The results are in: Growth outpacing industry benchmarks, fintech expansion and other highlights from Q2 FY2022
On August 10, Rakuten held its 2022 second quarter financial results in Tokyo. Chairman and CEO Mickey Mikitani and leaders from across the Rakuten Group took to the virtual stage for an online presentation to share highlights from the company’s diverse portfolio of more than 70 services worldwide — and to offer a glimpse of what’s to come.
Outpacing industry benchmarks
Rakuten recorded revenue growth in all three segments in the second quarter of 2022: Internet Services, FinTech and Mobile. Consolidated revenue achieved double-digit growth, up 13.5% year-on-year (YoY), reaching a total of 456.5 billion yen. In addition to the growth in domestic e-commerce*1 transaction value due to both sustained user retention since the impact over two years ago of COVID-driven stay-at-home consumption and the recovery in domestic travel demand, the customer base expansion in Rakuten’s fintech services also contributed to the revenue increase.
“As for our key KPIs, we reached 8 trillion yen in Global GTV, an almost 24% increase year-on-year.”Mickey Mikitani, Rakuten Group Chairman and CEO
“Our domestic e-commerce GMS (gross merchandise sales) is doing extremely well, especially considering the fact that many major global e-commerce players in North America and Europe are struggling right now,” shared Mikitani during his presentation. “In contrast, Rakuten was able to grow this key KPI by 12.3% YoY. When compared to pre-pandemic levels, we are now growing about 17% CAGR each year.”
Mikitani continued, “As for our key KPIs, we reached 8 trillion yen in Global GTV, an almost 24% increase year-on-year. Consolidated revenue also grew by 13.5% YoY, and excluding Mobile, our operating income grew by 12.6% YoY for a grand total of 45.2 billion yen — very strong performance overall.”
E-commerce surges in Japan, content business growth overseas
Domestic e-commerce GMS exceeded 1.3 trillion yen, up 12.3% YoY. In particular, Rakuten Ichiba monthly GMS in June 2022 increased by 72.5% compared to pre-pandemic January 2020, and by 80% for online grocery delivery service Rakuten Seiyu Netsuper. Rakuten Travel’s gross transaction value (GTV) increased by 14.0% compared to pre-pandemic Q2 FY2019, outperforming the market and boosted by a recovery in domestic travel demand.
In overseas businesses, due to marketing measures and recovery in consumer behavior, revenue for U.S.-based cashback service Rakuten Rewards was 23.1 billion yen (up 18.1% YoY) in Q2 FY2022 with GMS also growing steadily.
Additionally, the customer bases for Rakuten’s content businesses grew significantly over the previous year*2. In particular, Rakuten TV’s total registered users increased to 58.6 million (up 63.9% YoY), Rakuten Viki’s total registered users increased to 59.6 million (up 32.6% YoY) and Rakuten Viber’s total registered users increased to 1.38 billion (up 7.2% YoY).
The cashless revolution powers ahead
“Rakuten Card Shopping GTV has grown by 28.8% YoY and is on its way to issuing 30 million cards, with 15.5% YoY growth in the number of cards issued,” Mikitani highlighted.
“Rakuten Securities has also surpassed 8 million general securities accounts, and is currently at 8.05 million accounts, a YoY increase of 28.9%,” continued Mikitani. “One of the underlying factors behind this success is how well they’ve been able to leverage the Rakuten Ecosystem to drive growth in account numbers. Additionally, Rakuten Bank accounts have grown by 15.4% YoY and will soon reach 13 million accounts. All excellent growth trends.”
Rakuten Card has issued a cumulative total of 26.69 million cards as of the end of June 2022, and reached a shopping gross transaction value (GTV) of 4.5 trillion yen (up 28.8% YoY) in Q2 2022. The growth in shopping GTV was powered by continued customer base expansion and a recovery trend in offline consumption, boosted by the easing in March 2022 of COVID-19 restrictions.
“Our domestic e-commerce GMS (gross merchandise sales) is doing extremely well, especially considering the fact that many major global e-commerce players in North America and Europe are struggling right now. In contrast, Rakuten was able to grow this key KPI by 12.3% YoY.”Mickey Mikitani
As of the end of June 2022, Rakuten Bank had 12.68 million non-consolidated customer accounts, and its total balance of deposits (non-consolidated) was 8.1 trillion yen. In April 2022, as part of its mid to long-term business plan, Rakuten Bank set targets of 25 million customer accounts and 20 trillion yen in total balance of deposits (non-consolidated) by March 2027. Rakuten Bank applied for listing on the Tokyo Stock Exchange in July.
Rakuten Securities recorded a total of 8.05 million general securities customer accounts and a domestic equities market share of 33.5% as of the end of June. In August, the company’s total monthly purchasing amount for investment trusts surpassed 100 billion yen.
In May 2022, a resolution was passed by the Rakuten Group board of directors to prepare for the initial public offering of Rakuten Securities, Inc. On August 10, 2022, the company announced that Rakuten Securities Holdings will prepare for listing due to an organizational restructuring.
A watershed quarter for Rakuten Mobile
Mobile segment revenue rose to 84.6 billion yen in Q2 FY2022, a significant increase of 64.5% YoY. Factors contributing to the increased revenue include the growth in paying subscriber numbers following the end of the free service plan campaign, and an increase in new subscribers.
The percentage of new Rakuten users among Rakuten Mobile subscribers was 21.5%*3 as of the end of June 2022. Rakuten Mobile has become a new entry point for acquiring new Rakuten users, contributing to further expansion of the Rakuten Ecosystem. In addition, among customers who already used Rakuten services, the average monthly per-user GMS on Rakuten Ichiba increased by 52% after subscribing to Rakuten Mobile, a strong demonstration of increased customer loyalty.
As of the end of June 2022, Rakuten Mobile reached 97.6% population coverage for the Rakuten 4G network area, with the number of outdoor 4G base stations on-air reaching 47,556. Going forward, in 2023 Rakuten Mobile plans to expand its 4G population coverage area to more than 99% with more than 60,000 4G base stations, expanding the Rakuten network service area and continuing to improve the quality of its network.
For more from Mikitani and Rakuten’s leadership team, as well as business-by-business breakdowns of Rakuten’s Q2 FY2022 performance, watch the video from today’s financial results presentation.
For highlights and details on each business segment, please see the press release in full here.
*1 Domestic e-commerce GMS = Combined transaction amount for Rakuten Ichiba, Rakuten Travel (GTV on checkout basis), Rakuten Books, Rakuten Books network, Rakuten Kobo (domestic), golf business, Rakuten Fashion, Rakuten Dream businesses, Rakuten Beauty, Rakuten Delivery, Rakuten 24 and other first-party daily necessities shops, Rakuten Car, Rakuten Rakuma, Rakuten Rebates, Rakuten Seiyu Netsuper, cross border trading, etc. Excludes some tax-exempt businesses, includes consumption tax.
*2 Percentage increase in registered users for each service as of June 30, 2022 compared with June 30, 2021.
*3 Percentage of cumulative total of Rakuten Mobile subscribers from March 2020 or later who had not used a Rakuten service before subscribing to Rakuten Mobile.