Rakuten: A Global E-commerce Giant and Gateway to Asian Markets
Rakuten, Inc., is a leading name in Global E-commerce, especially in Asian markets. Its flagship marketplace, Rakuten Ichiba, in Japan, offers over 142 million products from more than 40,000 merchants. This serves 85.5 million registered customers, showcasing Rakuten’s success in creating thriving online marketplaces.
Key Takeaways
- Rakuten Ichiba hosts over 142 million products from more than 40,000 merchants.
- Rakuten’s loyalty program, Rakuten Super Points, significantly boosts customer engagement.
- Rakuten operates in over 30 countries with diverse services across various sectors.
- Rakuten’s strategic investments and partnerships support its global expansion.
- Rakuten’s innovative use of technology positions it as a leader in e-commerce and beyond.
Introduction to Rakuten
Founded by Hiroshi Mikitani in Tokyo in 1997, Rakuten has grown into a major technology conglomerate. The company’s flagship online shopping marketplace, Rakuten Ichiba, is a core part of its extensive range of services. Beyond e-commerce, Rakuten’s influence extends into sectors like marketing, communications, energy, and investment. With diverse offerings such as Rakuten Fashion, Rakuten Books, Rakuten 24, and Rakuten Fast Delivery Mart, Rakuten has made a significant global impact. Strategic partnerships, like those with Seiyu GK and BIC CAMERA INC, have strengthened their presence in online grocery and electronics commerce. Furthermore, Rakuten’s ventures into fintech, digital marketing, and AI-powered solutions underscore its commitment to innovation and global growth.
Rakuten's Market Position in Key Countries
Rakuten has established a formidable presence in several key markets, each presenting unique opportunities and challenges. This section highlights Rakuten’s strategies and impact in Japan, South Korea, and Southeast Asia.
Japan
In Japan, Rakuten stands as a dominant player in the e-commerce and digital services market. Rakuten Ichiba, the company’s flagship e-commerce platform, holds a substantial 28.9% market share, making it the largest e-commerce marketplace in Japan. With over 111 million membership IDs in a country with a population of 126 million, Rakuten boasts an impressive customer base. The company’s ecosystem is diverse, operating over 70 businesses that cover various sectors including e-commerce, digital content, fintech, and communications. Rakuten’s brand recognition is unmatched, being a household name known and trusted by virtually every Japanese consumer. This strong market position not only underscores Rakuten’s influence in Japan but also highlights its potential as a gateway for international brands looking to enter one of the world’s most lucrative e-commerce markets.
South Korea
While Rakuten does not have a significant direct presence in South Korea’s e-commerce or digital services market, the company has strategically entered the telecom sector. In May 2024, Rakuten announced a partnership with Stage X, South Korea’s newest mobile network operator. Through this collaboration, Rakuten Mobile, which has been operating in Japan since 2020, will share its expertise in mobile network services. Additionally, Rakuten Symphony, a cloud-based mobile service provider, will offer its solutions to Stage X, potentially opening up opportunities for companies to access advanced telecom technologies in South Korea. This partnership focuses on 5G services in the 28 GHz spectrum, with plans to expand to mid-band frequency and even 6G technology in the long term. This positions Rakuten as a potential gateway for leveraging advanced mobile technologies in the Korean market, although its influence is still developing, and the success of this collaboration remains to be seen.
Southeast Asia
Rakuten’s presence in Southeast Asia is characterized by strategic investments and partnerships rather than direct market dominance. Through its venture capital arm, Rakuten Capital, the company has invested in several Southeast Asian enterprises, including Carousell, a Singapore-based online marketplace, and GoTo, an Indonesian tech giant formed from the merger of Gojek and Tokopedia. Additionally, Rakuten has partnered with local companies, such as Axiata Digital in Malaysia, to launch a digital advertising company. These investments and partnerships provide Rakuten with a foothold in the region, offering access to capital, cross-border e-commerce expertise, and technology transfer. While Rakuten’s influence in Southeast Asia is not as strong as in Japan, its strategic moves demonstrate a commitment to expanding its reach and leveraging local partnerships to navigate the diverse and rapidly growing e-commerce markets in the region.
Rakuten’s strategic moves in Japan, South Korea, and Southeast Asia underscore its commitment to a strong global presence. These efforts are driving e-commerce growth and enhancing its online marketplace offerings worldwide.
Importance of Rakuten for International Expansion
Rakuten’s commitment to international growth is evident through its support for local merchants and niche producers worldwide. The launch of Rakuten Ichiba in 1997 was a breakthrough for small and medium enterprises, opening global markets for them. Strategic moves like the acquisition of LinkShare Corporation in 2005 established Rakuten Global as a major e-commerce player. The introduction of Rakuten Points in 2002 and the “Rakuten Ecosystem” in 2006 further deepened merchant engagement and encouraged users to explore various group services. These initiatives highlight Rakuten’s dedication to facilitating smooth international expansion for businesses. Expanding into Taiwan in 2008 and acquiring Kobo Inc. in 2012 broadened Rakuten’s offerings and enhanced its global footprint, making it a crucial partner for businesses looking to go global.
Establishing Presence via Rakuten in Different Markets
Rakuten has significantly impacted various regions by leveraging its e-commerce strategies to drive growth and engage customers. This section explains how businesses can utilize Rakuten’s platforms and partnerships to establish or expand their presence in Japan, South Korea, and Southeast Asia.
