Rakuten: An Internet Giant

Rakuten, the Japanese giant e-commerce platform and the world's third largest e-commerce company by revenue (US$ 4.94 billion in 2011), is expanding beyond its traditional Japanese borders faster than ever.

Founded in 1997 (older than Google) by Hiroshi Mikitani, its flagship e-commerce website Rakuten Ichiba utilizes a business to business to consumer (B2B2C) model, whereby merchants create online shops on the marketplace and sell directly to their customers. Today, shoppers can browse over 95 Millions of products from more than 40 000 virtual shops.

Heading to the Western World

In the past two years, the company has closed an impressive figure of 10 deals, making several acquisitions such as the French e-commerce site Priceminister for €200 million, US-based Buy.com for US$ 250 million and UK e-commerce Play.com for £25 million, Brazilian e-commerce company Ikeda, and the e-commerce startup Tradoria in Germany.

But the company hasn’t stop yet, as on Thursday, 14^th of June, the Japanese firm has just bought the Spanish online video platform called Wuaki.tv. As the Spanish firm is operating in a very different field than the e-commerce, it may be surprising at first but as explained by Rakuten’s CEO Hiroshi Mikitani:

 “The Wuaki.tv management team and technology are both very strong, as is the number and strength of its relationships across the video and hardware industries. We saw synergies in the ambition of both businesses to expand internationally while video on demand extends our digital goods offering”

Beside these acquisitions, Rakuten has also made some strategic investments in startups, investing US$ 100 million in Pinterest last May and purchased a minority equity stake in Russian online platform Ozon.ru in last September. Moreover, the company is also looking for new growth opportunities in new markets and has bought the Canadian company Kobo, which produced the Kobo e-reader, in November 2011.

Keeping a Foot in South East Asia

The company is not only looking in Europe and the USA to expand, but also taking in consideration the huge potential of some countries in Asia such has Malaysia and Indonesia where the company has respectively launched Rakuten Online Shopping and Best Denki Indonesia. Both of these new services will be run under their in-house B2B2C selling platform.

Going to globalization

In 2010, in order to transform the Japanese company to an international one, Rakuten has announced its wish to make English the company’s official language by 2012. As the day of today, we don’t know if this goal was reach or not as no announcement has been made recently to confirm the success of this operation.

According to an Interview made by CNN in February 2011, Hiroshi Mikitani explained that some boards have been displayed within the Rakuten’s offices asking employees to speak English as much as possible each Friday even if most of them are Japanese.

After being asked to explain this specification, Hiroshi Mikitani said that, as the company is going to the global stage, they will face more global players which of course they need to compete against them, in this situation talking English for all employees is a part of the strategy.

Acquisitions and Investments made by Rakuten since 2010

• January 2010      bitWallet, Inc. is consolidated as a subsidiary of Rakuten, Inc.
• July 2010            Acquisition of Buy.com for US$ 250 million 
•                            Acquisition of Priceminister for €200 million
• June 2011           Rakuten acquired the Brazilian firm Ikeda (Rakuten Brazil)
• July 2011            Acquisition of startup Tradoria in Germany (Rakuten Deutschland)
• Sept. 2011          Rakuten purchased a stake in the website Ozon.ru
• October 2011      Purchase of UK e-commerce Play.com for £25 million.
• Nov. 2011           Rakuten agreed to purchase the Canadian ebook Kobo.
• May 2012            Investment of US$ 100 million in Pinterest.com
• June 2012           Acquisition of the Spanish video platform Wuaki.tv

As the pace of acquisitions has increased in the past months, we could expect some news coming from the Rakuten headquarters and this could lead to an even bigger internet player from the Rakuten we know today.