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.


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