use it often, but it has a stable customer base and is scheduled for a demonic union with Suica-kami in 2020. In other words, it's fine to just watch for now. If anything, they should be steadily promoting cooperation with Rakuten Bank, Rakuten Securities, TOTO, and the lottery. If the Suica cooperation is not an exclusive contract, there are some remaining uncertainties.
Next is gonjitti's favorite, Origami Pay. They have fought well so far, and recently announced an alliance with the retail industry, and I feel that the app's performance is currently the easiest to use. However, they have too little capital and it will be a tough fight. As for gonjitti, I think they can continue to fight if they are acquired by aiming for the replacement of the point systems of various retail companies and GMS, or if they strengthen their alliances like T-Point.
Merpay. They have been fighting with the strong foundation of Mercari. They have achieved hegemony in the flea market app. But Merpay is honestly in a tough spot. Their strategy is half-baked, and the difficulty of using it when linking Mercari and Merpay, which requires ultra-high IT literacy, is still there. The strategy of promoting deferred payment is extremely correct, and I think they can firmly capture the younger generation, but it seems that they will end up not making progress in store development. They should hire salespeople.
As for other payment services, I think it is necessary to enter the market after improving the usability of their own apps. They should strive to improve the story and UX.
Well, it's just the ramblings of an engineer, and I don't think you need to take it too seriously, but I'd be happy if it was helpful somewhere.
Learning from former Intel CEO Andy Grove
By the way, changing the subject, do you know Andy Grove, the CEO of Intel?
World Economic Forum from Cologny, Switzerland - World Economic Forum Annual Meeting 1997 - Klaus Schwab & Andrew Grove, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=3548252
In the 1980s, at a turning point when Japanese manufacturers were gaining hegemony in the memory market, he foresaw that the vertically integrated PC industry structure would become a horizontally distributed structure, and he was a master manager who completely transformed Intel from a memory manufacturer to its current CPU manufacturer.
From "Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company (Andy Grove/Nikkei BP)"
His judgment can be said to be a management strategy in preparation for the game changer in the QR payment market this time. However, at that time, he threw away all of his main business of memory manufacturing, so the energy he put into actually taking action was tremendous.
I will go into details in another article, but for now, why not try reading "Only the Paranoid Survive"? It just so happens that the foreword is written by Takao Ozawa, the person involved on the Yahoo side.
Aside
Yahoo and LINE stocks had been rising for a month before the business integration. Information is leaking. I had a feeling something was up, just like with ZOZO, but I couldn't have predicted this. 【ZOZO】Decoding the stock price movement of the Yahoo-ZOZO acquisition with the former premium economics book 【The Market is Alive】
Aside (Recommended Book)
A recommended design book. It's packed with design tips that you can use forever. I use it often myself.
