Rakuten – a new era of borderless retail and entertainment

Today, Japanese company Rakuten is the world’s third largest marketplace, behind Amazon and Ebay. With nearly 10,000 employees, Rakuten operates in 13 countries. Last year the e-commerce giant sold $15 billion worth of goods globally; and in Japan Rakuten is by far the dominant online retailer in a host of categories, including apparel, food and household goods.

Diversifying capabilities through acquisitions

Last month Rakuten launched Rakuten.co.uk in a bid to tackle the UK market. According to TechCrunch, the new UK marketplace will sell goods from Rakuten and third party retailers, in addition to its Kobo ebook store and Wuaki video streaming service.

This latest move follows previous expansions into Europe through acquisitions including: PriceMinister – France, Tradoria – Germany and Wuaki -Spain. Alongside these acquisitions, Rakuten has also bought e-commerce sites in Brazil, Thailand, Malaysia, Indonesia and Taiwan, in a bid to further their global expansion and reach.

In November, the e-commerce giant announced the acquisition of Beauty Collection – an online portal that connects users to more than 2000 hair, nail, eyebrow and relaxation salons across Japan. In 2012, it also launched Rakuten Salon, with an emphasis on helping customers find hair salons and book appointments online. The acquisition will help Rakuten’s expansion into beauty services, while gaining brand exposure to its 95 million members.

“It’s clear to see, Rakuten are expanding its influence beyond traditional e-commerce and compete with the likes of Amazon and Alibaba beyond the limited span of the Japanese archipelago”, TechInAsia commented. Recent acquisitions including purchased messaging service Viber in February, an analytics firm DC Storm in May and coupon service Ebates in September, clearly denotes that they are building capabilities to diversify their strategy to better understand their customer base and target audience.

Ometenashi and the online world

“Founded by Mikitani in 1997, Rakuten is the largest e-commerce site in Japan. With a market cap of $13.5 billion and annual sales of over $4 billion, it is one of the biggest internet companies in the world”, states online publication Fortune. Often called the “Amazon.com of Japan”, Rakuten focusses on the importance of the shopping experience itself. The company’s proposition is based on the principle of “Ometenashi”, which is the Japanese concept of providing high quality and personal service. “In Japan, if you go to a local coffee shop, grocer or any local business, you will find a very high level of personal service”, says founding director, Mikitani. He continues; “The internet should be that way as well”.

Mikitani says Rakuten tries to create a personal shopping experience for its users by allowing each seller on the site to customise their page with unique layouts, pictures and promotions. “We want to make them feel like there really is a person in there,” says Mikitani.

Nearly 90 percent of Japan’s internet users are registered on Rakuten, with more than 40,000 different businesses and services registered online. Rakuten’s service of providing rankings for its sellers is a huge factor in their success. “We are really an incubator, people trust our curation”, say Mikitani. “We see our role as amplifying the characters of the shop”.

The vision

Earlier this year, the e-commerce giant stepped up its global presence in the US by purchasing Buy.com for $250 million and rebranded it to ‘Rakuten.com Shopping’.

“We are eager to launch the new fashion site”, company president Fumio Kobayashi said of their entry into the US. With brands like Ray-Ban, Polo Ralph Lauren and much more in its inventory, the online retailer hopes to attract a young demographic by combining fashion with entertainment – something that Rakuten representatives say is missing among other e-commerce giants.

The new site puts Rakuten’s UK offering on the same global platform as Rakuten’s other businesses. Mike Bishop, managing director of Rakuten.co.uk told Internet Retailing, “Ultimately all the Rakuten marketplaces around the world will be connected on one platform, which enables retailers from the UK to start selling to consumers in all those places. Over the next 12 months we will pioneer a new era of borderless retail and entertainment by integrating our e-commerce offering with our global ecosystem of internet services, to make shopping more fun”.