Hiroshi Mikitani, CEO of the Japanese e-commerce site Rakuten stopped by the Fortune offices to promote his new book Marketplace 3.0: Rewriting The Rules Of Borderless Business, where he outlines his company's strategy for globalization. Founded by Mikitani in 1997, Rakuten is the largest e-commerce site in Japan and with a market cap of $13.5 billion and annual sales of over $4 billion; it is one of the biggest Internet companies in the world. In the U.S., it bought Buy.com for $250 million and rebranded it to "Rakuten.com Shopping" earlier this year. Why it's not Amazon While it has been called the "Amazon.com of Japan," Mikitani says that comparison wasn't quite accurate. Amazon's (AMZN) focus has always been on the product and the customer, by improving distribution and choice. For Rakuten, it's more about the shopping experience itself. The company works on the principle of "Omotenashi," which is the Japanese concept of providing high quality and personal service. "In Japan, if you go to a local coffee shop, or a grocer or any local business, you will find a very high level of personal service," says Mikitani. "The internet should be that way as well." Mikitani says Rakuten tries to create a personal shopping experience for its users by allowing each seller on the site to customize their page with unique layouts, pictures and promotions. The vendors can then edit and update the page constantly as well as communicate directly with the customer. "We want to make them feel like there really is a person in there," says Mikitani. To underscore the comparison, Rakuten's promotional material shows picture of a vending machine with several different brands signifying competitor models and a picture of a roadside market with many different stalls and products to signify its own model. "We want to avoid standardization," says Mikitani. "We're creating more stories, experiences and communication between people who buy and people who sell." A big site for small companies With nearly 90 percent of Japan's Internet users registered on Rakuten, retailers wanting to reach the country simply can't afford to not sell anything on the site. Currently it hosts 40,000 different businesses and services. While it has pages for major companies such as Toshiba, Adidas and Forever 21, Rakuten built much of its business by providing a point of sale for small businesses and local entrepreneurs. It's a similar concept to Etsy, only Rakuten is 17 times larger and 14 years older. "Etsy and Fab really should have closely studied Rakuten before they started," says Mikitani with a smile. |
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