THE BRIDGE

Company Profiles

In Japan, there is no escaping Rakuten’s reach

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Rakuten-Ichiba, Japan’s biggest online mall, celebrated its 15th anniversary last May. Rakuten (JSD:4755) originally launched back in May of 1997, with just thirteen online stores. It took them seven years and five months to reach 10,000 stores. Now, the total number of stores exceeds 38,000 and the total items sold is over 95.6 million. Rakuten has managed to reach over half of the total population of Japan, reaching about 75 million registered users out of the 130 million who live in the country. According to Rakuten’s 15th year anniversary announcement, until 2003 what sold on Rakuten were items that could only be bought online. In 2004, more consumers were buying food and gourmet items. It wasn’t until around 2008 when people began to buy fashion and apparel online 1. And in 2010, offerings expanded further as consumers began to buy everyday necessities such as water and rice online. Rakuten has essentially overseen the entire history of online shopping in Japan. It is more difficult to find what’s not available on Rakuten than to find what is available. From electronics, to toys, to beauty products – almost anything can be found on Rakuten. The main categories in order of popularity are…

rakuten-logo

Rakuten-Ichiba, Japan’s biggest online mall, celebrated its 15th anniversary last May. Rakuten (JSD:4755) originally launched back in May of 1997, with just thirteen online stores. It took them seven years and five months to reach 10,000 stores. Now, the total number of stores exceeds 38,000 and the total items sold is over 95.6 million.

Rakuten has managed to reach over half of the total population of Japan, reaching about 75 million registered users out of the 130 million who live in the country. According to Rakuten’s 15th year anniversary announcement, until 2003 what sold on Rakuten were items that could only be bought online. In 2004, more consumers were buying food and gourmet items. It wasn’t until around 2008 when people began to buy fashion and apparel online 1. And in 2010, offerings expanded further as consumers began to buy everyday necessities such as water and rice online.

Rakuten has essentially overseen the entire history of online shopping in Japan.

It is more difficult to find what’s not available on Rakuten than to find what is available. From electronics, to toys, to beauty products – almost anything can be found on Rakuten. The main categories in order of popularity are food, women’s fashion, daily necessities/stationary, furniture, and men’s fashion.

According to a mobile usage survey conducted by Ceres Inc., 84.2% of respondents have engaged in online shopping. But where are they shopping? It turns out Rakuten is the most popular destination, favored by 68.5% of respondents. Amazon and Yahoo Shopping followed, with 58.0% and 38.6% respectively 2. One of the most remarkable things about Rakuten’s user base is the survey says it appears to be favored by older segments of the population, as you can see below:

Ages Percentage
10-19 34.9
20-29 65.6
30-39 72.1
40-49 72.1
50-59 77.2

In contrast, Amazon is preferred by younger users. The fact that Japan’s population is growing older and older is amazingly working in Rakuten’s favor.

As far as Rakuten’s website design goes, I am not their biggest fan. It shows far too much information at once and is much in need of an overhaul. But similar to Craigslist, people appear to have adjusted to the confusing and cluttered design – and it might even be a risk to change that now. But the design issue is not stopping more and more stores from joining Rakuten’s mall. And they still have lots of room to grow, since the online rate of the retail industry in Japan is only 2.8% 3. The rest are still small stores selling offline.

When you search for an item to buy, whether on Google or Yahoo, Rakuten items always show up on the first page of the search result. Popular blogs using Rakuten’s affiliate service make it difficult to escape, as their sidebar widgets remind you of products you may have been recently browsing on Rakuten. The company sends out millions of newsletters by store or by item category.

Here in Japan Rakuten dominates e-commerce, and if you frequent the Japanese web, there is practically no escape from its reach. As they expand abroad, it will be interesting to see how far that reach can extend!


This is part of our ‘Japanese internet in-depth’ series (RSS). Stay tuned for more features that aim to explain what makes the internet unique in Japan.


  1. A competing fashion e-commerce service called Zozotown launched in December of 2004, they were a bit ahead of their time, although with the right vision, successfully turned itself into the biggest online fashion mall.
  2. Another recent survey of elderly consumers found that 90% of respondents use Rakuten, followed by Amazon at 55.2%, and Yahoo Shopping at 27.0%.
  3. Report published by Ministry of Economy.

