The Rakuten Indonesia site.

Nikkei first broke the news last month that the joint venture between MNC and Rakuten (JSD:4755) is over in Indonesia. We reached out to both MNC and Rakuten but no one wanted to speak about the situation on the record. The e-commerce site Rakuten Belanja Online is still running, though who knows what’s going on behind the scenes with MNC and Rakuten. This morning Rakuten finally broke the silence, sending us an official statement from Toru Shimada, senior executive officer and head of Asia HQ, who said:

Two years ago, Rakuten launched Rakuten Belanja Online in Indonesia with our JV partner MNC Group. We are very pleased with the growth of the business, where today we offer the widest range of products from Indonesia’s top merchants, as well as the tremendous response we have seen from Indonesian merchants and consumers alike.

From the beginning, we recognized Indonesia’s potential to become one of the biggest e-commerce markets in Asia, and our confidence in the market has only increased in the last two years. With the launch of Rakuten’s regional headquarters in Singapore last year, we are now able to accelerate the growth of our businesses around the region and will be increasing our investment in this exciting market.

We believe that through deepened focus and investment, we’ll be well positioned to not only accelerate the value that our B2B2C model and e-commerce platform brings to both empowering merchants and consumers, but also help spur the evolution of the Indonesian e-commerce landscape.

It’s a pity it doesn’t explain exactly what happened between MNC and Rakuten. But at least we now know Rakuten will still continue to be in Indonesia.

Rakuten told the media that it will not be commenting further on this issue. But the company did say that more of its APAC plans will be shared at its Q2 2013 earnings conference call on May 9.

Currently onstage now is the founder of Thailand’s e-commerce site Tarad.com, Pawoot Pongvitayapanu or Pom. Interviewed by Willis Wee, Pom talks about the lessons he learned after Japan-based e-commerce giant Rakuten bought a majority stake of Tarad in 2009.

#15:02: Tarad is a marketplace and it was started in 2001. Pom said that it was the worst time to start a business because Thailand was having a crisis then.

#15:05: Pom said that – if based on newspaper reports – Rakuten bought majority stake on Tarad for US$3 million. He said that everything changed after Rakuten came in. Now that they’re working with Rakuten, everything has to be in numbers, everything has to be punctual. “We have morning meeting, each team has daily communication, and every person has to submit report every day,” said Pom.

#15:07: KPI tree is important, we break down our target numbers like traffic and buyer convertion. Each KPI belongs to each department, and each department’s KPI is broken down to each person.

#15:09: You can download Pom’s KPI spreadsheet through his personal website Pawoot.com. But it needs some translation effort.

#15:12: Most people work for money, but if you’re working for another reason which is bigger like to empower the society, it is better as you are more purpose-driven. “Rakuten made us believe that we can grow and change the lives of the society and country. It is important to us.” Before getting acquired, Pom didn’t have that way of thinking.

#15:14: Rakuten CEO Hiroshi Mikitani inspired Pom. “If you’re working in Rakuten, you know everything.” It is because the employees always communicate with each other every day.

#15:17: It was very hard to convince people to shop online, but after getting acquired by Rakuten, credit card has become the majority of online payment method on Tarad. If Pom had the chance to do it all over again, he would run his company just like Rakuten does.

This is a part of our coverage of Startup Asia Singapore 2013, our event running on April 4 and 5. For all our newest Startup Arena pitches, see here. You can follow along on Twitter at @techinasia, and on our Facebook page.

Shin Hasegawa, assistant CMO and head of Asia marketing at Rakuten (JSD:4755), is onstage now to discuss how the Japanese e-commerce giant is expanding across the region. Despite the company’s strength, it has failed in China and is now struggling in Indonesia, so it’s an interesting challenge that entrepreneurs can learn from. Here’s the live blog:

#11:39: After stressing how Rakuten is an open marketplace with an emphasis on being a cross-border ecosystem, Shin says the company is always keen to make partnerships in Asia. Now the audience has his email address too.

#11:39: Shin admits that only operating from Tokyo did become difficult, so being “in the center of Asia” in Singapore is beneficial for hiring talent and lots of other things. And now Rakuten “is getting the benefit” from this presence already after opening the Singapore office last year.

#11:40: Rakuten goes into countries in different ways: “Whatever’s the best way,” Shin says, is a better way to operate. Startups can be “part of the family or ecosystem” when Rakuten goes into new markets.

#11:43: In terms of startup partnerships, the first focus is of course e-commerce, payments, and logistics. The second area is broader, he says, which is any service “beneficial to our users”. That covers the recently launched Rakuten Fund.

#11:44: “We’re not looking at financial gains” for the fund, and it’s also about the ecosystem.

#11:48: There is a focus on places like Malaysia, Thailand, Indonesia, etc., but Rakuten won’t rule out any areas.

