Rakuten Online Shopping Power House

Rakuten Office Tower

I often look for new yukata (summer kimono) every so often since I regularly practice and perform in a Japanese traditional dance group called Yume-mirai, and had stumbled upon Rakuten. I quickly learned that Rakuten is the largest online shopping mall in Japan, earning a revenue of over $13 billion annually, collaborating with over 28,000 local retailers to cater to its 47 million users.

Rakuten is a lot like Amazon, except retailers can set up their own shops within Rakuten and sell from a wide range of products from clothes to cleaning products. The end result is a 100 million plus inventory of products at the fingertips of users, in which they can virtually ship anywhere, any time around the world. From $5 to $100,000, there’s a price point for everyone.

The site is English-enabled thanks to the growing sophistication of Google Translate, but registered members will have hard time navigating and editing their profiles.

Fashion

It’s well-known that the Japanese have a fetish for luxury goods and sure enough, brands like Hermès, Chanel and Louis Vuitton are sold on hundreds of pages, many of which are used. What’s particular about shopping online with Japanese operated sites is the transparency retailers have with their consumers about used products. This has been evident on my browsing upon a vintage kimono site called Yamatoku, where there are dozens of pictures depicting the qualities and flaws of each garment such as stains, holes and pigment migration.

Rakuten keeps to this standard by also identifying products with flaws, which are graded from New and unused to Need Repair, and are priced accordingly. It was necessary for Japanese retailers to be upfront about flaws of their products as Japanese consumers are notoriously choosy about their luxury goods. A single thread out of place in a dress will be sent back and a sale will be lost. It’s also encoded into their honor system of being honest and truthful to consumers, something that is lacking in North America and Europe.

This example above of a Louis Vuitton traditional Speedy handbag, at a normal retail price of $690, is selling for $350 due to extensive use, with visible rust on  the hardware, and discoloration of the handles. The same bag can be found by another retailer at a higher pricing but with a better grade. This type of transparency with products can win over the the trust of consumers, once you have their trust, you can expect them to come back.

It’s clear that this site may not be for everyone, most products on the site are sold to a Japanese audience, hence probably why most North Americans and Europeans are unaware of this company . However, we shouldn’t disregard Rakuten’s purchasing power and influence. Recently, Rakuten had purchased France’s PriceMinister and US’ Buy.com, and is in talks in producing another online shopping mall in China with Baidu. Indeed, Rakuten is so powerful that it even has it’s own bank and baseball team.

As more people find less reason to shop outside the comfort of their homes, and online spending will grow (said to be 10% a year in the next five years), it’s undeniable that at some point there will be online malls to cater to every whim and desire of the consumer. Whether they are in Zimbabwe or in Brazil, Rakuten is foreseeing this trend, and has already established itself as a major player in this billowing market.

Image credits: Ginkura