With 100 million users, LINE is the Japanese Facebook

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Line, one of the most popular smartphone apps in Japan, recently reached the 100 million user milestone. The free chat application was made by NHN Japan Corporation, and launched back in June of 2011. The app makes use of the user’s phone directory, allowing them to get connected with people they actually know in real life. Sound familiar? Yes, Line is in many ways aspiring to be Japan’s Facebook — the primary difference being that Line is a social service born entirely on mobile. Line is gaining popularity around the Asia region with about half of it’s users coming from outside Japan. Many celebrities in Japan are using the app including current prime minister Abe Shinzo who joined the service in January. The biggest reason behind the app’s success lies in the timing of its release. It came during a time when not-so-tech-savvy mainstream users began switching from feature phones to smartphones. With a completely different and unfamiliar tool, people turned to Line for help. With Line, all you needed to get connected with friends was their phone number. And everyone with a phone has that already. Ubiquity, and beyond! Line was first adopted by younger users but gradually gained…

sd-line-image-press

Line, one of the most popular smartphone apps in Japan, recently reached the 100 million user milestone. The free chat application was made by NHN Japan Corporation, and launched back in June of 2011. The app makes use of the user’s phone directory, allowing them to get connected with people they actually know in real life. Sound familiar? Yes, Line is in many ways aspiring to be Japan’s Facebook — the primary difference being that Line is a social service born entirely on mobile.

Line is gaining popularity around the Asia region with about half of it’s users coming from outside Japan. Many celebrities in Japan are using the app including current prime minister Abe Shinzo who joined the service in January. The biggest reason behind the app’s success lies in the timing of its release. It came during a time when not-so-tech-savvy mainstream users began switching from feature phones to smartphones. With a completely different and unfamiliar tool, people turned to Line for help. With Line, all you needed to get connected with friends was their phone number. And everyone with a phone has that already.

Ubiquity, and beyond!

Line was first adopted by younger users but gradually gained popularity over mainstream users including seniors. With over 100 million users, it is the new digital marketing platform. To better take advantage of Line, many companies are conducting user surveys. A survey of married couples and their usage of Line was a particularly interesting one. It targeted 800 married men and women of age 20 to 40. 39.5% responded that the app increased communication with their spouse. 29.4% of respondents answered that their spousal relationship has improved since using the app.

line tenki
Line also launched Line Tenki, or Line Weather this past week

But since last summer, the chat app has become more of a platform than just smartphone chat application. NHN began providing a service named Line Channel in July of 2012, a year after the app’s initial release. On Line Channel, users are able to enjoy games, fortune-telling, and even discount coupons. One game, Line Pop, has been downloaded over 20 million times worldwide as of January 2013, just two months after it’s release.

But there is a cutthroat war brewing in the chat application market. Line is no doubt the pioneer in Japan, but DeNA’s Comm and Korea’s KakaoTalk have jumped in the ring recently too. At the end of 2012, Comm had been downloaded more than five million times since it’s October launch. Kakao Talk had about 70 million users as of December 2012, with 18 million of those overseas, and about 4 million of those in Japan.

We were in touch with the CEO of Viber this week as well, who pointed out that they are hoping to make a renewed push in Asia where the app has 50 million users in total. Interestingly, six million of those are in Japan.

But still, Line’s dominance is pretty secure at home, with about 41.5 million users in Japan. Stay tuned to see how it fares abroad this year.


This is part of our ‘Japanese internet in-depth’ series (RSS). Stay tuned for more features that aim to explain what makes the internet unique in Japan.

For more information on the growth of Line, please check out our interactive Line Timeline which chronicles its growth from its launch back in 2011 up until the present day.

Tokyo Otaku Mode has 10 million Facebook fans — But now what?

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When I first heard of Japan-based startup Tokyo Otaku Mode it was little more than a Facebook page sharing content about Japanese Otaku subculture. But as far as Facebook pages go, there wasn’t really anything little about it. At that time I think they had about half a million fans, and since then they have gone on to crack through ten million. Yes, you read that correctly. Ten. Million. To put that in perspective, that actually makes them bigger than both Elvis (7M fans) and Jesus (5.1M). In the last year alone, they saw new fans coming on board at an average rate of 600,000 per month. The content on Tokyo Otaku Mode is primarily curated. That doesn’t simply mean curation in the normal sense of tumblr-esque web clippings brought together in recycled stream of web regurgitation. The startup gets in touch with right holders not just to obtain permission to share content, but also to offer its services to help Japanese content creators reach global audiences. According to co-founder Nao Kodaka, many of those rights holders say that the Japanese market is not growing, and now they want to pursue audiences abroad. So far, Tokyo Otaku Mode has established…

tokyo-otaku-mode-lead

When I first heard of Japan-based startup Tokyo Otaku Mode it was little more than a Facebook page sharing content about Japanese Otaku subculture. But as far as Facebook pages go, there wasn’t really anything little about it. At that time I think they had about half a million fans, and since then they have gone on to crack through ten million.

Yes, you read that correctly. Ten. Million.