Japan
Entering the Japanese market via Rakuten offers significant opportunities for international companies. Rakuten Ichiba allows businesses to open a shop directly from overseas without needing to establish a legal entity in Japan. Rakuten provides comprehensive support through bilingual e-commerce consultants (ECCs) to help merchants maximize their potential on the platform. Merchants have full control over their storefronts and product pages, enabling brand differentiation. Participating in Rakuten’s popular shopping events and campaigns can significantly boost sales and visibility. Additionally, leveraging Rakuten’s loyalty program, Rakuten Points, helps attract and retain customers. Merchants can also drop-ship directly from overseas warehouses to Japanese customers, with Rakuten offering support to overcome language barriers and adapt to Japanese market preferences. This comprehensive support system makes Rakuten an ideal platform for foreign brands to establish credibility and thrive in Japan’s lucrative e-commerce market.
South Korea
Rakuten’s partnership with Stage X offers potential opportunities for companies to establish themselves in the South Korean market. Companies could partner with or utilize services offered by Stage X, backed by Rakuten’s expertise, to enter the Korean mobile market or develop mobile-based services. Stage X plans to launch both B2B and B2C services, initially focusing on organizations like universities, airports, and hospitals, providing entry points for businesses. Leveraging the 5G services in the 28 GHz spectrum developed with Rakuten’s support, companies can create innovative products or services for the Korean market. Furthermore, with Rakuten and Stage X looking ahead to 6G technology, companies can position themselves for future technological advancements. While this partnership opens up potential opportunities, Rakuten’s influence in South Korea is still developing, and companies should carefully evaluate the risks and opportunities when considering using Rakuten as a means to enter or expand in the South Korean market.
Southeast Asia
Establishing a presence in Southeast Asia via Rakuten involves leveraging its strategic investments and partnerships. Companies looking to expand in the region could seek investment from Rakuten Capital, gaining not only funding but also access to Rakuten’s expertise and technologies. Exploring partnerships with Rakuten’s existing network in Southeast Asia can provide market entry or expansion opportunities. Utilizing Rakuten’s e-commerce, fintech, or mobile technologies can enhance offerings in Southeast Asian markets. Rakuten’s experience in cross-border e-commerce can help companies navigate the complexities of selling into or out of Southeast Asia. Additionally, companies can explore integration with Rakuten’s services or platforms present in Southeast Asia to enhance their market presence. Although Rakuten’s influence in Southeast Asia is not as extensive as in Japan, its strategic investments and partnerships offer valuable opportunities for businesses looking to establish themselves in the region.
Rakuten's Global Expansion Strategy
Rakuten’s global expansion strategy includes strategic acquisitions, partnerships, and establishing local platforms. These efforts are crucial for Rakuten’s continued international growth. By partnering with top sports brands like FC Barcelona and the Golden State Warriors, Rakuten enhances its global brand. Their sports branding extends beyond local teams to a global audience. The acquisition of Ebates was a key move for Rakuten in the US market. They also launched Rakuten TV in 40 countries by April 2019 and partnered with Walmart in the US, showcasing their commitment to global growth. The Global Marketing & Digital Strategy Department, with employees across Japan, Singapore, the US, and Europe, drives this growth. Rakuten employs over 32,000 people across 29 global hubs, highlighting their extensive reach. They are committed to sustainability, supporting many Sustainable Development Goals and the United Nations Global Compact, including aiming for net-zero Scope 1 & 2 emissions and using only renewable energy. These efforts underscore their strong environmental strategy alongside their e-commerce plans.
Future Outlook and Challenges
Looking ahead, Rakuten faces significant market challenges within the dynamic global e-commerce landscape. The company must balance its drive for innovation with the need for sustainability and consumer satisfaction. This includes venturing into areas such as cryptocurrency and 5G networks. Rakuten Mobile, a cornerstone of their strategy, has achieved over six million mobile carrier subscriptions, with revenues reaching 224.9 billion yen in 2023, representing a 17.7% increase from the previous year. However, the operating loss for Rakuten Mobile was substantial at 322.5 billion yen, showing an improvement from the 460 billion yen loss in 2022. The ambition to expand its market share in Japan’s mobile market is ambitious for Rakuten. With nearly 6.1 million subscribers by December 2023, the goal is to reach between 8 million and 10 million subscribers by year’s end. This would still place them behind NTT Docomo’s 90 million mobile customers, underscoring the competitive landscape. Outside of Rakuten Mobile, the broader Rakuten Group shows robust growth. It has issued over 30 million Rakuten Cards, amassed more than 14 million customer accounts at Rakuten Bank, and exceeded 10 million general securities accounts with Rakuten Securities. The global membership of the Rakuten Group is projected to swell to 1.8 billion, with a forecasted global gross transaction volume of 40 trillion yen. The successful shift to Phase 3 of Rakuten’s strategy in 2024 is pivotal for future profitability. The aim is to leverage other profitable divisions for financial stability. Yet, the future holds both promise and uncertainty, challenging Rakuten to lead in e-commerce trends while navigating complex market dynamics.
Conclusion
Rakuten’s journey from a Japanese e-commerce startup to a global leader in technology and digital services showcases its strategic growth and market impact. The alliance with Mizuho Securities aims to provide comprehensive asset management consulting services, highlighting promising future growth and innovation. Additionally, the upcoming stock listing of Rakuten Securities signals continued expansion and development.
Operating in 30 countries and regions, Rakuten covers a broad spectrum of sectors, including e-commerce, fintech, and digital content. Its ecosystem, comprising over 70 businesses and the Rakuten Point system, fosters strong engagement and loyalty among its global membership of 1.8 billion. The company’s gross transaction value (GTV) is steadily increasing, underscoring its leadership in the e-commerce sector.
Rakuten is committed to operational excellence, innovation, and maintaining a diverse corporate culture as it navigates the future of online shopping. Investments in AI solutions, led by the Rakuten Institute of Technology, demonstrate its forward-thinking approach. Under the visionary leadership of Hiroshi Mikitani, Rakuten is poised to overcome challenges and seize emerging opportunities, solidifying its position at the forefront of the e-commerce industry.
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