#11:49: The Rakuten Singapore office is now up to 20-25 people, and will grow to 45-50 later this year. He says he’s interviewing a lot, “in an aggressive interviewing mode” in his working time.

This is a part of our coverage of Startup Asia Singapore 2013, our event running on April 4 and 5. For all our newest Startup Arena pitches, see here. You can follow along on Twitter at @techinasia, and on our Facebook page.

Rakuten isn’t all about e-commerce or its Kobo e-reader. It also runs Rakuten Travel, an online travel agency (OTA), which is popular in Japan. The company is also serious about expanding the service to Southeast Asia, with its new Rakuten Asia headquarters in Singapore established just recently.

Rakuten Travel has had offices in Thailand since June of 2008, and in Indonesia since April, 2012. In recent months, it has established offices in the Philippines, Vietnam, and Malaysia. The key function of these offices is to work with hotels in each country. Revenue growth for this division has been pretty decent so far in Southeast Asia, growing 30 percent from 2011 to 2012. A representative for Rakuten Travel declined to disclose specific revenue figures but confirmed that the base number is probably still relatively small.

Yoshihisa Yamada, the vice chairman at Rakuten Travel said at a press conference today that the OTA site currently mainly serves outbound Japanese travelers. In other words, after tying up with hotels in Southeast Asia, the content and bookings are available in Japanese to the bulk of Rakuten Travel’s customers. But as time passes, Rakuten Travel will promote itself within Southeast Asia to acquire users here.

Though Rakuten had to pull out of its e-commerce venture in China, its Rakuten Travel operations (through an acquisition of Etpass in 2011) seem to be doing well. Sales for Etpass were dipping until Rakuten took over in 2011. Yamada says that Etpass is a good company but was just having trouble with its management. Besides the typical SEM and SEO execution, Yamada also said that Qunar, the Baidu-owned travel meta-search site, helps bring in a lot of sales.

When it comes to expansion, I think Rakuten is better off working alone or acquiring companies to set up its base. Tarad and Etpass are working okay. But its joint ventures in China (with Baidu) and Indonesia (with MNC Media) have dissolved, leaving the company with the challenge of regrouping and rethinking its strategy in those regions.

Image source credit: imgix.8tracks.com

Last night’s news of Rakuten (JSD:4755) breaking up its joint venture with MNC in Indonesia sent shockwaves through the entire tech ecosystem. It could spell the end of Rakuten’s e-commerce business in Indonesia. But why the sudden break?

So far there’s no clarification from either Rakuten or MNC – and no response to our queries to Rakuten Asia – so we can only speculate as to what happened to its dismantled joint-venture. But there is surely only one explanation that makes sense: that its e-commerce project, Rakuten Belanja Online (RBO) isn’t meeting its expectations and goals in Indonesia. We’ve seen it before with Rakuten’s joint venture with search engine Baidu in China, which was shut last year.

Back in November, Ryota Inaba said that RBO’s growth was “good and promising.” The company managed to surpass its first-year expectations, and when it comes to sales, RBO was recording double-digit sales growth from month to month and triple-digit annual growth. It all looked good, right?

Victory for Blibli and Lazada Indonesia

But according to Alexa’s web rankings, RBO is sitting at 599th in terms of visitors in Indonesia – that might be a clue to the online shop’s struggle here. As we’ve seen with the popular online stores in the country, a lot of Rakuten’s rivals are already ranked higher than 100 in terms of local web visitors. One of its biggest competitors, Blibli – which was launched around the same time as RBO – is ranked 231st, and newcomer Lazada Indonesia rocketed its way up to 41st position in less than one year. RBO’s one-and-a-half year impact here seems weak in comparison to those sites.

We can also take a look at its marketing. Back when we interviewed RBO head of marketing in 2011, they said that through the company’s partnership with MNC Media, they would go all out on advertising. The same strategy was put into action by its rivals like TokoBagus, Blibli, and Rocket Internet’s Lazada Indonesia, and it looks like RBO can’t beat them on that front. And even if the Japanese company can, it doesn’t look like its back-end operations are keeping pace.

Rakuten’s problematic services

We also need to take a look at RBO’s execution. A few customers are a bit upset about the company’s services and made their complaints on RBO’s Facebook. A few said that they weren’t receiving their refunds or that there isn’t any confirmation made after they’ve wired in the money.

A particular Facebook conversation last week between a disgruntled customer who had trouble ordering products and RBO is a good example about the company’s problems from the back-end. The customer only learned that the product he ordered was out of stock after the merchant – not RBO – contacted him directly. In fact, the merchant said they were never given confirmation by RBO about the sale. The customer then explained that RBO never replied to his emails and his repeated calls to customer services didn’t solve the problem.

