KUALA LUMPUR: Rakuten, the Japanese-owned online marketplace, is expanding rapidly in key Asian markets as its unique approach to the sector is paying dividends, a leading company executive has claimed.

Toru Shimada, a director of Rakuten, explained that "the difference between us and other competitors is the way we are investing in the [online] space."

He noted that where rivals had been investing in logistics and infrastructure, "we have been focused and investing into merchants instead and educating them on how best to sell to users online". 

Masaya Ueno, chief executive officer of Rakuten Malaysia, elaborated on the theme at a media briefing reported by Digital News Asia.

"In a survey we conducted recently, the key inhibitor for online shopping was revealed to be fear over the reliability of merchants," he said. "So we have put a lot of work into creating a trusted network and environment for our customers."

As well as creating a portfolio of well-known brands and an easy-to-use platform, he added that Rakuten's in-house team of e-commerce consultants worked directly with merchants to help them set up online.

The success of this approach was demonstrated in the rapid growth of Rakuten Malaysia, which Ueno said in little over six months since launch had built an online mall of 130 merchants, 40,000 products and a monthly average of 30% in total product growth.

He also claimed there had been a 25% increase in member sign-up month-on-month, and a 400% increase in the number of orders.

Ueno expected there would be an increase in marketing efforts in Malaysia, where it is working on joint marketing campaigns and promotions with partners such as Celcom and Era.fm.

Rakuten's expansion strategy in the region has been based around establishing a foothold in four markets – Taiwan, Thailand, Indonesia and Malaysia – before investing in in financial and human resources and acquiring payment partners.

The Indonesian business is the group's "fastest growing arm worldwide", according to Mark Kirschner, the deputy marketing officer of Rakuten Inc.

He told the Jakarta Post that it now had 500 merchants in the country and that the number of paid orders was up 257% in the first quarter of 2013 compared to a year earlier.

Data sourced from Digital News Asia, Jakarta Post; additional content by Warc staff