Rakuten’s Non-traditional Business Model

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Hiroshi Mikitani, CEO and chairman of Rakuten gave the keynote address at the official beginning of the Internet Retailer Conference in Chicago on June 5 where he announced that Rakuten acquired Webgistix.

During his address, he told attendees the ecommerce market share trend in Japan is steadily widening against competitors.

“Internet shopping is about stories and there are so many fans,” said Mikitani.  “We empower our merchants with the social network, we provide social network tools to our merchants and how they can use it effectively.”

He said in 2008, the company focused on the developing the Japanese market.  Their thinking, he said, was building a dependable building model in Japan.

“We are in more than 10 countries with our marketplace model,” Mikitani told attendees.

Rakuten, Mikitani said, is re-writing the rules of ecommerce.  They have created a very different business model.

“This is about shopping customer appreciation and retention,” said Mikitani.

Rakuten’s ecommerce model is about connecting with merchants.  There are many marketplaces, even though you join their program you are disconnected, he said.

“We will let you get connected with our customers,” said Mikitani.  “Our main player is our merchants.”

Rakuten provides data to merchants, where the sales come from and they provide the tools like email and social media to make this happen.  Smart device adoption is happening in Japan, he said 70% of transactions will eventually happen through smart devices.

Rakuten has have created ecommerce consultant jobs, who will actively tell merchants how to control their page and inventory.

“You are not buying from the computer screen, you are buying from the people behind the screen,” Mikitani told attendees at the conference.

Mikitani said they are making different devices and are expanding the digital business.  They bought the ebook Kobo and they are entering the digital video streaming business as well.

“We are doing many other businesses in order to help our merchants to defend their business,” said Mikitani.

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