Ecommerce Ventures into a New Phase
TOKYO: Japan’s biggest ecommerce platform, Rakuten, has claimed that online retail is entering a new phase as the technology that is available to companies in this sector is sophistically growing. Hiroshi Mikitani launched Rakuten in mid-1997, and has since developed it into one of the world’s largest digital retail sites.
“Up until now, internet shopping was about the process”, the head of Rakuten said. “How do you make your checkout process efficient? How do you make your delivery smooth and fast? How do you buy things cheaply?”
But, he added, “Shopping should be a more rich experience”, a characteristic which is lacking from the “vending machine” approach of rivals like Amazon”.
Rakuten, by contrast, operates as a digital shopping mall, charging vendors to use its platform and encouraging buyers to become online regulars at their favourite stores. “We are a bazaar. We are not a supermarket”, said Mikitani. “We are creating a first-class shopping district instead of being a retailer ourselves”.
Mikitani does not intent to change this format. “We are sticking to this third-party marketplace model instead of just building a gigantic first-party sales model to destroy the businesses of smaller guys”, he declared.
“My point is you don’t need to kill the human factor”, he said. “You can amplify the human factor by using information technology”.
Mikitani described his firm as a “service provider” that delivers goods at lower prices. “Most of the products on Rakuten are cheaper than the products on Amazon”, he claimed. “Because the shops focus on one category, they are very competitive”.
“Maybe we cannot beat Amazon completely, but I think that is the destiny of the company”, he added.
Rakuten is currently gearing up to launch in the US, having recently rebranded the Buy.com site it bought in 2010.