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Rakuten

Traded as	JASDAQ: 4755
Industry	Online retailing, Internet
Founded	February 7, 1997
Founder(s)	Hiroshi Mikitani
Headquarters	Tokyo, Japan
Area served	Japan
Key people	Hiroshi Mikitani (Chairman and CEO)
Revenue	$4.94 billion (2011)[1]
Net income	-$14.8 million (2011)[1]
Employees	9,311 (2012/12)[2]
Website	rakuten.co.jp global.rakuten.com/group/

Hiroshi Mikitani, founder and CEO of Rakuten, at the press conference about the e-G8 forum during the 37th G8 summit in Deauville, France. (26 May 2011)

Rakuten, Inc. (楽天株式会社, Rakuten Kabushiki-kaisha^?) (JASDAQ: 4755) is a Japanese electronic commerce and Internet company based in Tokyo, Japan. Among its numerous online properties, its flagship B2B2C e-commerce platform Rakuten Ichiba is the largest e-commerce site in Japan and among the world’s largest by sales. Whereas other marketplaces may compete directly with their sellers, Rakuten seeks to empower merchants in delivering "Omotenashi" - a Japanese attitude of hospitality and customer service - intended to help sellers create lasting relationships with consumers.^[3] The Japanese word rakuten means optimism.^[4]

Founded in February 1997 as MDM, Inc., Rakuten Shopping Mall (楽天市場, Rakuten Ichiba^?) started operations in May the same year; in June 1999, the company changed its name to Rakuten, Inc. In 2011, the company's revenues totaled US$ 4.7 billion with operating profits of about US$886 million, suggesting an 18.8% operating profit margin. In December 2011, the Rakuten group (JASDAQ: 4755) had a market capitalization of US$13 billion and about 10,000 employees worldwide. Rakuten ranks amongst the top 10 Internet companies in the world by market cap (along with Google, Amazon, eBay, Baidu, Yahoo, etc.)

Headquartered in the Shinagawa Seaside Rakuten Tower (品川シーサイド楽天タワー, Shinagawa Shīsaido Rakuten Tawā^?) in Higashi Shinagawa, Tokyo^[5][6] and led by founder, chairman and chief executive Hiroshi Mikitani, Rakuten started expanding outside Japan from 2005, mainly through takeovers and joint ventures.^[7] Its global presence has been reinforced through the acquisition of other online retailers such as Buy.com (now Rakuten.com Shopping in the US), Priceminister (France), Ikeda (now Rakuten Brasil), Tradoria (now Rakuten Deutschland), Play.com (UK), and Wuaki.tv (Spain) as well as through investments in Pinterest, Ozon.ru, AHA Life, and Daily Grommet.

Lines of business [edit]

The Rakuten Group consists in total of around forty businesses & services such as -

1. Online retail: Operation in a number of countries outside Japan;
2. Banking, Credit and Payments: Offering personal consumer credit services including card loans, mortgages, and other banking services;
3. Portal and Media: Managing portal sites acting as gateways to the internet, and performing other activities;
4. Travel: Operating hotel booking and other travel-related websites and providing other services;
5. Securities: Providing services such as online securities brokerage;
6. Professional Sports: Managing a professional baseball team, planning and selling related merchandise and performing other activities;
7. Entertainment: Online video club.

The group's 2010 annual report shows that its online shopping business, Rakuten Ichiba, was Japan's largest online shopping mall, offering customers more than 95 million products from about 40,000 merchants.^[8][9] It also had 6 million credit card customers and more than 75 million users in Japan.^[9] As part of the group's globalization initiative, Rakuten Ichiba started offering international shipping.

Developments [edit]

In October 2005, Rakuten bought a 15% stake in Tokyo Broadcasting System, raising its stake in the broadcaster to 19%.^[10] Rakuten later withdrew its bid and sold its shareholding back to Tokyo Broadcasting.^[11][12]

Global expansion [edit]

2005 Rakuten bought New York City-based Linkshare - since rebranded "Rakuten Linkshare" - offering performance-based online sales and marketing programs.^{[13][14][15][16]}

2006 Rakuten spent $425 million^[17] on LinkShare, an affiliate-shopping network.

2010 To increase its global competitiveness, Rakuten decided to adopt English as the company’s official language from mid-2012.^[18][19] That year, Rakuten also bought French online retailer Priceminister for €200 million^[20] and US-based Buy.com for US$250 million.^[21][22] The group had been a significant shareholder in Ctrip, a Chinese travel site until it sold its stake in the company in August 2007 and, in 2010, it announced a joint venture with Baidu in China (Lekutian).^[23][24]

