Rakuten CEO gives merchants reasons to be optimistic

Rakuten Optimism 2019 was a festival of cutting-edge technology, thought leadership, gourmet and entertainment. But for thousands of Rakuten Ichiba’s e-commerce merchants, it also represented an opportunity to come together and interact with many of the platform’s key figures — including Rakuten chairman and CEO Mickey Mikitani.

Mikitani held a special session with merchants to communicate his vision for the future, talking at length about the upcoming launch of Rakuten Mobile, the impact of 5G networks and new initiatives in payments, logistics and fashion.

Taking charge of logistics with Rakuten Express

“Rakuten needs to take the lead on logistics,” Mikitani told the merchants in attendance, outlining Rakuten’s vision for initiatives with AI, drone and robot deliveries, and referencing the more than 200 billion yen Rakuten has earmarked for building out logistics infrastructure in Japan. “We are committed to making a serious investment to transform Japan’s logistics industry. This is the only way to keep growing into the future.”

Mikitani unveiled plans to work toward managing the majority of Rakuten Ichiba deliveries from end to end using Rakuten’s in-house delivery service Rakuten EXPRESS. Rakuten-branded delivery vans are already a common sight around major cities, but the service will be expanding even further with a number of new warehouses and a new initiative to collect and deliver packages directly from merchants’ own warehouses.

“Right now, Rakuten can deliver to about 30% of Japan’s population. We’re looking to expand that coverage to 60% by the end of this year, and to over 80% in the future,” Mikitani said. “Our goal is to be handling 50% of all Rakuten Ichiba deliveries by 2021.”

Mickey Mikitani presents his bold vision for the future of logistics in Japan.
Mickey Mikitani presents his bold vision for the future of logistics in Japan.

Giving (free) shipping a makeover

“Previously, concerns shared by our customers focused on excessive emails and products being shipped separately. But nowadays [as we’ve addressed those issues], the most prevalent concerns raised by customers are about inconsistent shipping prices.”

Until now, shipping prices on Rakuten Ichiba were set individually by the merchants themselves, giving merchants more autonomy over their business, but potentially leading to mixed signals on shipping prices for shoppers. For the first time, Mikitani unveiled a bold new initiative to set standard prices for all deliveries across the platform, with free shipping above a specified purchase amount.

“Standardizing shipping prices on Rakuten Ichiba will deliver a huge boost to the revenue of each of your stores. That’s another reason we’re establishing a free shipping system,” Mikitani explained. “We conducted extensive market research, analysis, simulations and trials, and came to the conclusion that making purchases above 3,980 yen free across the whole platform is the best strategy.”

“The trials we’ve conducted so far have yielded positive results — a 15% jump in spending per shop and a 14% jump in new customers,” Mikitani shared. “This is something we want to implement in the first quarter of 2020.”

A renewed focus on fashion

In a welcome turn for Rakuten’s many fashion merchants, Mikitani announced the new title sponsorship of one of Asia’s biggest style events: the Rakuten Fashion Week Tokyo.

Taking place from October 14 – 20, 2019, the event will feature celebrated designers from across Asia for a week of runway shows and exhibitions around Tokyo. Rakuten’s own online fashion platform is one of the largest in the industry with over 1,100 merchants, and Mikitani is looking to boost its profile even further.

“The fashion genre is enjoying rapid growth on Rakuten Ichiba. With this partnership, we aim to reach people across Japan and around the world. We’re looking to empower the fashion industry and give users an even more exciting experience.”

Walking Together into the 5G age

“The theme of this event is Walk Together,” Mikitani told the merchants. “We used to hold separate events for Rakuten Ichiba, Rakuten Travel, Rakuten Fintech and others. But we’re bringing it all under one roof.” Mikitani emphasized the importance of “walking together” with merchants to ensure mutual success, aligning on key goals to leverage the power of Rakuten’s diverse ecosystem and create a competitive edge in offering great services to customers.

Mikitani encouraged merchants to stay optimistic in a changing world.
Mikitani encouraged merchants to stay optimistic in a changing world.

Rakuten’s e-commerce platform has remained strong through the turbulent trends of tech, Mikitani told the audience. “Rakuten Ichiba began operations 22 years ago, during the age of slow dial-up modems. The next two decades have seen the internet speeds jump by almost 1000 times. That same 1000-fold jump will be realized again in the coming two or three years, as we move from 4G to 5G.”

The 5G revolution won’t affect just e-commerce, but society as a whole, Mikitani declared.

“What was once a small dirt path is now a warp-speed, multi-lane expressway. You can download a movie in a few seconds. You’re holding AI in the palm of your hand. Cash is disappearing. Cars are driving themselves. The world is changing.” And with Rakuten Ichiba and its merchants continuing to walk together, the future is bright.

Learn more about the Rakuten Optimism event held in Japan from July 31-August 3 here

For more information about the upcoming Rakuten Optimism event in San Francisco on October 23, please visit this site.

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