Ecommerce enters new phase

4 April 2013

TOKYO: Online retail is entering a new phase as the technology available to companies in this sector grows ever more sophisticated, the head of Rakuten, Japan's biggest ecommerce platform, has claimed.

Hiroshi Mikitani launched Rakuten in mid-1997, and has since developed it into one of the world's largest digital retail sites.

"Up until now, internet shopping was about the process," he said. "How to make your checkout process efficient. How to make your delivery smooth and fast. How to buy things cheaply."

But, he added, "shopping should be a more rich experience", a characteristic which is lacking from the "vending machine" approach of rivals like Amazon.

Rakuten, by contrast, operates as a digital shopping mall, charging vendors to use its platform and encouraging buyers to become online regulars at their favourite stores.

"We are a bazaar. We are not a supermarket," said Mikitani. "We are creating a first-class shopping district instead of being a retailer ourselves."

Mikitani also has no intention of changing this format: "We are sticking to this third-party marketplace model instead of just building a gigantic first-party sales model to destroy the businesses of smaller guys" he declared.

"My point is you don't need to kill the human factor," he said. "You can amplify the human factor by using information technology."

Mikitani also described his firm as a "service provider" that delivers lower prices. "Most of the products on Rakuten are cheaper than the products on Amazon," he claimed. "Because the shops focus on one category, they are very competitive.

"Maybe we cannot beat Amazon completely, but I think that's the destiny of the company," he added.

Rakuten is currently gearing up to launch in the US, having recently rebranded the Buy.com site it bought in 2010.

Data sourced from IT World, Wired; additional content by Warc staff