"In situations where you need to speak quickly we will use German. I might shout to tell him that somebody is coming behind to close him down," Lovren told British media.
Lovren spent seven years in Germany as a child while Matip, who has missed the last five games through injury, was born and brought up in the country.
"It seems to work, especially when we are up for corners and I can communicate with him about where to go. If it's in German, the opponents can't understand what we are saying," Lovren said.
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"We've definitely developed a nice relationship. I'm really enjoying playing with him.
"He's a cool guy, really calm and we already know each other much better and how we both like to play. Hopefully that will continue for a couple of years."
Liverpool are second in the league, five points behind Chelsea after 20 games. They host fourth tier side Plymouth Argyle in the fourth round of the FA Cup on Sunday.
(Reporting by Shravanth Vijayakumar in Bengaluru; editing by Amlan Chakraborty)
