Rakuten grows into a global e-commerce leader

7 years ago by in Featured, Technology

The story of Rakuten, Japan’s biggest e-commerce site is the story of the first Japanese Internet company that works steadily to become an international player.

Rakuten is a rare company in Japan and one example is that it requires all its employees, from Japan and abroad, to speak English. It is the only way it can make integration of acquired companies work, as it has been on a shopping spree in the last few years.

It bought e-reader company Kobo for $315 million, U.S.-based Buy.com for $250 million and U.K.’s Play.com for $38 million.

Rakuten, a portal that allows small businesses to sell their products and attract new clients, has one tiny, but essential difference in its working model compared to the rival giant Amazon. If Amazon emphasizes the product, Rakuten focuses on the seller and its image, according to a Business Insider analysis.

The Japanese model seems to work well, as Rakuten’s revenues last year were up 9.8 percent to $4.6 billion, and the Internet revenues share was $2.8 billion. Its market value is about $13 billion.

The big challenge for CEO Hiroshi Mikitani is however making the model work outside Japan. Rakuten is earning only 10 percent of its revenues from abroad. It has strived in the last two years to expand in the U.S. and it still sees big opportunities there, as it thinks that U.S. small firms still have not figured out a good way to be present on the Internet.