As someone who is interested in pretty much all parts of the commercial world, as well as travel. My recent encounter has been with the Japanese store “楽天” (more about the name later). By understanding their operations not only in the organic food industry, but with toddler goods as well as any other interesting products, I am able to analyze the commercial world in a better way. Looking for business solutions that can benefit the world as a whole. This is my study to the world of online commerce in the land of the rising sun. So do read on to get to know more!
Rakuten, Inc. is a Japanese internet and e-commerce company headquartered in Tokyo, Japan. The word ‘rakuten’ means optimism in Japanese. Rakuten Ichiba is its business-to-business-to-consumer e-commerce subsidiary. It is the biggest e-commerce company in Japan and one of the biggest in the world in terms of sales.
The Rakuten Group is made up of nearly 40 services and businesses, including online retail; media and portal; credit, banking, and payments; securities and brokerage; travel; entertainment; and professional sports management.
The local website is originally available only in Japanese, but due to their global expansion English language support has increased. While Rakuten Japan is currently redirecting it’s international customer base to their global version of the website, there are ways to access parts of the native Japanese e-commerce store in English. See the attached link for more informative guidance.
History of Rakuten, Inc.
Founded as MDM, Inc., in 1997 Feb, by Hiroshi Mikitani. He remains as the chief executive to this day. The name of the company was changed in June 1999.
The total revenues of the company in 2012 was $4.6 billion, with around $244 million as operating profits. As of May 2015, the company reported sales of $5.66 billion and had a market cap of $24.7 billion. As of June 2013, the total number of worldwide employees at the company was 10,351.
The company started its overseas expansion operations in 2005, primarily via joint ventures and acquisitions. Some of its major acquisitions include Buy.com in the US which is now the shopping site Rakuten.com; Play.com in the UK; Ikeda, currently Rakuten, in Brazil; Spain’s Wuaki.tv; Priceminister in France; Kobo Inc. in Canada; and Tradoria which is now called Rakuten Deutschland.
Rakuten Ichiba or “Shopping Mall”, began operations in May 1995. It started as a company that offered virtual space for brick and mortar sellers to set up virtual shops at their website and sell their products online. The company does not provide warehousing. Initially, they did not sell any products on the site, but later started stocking its own goods and delivering it directly to customers. It also has its own e-bay like auction service, which is the third biggest in Japan.
Products and items worth anywhere between $1 and $100,000 are available for purchase at the “Ichiba” store. Customers can buy Gucci handbags, 4-ton trucks, and digital content, as well as fruits directly sold by local farmers. It can thus be categorized as a site that incorporates many e-commerce business models.
As per the 2010 annual report of the group, Rakuten Ichiba had nearly 40,000 merchants who offered over 95 million different products; over 75 million Japanese users; and nearly 9 million customers who used credit cards. Expansion of the company resulted in international shipments of products. By the end of 2013, e-tailers from the US could directly sell on the online marketplace without having a local Japanese bank account, address, or entity.
Our personal favorite has been the abundance of the worlds cutest kids and children’s clothing available. For example the “Teddy Shop” has become a very popular collection of such items.
How does Rakuten Ichiba make money?
Rakuten charges a fixed fee from the merchants who set up their virtual shops on the site. This fee is charged up front which assists the company in maintaining a positive flow of cash. The company also charges commission payments, i.e., a small percentage of the sales revenue, from each merchant/e-tailer. The commission is known to vary depending on the type of items being sold, for example toddler goods or organic food products. Other sources of revenue include lead generation, display of advertisements, and third-party promotion campaigns, etc.
In addition to the virtual space, the website also offers additional services such as a merchant-only monthly magazines, real-world seminars, and phone support, etc. Members can avail of the ‘Super Points’ reward program. Foreign services of the e-commerce giant, like US-based Rakuten.com, etc., monetize in a different manner.