Line Man Wongnai and Line Thailand aim to capitalise on an e-payment opportunity and synergy within their business ecosystem to further grow their businesses.
The companies last month disclosed their joint acquisition of the shares of Rabbit Line Pay Co (RLP) from the previous shareholders, RabbitPay System Co and Advanced mPAY Co. The transaction allows Line Man Wongnai to become the majority shareholder of RLP.
According to the Bank of Thailand, in 2022 Thailand's e-payment volume rose to 28 billion transactions from 20 billion transactions in 2021, while the value of e-payments as of December 2022 tallied 46.6 billion baht, up from 39 billion baht in January 2022.
"We see growth in e-payment opportunities in Thailand. To acquire shares from the existing shareholders in RLP will be a major milestone for our growth," said Yod Chinsupakul, chief executive of Line Man Wongnai.
According to Creden data, a business analytics performance website, Rabbit Line Pay has three major shareholders -- Advance mPay, Line Pay Corporation in Japan, and RabbitPay System Co -- all with an equal 33.33% holding.
After the acquisition, Mr Yod and Mr In Young Chung, Line Man Wongnai's chief finance officer, will become the new chief executive and chief financial officer of RLP, respectively.
The purpose of this acquisition is to bring RLP payment services closer to the Line ecosystem, including Line Man, Line Shopping, Line App, and Wongnai's merchant network. The new ownership structure will accelerate innovation in RLP and create a more seamless experience within Line Man Wongnai's services and also within the wider Line ecosystem.
RLP users will not see any impact from this change of ownership structure. RLP users can keep using RLP payment services in existing channels, including the BTS Skytrain ticketing system and Advanced Info Service's bill payment services.
"We want to use our strength of over 10 million Line Man and Wongnai users, over 500,000 merchants, and over 100,000 riders to create a coherent transaction experience for all stakeholders. With the addition of RLP, we believe Line Man Wongnai is uniquely positioned to help digitalise the Thai economy," Mr Yod said.
He added that this is the second acquisition for Line Man Wongnai, following its recent acquisition of Foodstory.
"We are open for organic growth, acquisition and partnership, and paving the way for Line Man Wongnai's IPO [initial public offering] by 2025," said Mr Yod.
Mr Yod said the company will develop more partners to drive the growth of RLP and new services and any new form of online and offline payment opportunity.
RLP has a long presence among Thai e-payment users, covering a wide range of online and offline payment channels. RLP offers seamless payment services, including a secure digital wallet, and quick on-the-go payment options for purchases, money transfers, or top-ups. RLP currently has 10 million users who can be encouraged to use the Lineman app and other Line services.
Mr Yod said Lineman Wongnai aims to make RLP profitable soon.
According to Creden data, in 2022 the gross revenue of RLP was 1.2 billion baht, while it recorded a net loss of 105,370 baht.
"This new structure will enable more synergy in the Line ecosystem in Thailand with 54 million users, mainly Line Shopping and other services," said Phichet Rerkpreecha, chief executive of Line Thailand.
Mr Phichet said Line can support the government's planned digital wallet with its existing payment infrastructure in RLP or use of Line's blockchain technology from Japan.
Mr Chung said the acquisition would enable Line Man Wongnai to optimise financial transaction costs of up to 50%.
"After Covid-19, e-payments grew rapidly to give this e-payment business high potential. This is why Line acquired shares to control synergy in its ecosystem. Before Covid-19 we used a joint venture model," he said.
He said this was nothing to do with an ongoing merger in Japan. SoftBank-backed Z Holdings will merge with its two wholly owned subsidiaries – Yahoo Japan and messaging app Line – by March 2024 to streamline its operations in a bid to position itself as a world-leading artificial intelligence company.