2011 After launching Indonesia's Rakuten Belanja Online, a joint venture in June the group continued its global growth the same month, snapping up Brazilian e-commerce firm Ikeda - since,renamed Rakuten Brazil. In July, it bought German e-commerce start-up Tradoria and rebranded it Rakuten Deutschland, and in September UK online retailer and e-commerce marketplace Play.com for £25 million (almost $41 million). After a 2010 UK government decision to impose Value Added Tax on UK-based companies' sales from the Channel Islands - until then exempt from the tax on shipments of goods worth less than £18 (about $28)^[25] - Rakuten closed one of three Play.com warehouses on the island of Guernsey.^[26] In September, Rakuten took a minority equity stake in Russian online retailer Ozon.ru,dubbed 'Russia's Amazon', which had reported 2010 sales worth US$137 million.^[27] A four-company-strong consortium, led by the Japanese group, invested US$100 million. Rakuten's stake was not revealed.^[28]

2012 Rakuten bought Canadian e-book reader company Kobo in January.^[29][30] - a deal not finalized until January 2012.^[31] On 17 May, Rakuten announced that it was leading consortium investing $100 million in the Pinterest picture sharing social network - its partners were existing investors Andreessen Horowitz, Bessemer Venture Partners, and FirstMark Capital, and a number of investment 'angels'. That investment marked the start of a drive to expand Pinterest's presence in Japan and Rakuten’s 17 other global markets. “While some may see e-commerce as a straightforward vending machine-like experience, we believe it is a living process where both retailers and consumers can communicate, discover, and curate to make the experience more entertaining," said Hiroshi Mikitani, Rakuten chief executive.^[32] On 13 June, Rakuten bought Wuaki.tv, a Spanish (Barcelona, Catalunya) video on demand (VOD) service/company with more than 250.000 users and 30 employees. That opened new opportunities, challenging directly Amazon, Netflix and others for domination of the VOD market - at first, in Europe and, later, elsewhere.^[33] In November, Rakuten bought French online retail delivery company Alpha Direct Services. "Speed and quality of delivery is at the heart of any solid e-commerce proposition," said the Japanese group's Hiroshi Mikitani.^[34]

By late 2012, Rakuten had also moved into online retail in Austria, Canada, Spain, Taiwan and Thailand and into the online travel markets in France - with Voyager Moins Cher.com - and China, Hong Kong, Korea and Taiwan - with its Tokyo-based international Rakuten Travel platform. In North America, Rakuten Golf made booking tee time online possible.^[35]

Selected subsidiaries [edit]

(source Rakuten Inc.^[36])

• Alpha Direct Services (ADS)
• Aquafadas
• AIRIO Life Insurance Co., Ltd.
• Dot Commodity, Inc.
• Fusion Communications Corp.
• Keiba Mall, Inc.
• Kenko.com. Inc.
• Kobo Inc.
• Net's Partners, Inc.
• O-net, Inc.
• Play.com
• Priceminister
• PT.Rakuten-MNC
• Rakuten Auction Inc.
• Rakuten Austria GmbH
• Rakuten Baseball, Inc.
• Rakuten Bank, Ltd.
• Rakuten Brasil Internet Service Ltda.
• Rakuten Bus Services Inc.
• Rakuten Card Co., Ltd
• Rakuten Deutschland GmbH
• Rakuten Edy, Inc.
• Rakuten EMOBILE, Inc.
• Rakuten Enterprise Inc.
• Rakuten Insurance Planning Co., Ltd.
• Rakuten Investment Management, Inc.
• Rakuten LinkShare (formerly LinkShare Corporation)
• Rakuten Logistics, Inc.
• Rakuten Loyalty (formerly FreeCause)^[37]
• Rakuten Malaysia Sdn. Bhd.
• Rakuten Mortgage, Inc.
• Rakuten Research, Inc.
• Rakuten Securities, Inc.
• Rakuten Shashinkan, Inc.
• Rakuten.com Shopping (formerly Buy.com)
• Rakuten ShowTime, Inc. (Japan)^[38]
• Rakuten Travel, Inc.
• Shareee, Inc.
• Signature Japan Co., Ltd.
• Taiwan Rakuten Ichiba, Inc.
• TARAD Dot Com Co., Ltd.
• TicketStar Inc.
• Wuaki.tv

See also [edit]

• Vissel Kobe
• Tohoku Rakuten Golden Eagles
• Japan Open Tennis Championships
• Rakuten Institute of Technology
• Yukihiro Matsumoto

References [edit]

Further reading [edit]

• "Stepping out: New Japan v old Japan", The Economist, June 23, 2011

External links [edit]

• Rakuten Ichiba (Japanese)
• Taiwan Rakuten Ichiba (Chinese)
• Rakuten Germany (German)
• Rakuten company info
• Indonesian Rakuten review
• Rakuten.co.id: Toko online murah, serba ada Barang unik Jepang (Indonesian)