To put that in perspective, that actually makes them bigger than both Elvis (7M fans) and Jesus (5.1M). In the last year alone, they saw new fans coming on board at an average rate of 600,000 per month.

The content on Tokyo Otaku Mode is primarily curated. That doesn’t simply mean curation in the normal sense of tumblr-esque web clippings brought together in recycled stream of web regurgitation. The startup gets in touch with right holders not just to obtain permission to share content, but also to offer its services to help Japanese content creators reach global audiences. According to co-founder Nao Kodaka, many of those rights holders say that the Japanese market is not growing, and now they want to pursue audiences abroad. So far, Tokyo Otaku Mode has established healthy relationships with those groups and individuals, and as a result, can publish high quality content regularly.

The thing that most astounds me about Tokyo Otaku Mode is that the company has managed to build such a community around Japanese culture with only a ten man team. I can’t help but contrast with this the Ministry of Economy, Trade and Industry’s own Cool Japan efforts, which is in a way are trying to do the very same thing – but obviously with not as much success.

Community first

Tokyo Otaku Mode began back in 2011. That wasn’t long after the earthquake, and Nao tells me that they wanted to try to do something that could help Japan. Facebook was just catching on in the country at that time [1]. And while there were more than a few fan groups and sites focused on anime, manga, and Japanese culture, Nao says that there weren’t really and Japanese individuals or media reaching out to the world on their own. He succinctly explains:

All we have is our content. Our uniqueness, and our content.

For a young company just starting out, Facebook was certainly a logical place to build up a fan base. It’s free, and there are no server costs.

Tokyo-otaku-mode-facebook-fans-small

Nao describes how his team experimented with different methods of Facebook posting, trying different numbers of photos to see if some worked better than others. He points out that fans eventually began tagging themselves in photos, which meant that their friends were also seeing Otaku Mode content too. In the end, it looks to have resulted in a perfect storm of viral content that still hasn’t let up (see fan growth in the chart on the right).

Tokyo Otaku Mode has previously received backing from a number of investors. I recently got in touch with one of them, Craig Mod, who explained to me what it was about Tokyo Otaku Mode that made him want to get behind them as an angel investor [2]. He describers them as a team of “total hustlers” and sharp marketers, bold enough to turn social media on its head:

[T]he fact that they saw an opportunity to leverage Facebook — and Facebook alone — as a platform to launch a publishing-like company was, to me, a first. Instead of spending tens/hundreds of thousands of dollars building complicated software for their company, they spent five minutes and used Facebook Pages as their home base on the internet. Obvious in hindsight but very avant garde even just a year ago.

Mo’ Money, Mo’ mobile

But you can’t make money directly on a Facebook fan page. So Otaku Mode was still faced with the problem that plagues so many in the content industry. How do you convert eyeballs into dollars? The strategy that the company has taken, and one which mentors have advised, is to drive Facebook traffic to its new website at OtakuMode.com, which just recently emerged from its private beta to become fully open to the public.

Nao explains explains that they hope to drive enough traffic to the site so that they could eventually advertise and convert those eyes into dollars.

The company has also dipped its toes in the mobile space as well, publishing its Otaku Camera application for iOS and Android, which turns your photos into manga style art. It isn’t the most original idea in the world, as Manga Camera did pretty much the exact same thing. But Otaku Camera is, in my opinion, far better executed. So far it has over 500,000 downloads, which is not a bad start. I’m told that in the future the application could sell special frames, in collaboration with certain rights holders.

Momoiro Reku: Hatsune Miku cosplay on Tokyo Otaku Mode
UGC content: Momoiro Reku’s Hatsune Miku cosplay on Tokyo Otaku Mode

The site also now serves as an outlet for content creators as well, with a dedicated UGC section which features some really amazing stuff. There’s also a verification process, by which the best of the best content creators earn a sort of Twitter-style verified badge, provided that they meet a number of stringent criteria. They can upload content on their own, and leverage Otaku Mode’s platform to reach audiences overseas who they may not otherwise be able to reach.

The website also recently added a news section, where articles about the latest happenings in the world of manga and anime are posted. The company also foresees the possibility of branching into e-commerce as a possible monetization method. Nao says, “Picture Esty, but for Otaku.”

This young company will certainly be one to watch in the coming year, just to see if its good fortune can extend beyond its Facebook success. I’m not going to make any predictions, but if I were a betting man, I certainly wouldn’t wager against them.


  1. In fact, Facebook’s role in post-earthquake communication highlighted the social network in the eyes of many in Japan.  ↩

  2. Craig previously wrote his impressions of the company for Contents Magazine in a wonderful article entitled “Our New Shrines“. Like almost everything Craig Mod writes or creates, I can’t recommend it enough.  ↩