Together into our tech future: Rakuten CEO Mickey Mikitani on digital Japan and ecosystem synergy
3 days ago
“Japan still lags behind Europe and North America in this regard. I believe this gap will continue to shrink,” he predicted. “Online shopping as a share of overall retail could increase from the current 7-8% to 15%, 20%, even 25%.”
“Over the last three years, GMS (gross merchandise sales) on Rakuten Ichiba have grown,” Mikitani reported. “We reached five trillion yen in domestic e-commerce GMS last year. We now have over 36 million monthly active users in Japan using at least one service, and we will soon reach 40 million.”
One major driver of new users has been Rakuten’s fintech businesses; namely, payment services such as Rakuten Pay and Rakuten Card.
“The synergy between our financial services and e-commerce has been particularly significant. The retail share of online shopping in Japan is still just 7-8%, meaning that over 90% of retail is still physical,” he reasoned. “By covering this space through our credit card, payments and bank services, many consumers are basically doing all of their shopping through Rakuten.”
As Japan goes increasingly cashless, more and more customers are engaging with the Rakuten Ecosystem for the very first time through services like Rakuten Pay. The service is helping Rakuten overcome a crucial hurdle of customer acquisition that many online businesses face: the jump from offline to online.
“I believe that online-merges-with-offline (OMO) marketing will be extremely important going forward,” Mikitani stressed. “We are trying to make the Rakuten ID into something like a lifestyle ID.”
This lifestyle ID concept can already be found in the wild: Mikitani related his recurring experience meeting customers who simultaneously shop on Rakuten Ichiba, use a Rakuten credit card, hold a Rakuten Bank account, subscribe to Rakuten Mobile and even have a Rakuten home loan.
“With Rakuten involved in every aspect of a customer’s lifestyle like this, we become their first choice,” he explained. “If they go traveling, they’ll book through Rakuten Travel, which commands a 20% share of accommodation reservations in Japan. We’re on our way to issuing nearly 30 million Rakuten Cards, and have 12 million Rakuten Bank accounts now. Meanwhile, Rakuten Securities is one of Japan’s largest (online) securities brokers, in terms of the number of accounts.”
In fact, of the 36 million monthly active users in Japan, Mikitani revealed that around 75% were using multiple Rakuten services, while customers active on both Rakuten Travel and Rakuten Ichiba had increased by over 50% since the previous year.
“This is Rakuten’s strength: not just shopping, but a combination of many different services.”
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