Retail

Rakuten Reveals Its Plan To Take On Amazon

Rakuten Pulls Back

Japanese eCommerce firm Rakuten is thinking big these days, according to recent reports, sharing ambitious goals of taking on wireless technology provider SoftBank by launching a cutting-edge wireless network and winning back market share from the ever-encroaching Amazon.com.

The mobile wireless network will tie the company’s portfolio of approximately 80 disparate services together, chief operating officer Kentaro Hyakuno said in an interview. Consolidating those pieces will offer consumers the convenience of several services under a single banner — including shopping, travel arrangement and bill pay — a move made to attract new customers and encourage its 90 million current users to spend more on the Rakuten platform.

Thought a powerful player since its launch by CEO Hiroshi Mikitani more than 20 years ago, the company has since lost ground to Amazon and increasingly relied on credit cards, online banking and other financial services for growth. The wireless operator line is a new arena for the firm, but Rakuten is betting on the venture as a launching point for a platform to offer a slate of goods that will be difficult for competitors to match.

“The idea is not to try to win with any particular service alone, but rather by combining them together,” Hyakuno said. “It’s OK to be number two if your combined lifetime customer value is higher than that of your competitors.”

Rakuten will focus on three areas in the next two to four years, he added, including expanding its mobile payment business, improving logistics for eCommerce customers and building a wireless carrier.

It has been a difficult path toward progress, however. Rakuten’s stock is down nearly 30 percent since December 2017, when the company announced plans to spend as much as 600 billion yen over the next decade to become a wireless carrier. The firm has maintained that being a later entrant has saved a lot of costs, though, and that its lack of legacy infrastructure is a positive.

Rakuten plans to reveal more details about its wireless network architecture within the next few months, according to Hyakuno.

“The goal is very simple,” he said. “How do we build the most disruptive network not just in Japan, but in the world?”

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