advertisement
advertisement

Japan’s Rakuten Prepares To Enter The U.S.—And Amazon Prepares To Greet Them

Written by Evan Schuman
June 5th, 2013

The CEO of Rakuten, the $4.7 billion global retailer (although it’s preparing to be in 27 countries, the bulk of its current revenue is in its native Japan), used his keynote speech at the Internet Retailer (IRCE) show in Chicago on Wednesday (June 5) to make a pitch to American E-commerce companies to join Rakuten and sell through his site. The not-so-subtle subtext: Amazon (NASDAQ:AMZN), we’re coming for you.

Rakuten wouldn’t be the first to make such a move, but its results in other countries coupled with its non-traditional way of working with retailer gives it a fighting chance of making a difference. Although we’ll touch on the advantages and challenges Rakuten will have, one thing is clear: Rakuten and Amazon’s approaches are 180 degrees different. For starters—and this will get the attention of the Jakob Nielsen devotees among the Web designer crowd—Rakuten wants long initial Web pages with lots of video, opting for the “scrolling is better than clicking” school of thought.

From Rakuten’s perspective, its model is the anti-Amazon. In E-commerce today, said CEO Hiroshi Mikitani, “your friends can become your enemies and your enemies can become your friends.”

Instead of having a marketplace for retailers to fill in the gaps of its product offerings, Rakuten’s products consist solely of what the marketplace offers. Therefore, there’s theoretically no possibility of competing against the, if you will, landlord.

Amazon Marketplace retailers have often complained that the situation for them is much worse, in that Amazon will not only let Marketplace sellers access smaller niche markets, but if that category starts to sell well, Amazon has sometimes chosen to take back that category and sell directly. In effect, Amazon has used Marketplace to do market research about categories it may want to enter.

This difference lets Rakuten put its retail partners out front, promoting their brands and their personal areas. Rakuten will also provide tools and counseling as to how it suggests pages look. That brings us to another key difference between the two: Amazon is utilitarian, fast and efficient, an ideal site for a time-crunched American who knows that they need to replace the toaster oven that just caught on fire. The shopper knows what they want and prefers a site that gets the purchase done as quickly and painlessly as possible.

Rakuten’s philosophy is the opposite.


advertisement

Comments are closed.

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

StorefrontBacktalk
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.