■ “Commerce,” “Local Vertical,” “Fintech” and “Public Services” designated as four focus areas
■ JPY 500B investment and 5,000 AI engineers to be hired over the next five years
■ JPY 2 trillion revenue and JPY 225B operating income targeted by FY2023
TOKYO – March 1, 2021 – Z Holdings Corporation (“ZHD”) and LINE Corporation (“LINE”) announced today the completion of the business integration between the two companies.
ZHD and LINE, together with their respective parent companies, SoftBank Corp. (“SoftBank”) and NAVER Corporation (“NAVER”), have carried out a series of transactions in order to realize the business integration, after having concluded a Memorandum of Understanding on Business Integration in November 2019, Definitive Agreement on Business Integration in December 2019 and Business Alliance Memorandum of Understanding in August 2020.
Various discussions have also been held on the businesses operated by the two companies so that synergies can be swiftly generated following the integration.
Today, the business integration has been completed with the effective execution of the share exchange provided in the Share Exchange Agreement concluded between ZHD and LINE Demerger Preparatory Company on January 31, 2020, as part of the agreements related to the business integration.
The ZHD Group, with 23,000 employees and over 200 services under its umbrella, is now one of Japan’s largest internet companies, with a combined total of over 300 million users, 15 million corporate clients and over 3,000 collaborative projects with various municipalities.
Following the integration, the ZHD Group reach now covers information, payment and communication, all of which are indispensable to people’s lives. By enabling people to “Achieve Even More” with the power of the internet, the ZHD Group strives to create new value by solving various societal issues in Japan and overseas, providing more convenience and contributing to a thriving society.
While ZHD Group will continue focusing on Yahoo Japan Corporation (“Yahoo! JAPAN”) and LINE’s core business areas of “Search/Web portal,” “Advertising” and “Messenger,” it has also designated “Commerce,” “Local Vertical,” “Fintech” and “Public Services” as its four new focus areas. We will apply data and AI technologies to each of these areas to introduce more convenience for our users, customers and greater society.
■ Focus areas
1. Commerce
● Social commerce and linkage with physical stores (X Shopping)
Through social commerce using the LINE app, ZHD Group aims to realize a world where people can buy what they want at the best price anytime and anywhere. Various services will be introduced, including “Social Gift,” allowing users to send LINE friends gifts, “Team Purchase,” allowing for discounted bulk purchasing with friends, and “Live Commerce,” a platform linking users with influencer videos. In addition, “X (Cross) Shopping” is a new shopping experience that links product data of both online and offline stores, allowing users to choose the method of purchase that best suits their needs. There are also plans to introduce “My Price Initiative,” a dynamic pricing function, and we are considering consolidating loyalty rewards programs in the future.
● Providing e-commerce (“EC”) solutions via “Smart Store Project”
We plan to launch “Smart Store Project” in the first half of 2021, utilizing NAVER’s knowledge in EC. Through this service, we will provide business operators with EC solutions, including tools for site creation, operation and analysis for their own websites, as well customer service and traffic referrals. In the future we plan to provide additional tools that will enable businesses to operate their online and offline stores on a single screen.
2. Local Vertical
We will provide solutions to support businesses’ digital transformation through AI in the “Local Vertical” category, which includes services such as accommodation and restaurant reservations. In advertising, we will provide new marketing solutions to businesses through collaborations with Yahoo! JAPAN, LINE and PayPay that will allow companies to carry out more effective marketing and enable users to receive even more personalized deals.
3. Fintech
We are preparing to link merchants that allow payment through PayPay and LINE Pay. Starting late April 2021, LINE Pay users will be able to make payments at the over 3 million PayPay merchants across Japan*1 that use the merchant-presented mode (MPM). PayPay and LINE Pay have also begun discussions on integrating LINE Pay’s QR/barcode payment into PayPay in April 2022*2.
*1 Stores and taxis registered to PayPay as of February 24, 2021
*2 In order to link and provide services, companies are required to meet the legal requirements necessary to conduct business operations.
4. Public Services
We will focus on public service digital transformation, disaster prevention, healthcare and efforts to address societal challenges through public-private partnerships. In addition, through “LINE Doctor,” a service for users in Japan provided by LINE Healthcare Corporation, we will make telemedicine services more convenient and accessible by developing new services, ranging from online medication guidance to medication delivery and online medical treatment. We are aiming to start online medication guidance by the end of fiscal year 2021 and will work to make “LINE Doctor” No. 1 in Japan.
■ Investment and global business expansion
The ZHD Group aims to create new value by integrating AI into all of its services. In order to grow each business centered on AI, ZHD Group plans to invest JPY 500 billion and expand its pool of talented AI engineers, both domestically and overseas, by 5,000 people over the next five years. In addition, the company intends to leverage its global successes to enhance its services and develop new products and features. Through the knowhow and experiences learned from LINE’s key overseas markets of Taiwan, Thailand and Indonesia—and from around the world—ZHD Group will be able to improve our services and capabilities globally, including in Japan. We also intend to fully utilize the deep knowledge and network of SoftBank and NAVER with our overseas ambitions.
■ Data handling
With the handling of data, we will continue placing utmost priority on privacy and security by providing easy-to-understand explanations for our users, operating in accordance with applicable laws and regulations and seeking the advice and evaluation of experts. We will also continue to provide thorough and transparent explanations when obtaining user consent, and will strive to ensure safety and security by complying with various international standards.
■ Management structure and policies
Under the new management structure announced today*3, ZHD will aim to generate synergies and promote the growth of businesses and services. ZHD aims to achieve JPY 2 trillion in revenue and a record high operating income of JPY 225B by fiscal year 2023.
*3 Notification on Changes in Representative Director and Appointment of Directors/Officers
Group Structure https://www.z-holdings.co.jp/en/pr/press-release/2021/0301a/
ZHD will continue to provide the best user experience to all of its users globally and strive to solve societal issues using the power of the internet. We aim to become the “World-Leading AI Tech Company from Japan and Asia,” providing the best user experience to Asia from Japan.
