A new year, a new decade: Rakuten looks ahead
Above image: A handwritten prayer for the New Year at Atago Shrine in Tokyo: “To the world winning against COVID-19 and an economic recovery, Mickey Mikitani.”
Mickey Mikitani, Chairman and CEO, Rakuten, Inc.
As we say goodbye to 2020, I am looking ahead — not just into 2021 but to the coming decade as well. We are on the cusp of great things. Of course, the year we have all just endured has been very difficult. And we are not yet finished with the impact of COVID-19. But despite the many challenges ahead, there is still much to be optimistic about, both for Rakuten and for society at large.
Resilience: Bring value and convenience to consumers through ecosystems
Because of our ecosystem and because of the diversity of our business model, in the midst of the pandemic, Rakuten maintained healthy growth in 2020. Our global gross transaction value represented more than 22 trillion yen (USD209 billion.) Global membership reached around 1.5 billion members. Domestic e-commerce continued to see double-digit growth.
Our fintech services were robust: The number of Rakuten cardholders is now above 20 million; Rakuten Bank accounts surpassed 9 million and Rakuten Securities accounts are also over 5 million. Our digital content businesses around the globe are also doing well.
Of course, at the center of much of the growth we’ve seen both online and offline is our Rakuten Points program, and this past year we hit a significant milestone, awarding our two trillionth cumulative point.
Overall, we demonstrated resilience as a team in the face of unprecedented challenges.
Lead the mobile revolution
Let’s talk a little about Rakuten Mobile. One of our biggest achievements was reaching two million Rakuten Mobile UN-LIMIT applications by the end of last year. It’s been encouraging to see this progress, despite the challenges that come with starting a world-first mobile network from scratch. In addition to increasing subscription numbers, we are also receiving excellent feedback from customers. They not only like our one-year free campaign, but also the simplicity and the speed of our service.
When we started the project, our plan was to reach 96% population coverage by 2026. Now we are aiming to achieve this within about two and a half years from the start of our radio station buildout. This is a five year acceleration from our original plan.
With our rapid radio station buildout and 96% population coverage in Japan, we will already offer a very competitive service but there is more to come in the near future with an exciting space project. We’re looking forward to working with a partner company called AST that uses satellites to bring connectivity from space directly to your mobile handset. AST will not only help us cover Japan — they basically have the capability to connect the entire world.
This technology will be able to connect with your device via satellites in space, without any special hardware. So even if you go to the mountains or a desert island, or are traveling by ship or plane, you will get connectivity. And in emergency situations such as a typhoon, earthquake or wildfire, we will still be able to provide connectivity from space.
Driven by groundbreaking technology and a commitment to disrupt an industry for the benefit of Japan’s consumers, another major achievement of 2020 for the Rakuten Group was the full-scale commercial launch of the world’s first fully virtualized end-to-end mobile network. The world was shocked.
We believe we have opened the gate for OpenRAN and also virtualized RAN, meaning that we have gotten rid of the need for most of the specialized hardware in the mobile network. For a traditional telecommunications network, operators have bought not only very expensive, but very inflexible hardware that they cannot configure flexibly to provide rich services to consumers.
Now we are deploying our next generation platform: the containerized cloud platform called Rakuten Communications Platform (RCP). This will be another very big breakthrough and milestone for the industry — and something that we intend to offer outside of Japan as well. We have several very promising projects in our pipeline.
In the 5G era, everything will be connected, meaning that manufacturing, logistics, even agriculture will be deeply dependent on a fixed line or wireless network. Every device, anything you use, will be connected. The internet infrastructure is going to be important, not only for consumers, but for everything.
Sustainability: Be creative to achieve 100% renewable energy
This winter has been very, very cold for most of the northern hemisphere. But it is very clear that global warming is moving forward.
While watching the news recently, I saw that during the pandemic, we have reduced our carbon emissions by only seven percent! I thought it might be 30 to 40 percent, but no, just seven. It goes without saying then that to reduce emissions by 50 percent or more over the next 10 years is going to be challenging.
But we will rise to this challenge. 17 of Rakuten’s services are already operated using 100% renewable energy, including the Rakuten Ichiba marketplace. We are participating in the global RE100 initiative to reduce carbon emissions, and at the end of 2020, we received our first-ever selection to CDP’s A List for Climate Change.
To become carbon free throughout the entire Rakuten Group, including our logistics businesses, warehouses, and so forth, we have to be creative. This is going to be the next big project for the next 10 years for the Rakuten Group.
Become a growth engine for the world
Nobody can see into the future. I don’t know if we’re going to one day get into the electricity generation business or the automobile business or the mobility business, or something else. Ten years ago, I never imagined we would get into the mobile business. So, who knows what we are going to do in 10 years? What I do know is that we will work to make Rakuten a growth engine for Japan and the world.
I don’t know how fast we will overcome this COVID-19 pandemic together, but we must take into account the societal transformation happening now in order to further grow and to empower people around the world.
Let’s work together to move forward and make 2021 our best year yet.
This text is based on the annual greetings delivered by Rakuten’s CEO to Group employees at the opening of business in the new year.
