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:
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.
- 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.↩
- 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%.↩
- Report published by Ministry of Economy. ↩