Rakuten details plan to fight back against Amazon, SoftBank

This article first appeared in The Edge Financial Daily, on August 28, 2018.
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TOKYO: Japan’s e-commerce giant Rakuten Inc is offering a glimpse into its ambitious plan to build a cutting-edge wireless network to take on Masayoshi Son’s SoftBank Group Corp, stay in the lead in mobile payments and win back market share from Amazon.com Inc.

The new mobile business, slated for debut next year, will tie together the company’s disparate portfolio of about 80 different services, chief operating officer Kentaro Hyakuno said in an interview. The convenience of using one ID for everything from shopping and booking travel to paying the bills will attract new customers as well as convince its more than 90 million registered users to spend more on the platform, he said.

Chief executive officer Hiroshi Mikitani pioneered online shopping in Japan when he started the Rakuten online marketplace more than two decades ago. Since then, the company has lost ground to Amazon and has increasingly relied on financial services such as credit cards and online banking for growth. While Mikitani’s plan to build Japan’s fourth-largest wireless operator will add another business where it does not have a leading market position, the company is betting the venture will serve as a platform for a collection of offerings no other competitor can match.

“The idea is not to try to win with any particular service alone, but rather by combining them together,” Hyakuno said. “It’s OK to be No 2 if your combined lifetime customer value is higher than that of your competitors.” — Bloomberg