In fact, there are quite a number of complaints being thrown on RBO’s Facebook page, with other customers joining in on the conversation and sharing their frustration too. Rakuten’s Japanese expertise in the e-commerce industry shouldn’t be facing these common problems, but it does. So the question is how much of a team did Rakuten dedicate to the indonesian venture?

This isn’t Rakuten’s only venture into Southeast Asia. In 2009, Rakuten acquired Tarad.com, Thailand’s leading e-commerce platform, and it’s been quite successful. But the difference between Thailand and Indonesia can be attributed to Tarad’s pre-existing foundation of back-end operations and customer services prior to Rakuten’s acquisition. Something MNC didn’t have.

The road forward for Rakuten

There could be other reasons behind this split. Perhaps there was an internal dispute at PT Rakuten-MNC, or because MNC couldn’t plough in any more extra cash as the company is now committed with Chinese company Tencent to promote the China-made WeChat app in Indonesia through another joint venture.

Whatever the case may be, there is one big question that’s being asked by a lot of people today. “Will RBO be closed?” Rakuten and Baidu’s joint venture e-commerce Lekutian was closed after the two companies announced the break-up. The same could happen here too, but for the moment the e-commerce store is still alive.

It’s going to be interesting to hear the thoughts from Rakuten Asia’s director and assistant chief marketing officer Shin Hasegawa about the company’s efforts to stake its claims in Asia when we interview him during our Startup Asia Singapore event this April 4th. The team is eyeing growth and expansion in Southeast Asia, but will Indonesia remain on the Japanese company’s radar? We’ll have to wait and see.

Hit the comments with your theories on RBO’s fate and performance in the market.

Japan’s Nikkei is reporting that Rakuten’s (JSD:4755) e-commerce efforts in Indonesia are now in doubt with the dissolution of its joint-venture company with Indonesian media company MNC Group. The paper says the MNC split has been confirmed to it by Rakuten. It could well mean the end of the localized Rakuten Belanja Online store that launched in Indonesia in June 2011. We’ve contacted Rakuten Asia for more details and will update if we hear back.

The joint-venture for Indonesia, PT Rakuten-MNC, is split 51-49 in favor of the Japanese e-commerce giant. It’s one of 13 nations where Rakuten operates. In November last year, the site reported having 400 merchants with 300,000 products offered, representing 500 percent growth since it launched.

Shortly after launching in Indonesia, the head of marketing at Rakuten Belanja Online, Doddy B Ekaputra, told us that Rakuten is “striving to be number one in Indonesia” with its open marketplace for merchants. He added that MNC was chosen as a partner because it’s a media company, and “we are aware of how important advertising is, so yes we are going to go all out in advertising.”

Nikkei states that Rakuten and MNC agreed the spilt in February.

This isn’t the first major failure for Rakuten’s overseas ambitions. Its China store was shuttered in April 2012. It was run in partnership with Chinese search engine Baidu, but the store found it tough to compete in China’s mature and intense e-shopping market.

With Rakuten Indonesia out of the picture for now, it leaves Rakuten Ichiba Taiwan the only joint venture effort that’s still alive.

(Thanks to @Hotta for translation help; Source: Nikkei Japanese)

Pawoot Pongvitayapanu (pictured) – known to many as Pom – is the founder of Tarad.com, one of the largest e-commerce sites in Thailand.

In 2009, Rakuten bought a majority stake in Tarad and made it the Japanese company’s springboard into Thailand. In the last three years, Pom saw how Rakuten co-run Tarad and made his business even more data-driven and disciplined.

He shared his acquisition aftermath experience with us recently during a recent trip to Ho Chi Minh City last December, touching upon on key performance indicators and how they could be applied to startups too. It got me so inspired that I wrote a blog post to journal his thoughts. On the spot when we met, I invited him to speak at Startup Asia Singapore 2013 knowing that he has more knowledge to share. Thankfully, he said yes.

During his panel discussion at Ho Chi Minh City, Pom had less than five minutes. So at Startup Asia Singapore, we allocated 30 solid minutes to interview and dig into his experience on what he learned after Tarad got acquired.

Pom’s coffee chat interview is scheduled on April 5 from 3.00 to 3.30pm. Join us. We will see you on April 4 and 5 at Startup Asia Singapore.

Japanese B2B2C e-commerce company, Rakuten, isn’t new to Asia expansion. Besides Japan, to date it has operations in Taiwan, Malaysia, Thailand, and Indonesia. Its China venture, Lekutian, with Baidu, unfortunately, wasn’t as smooth. Well, admittedly, China is a tough market with local competitors like Alibaba Group’s Tmall and 360buy enjoying the lion’s share.

Nonetheless, Rakuten has remained focused in its Southeast Asia expansion, especially with a newly setup Rakuten Asia headquarters in Singapore. Rakuten has also recently confirmed with us that it has established a $10 million Rakuten Fund for Southeast Asia. The fund will strategically invest in startups which Rakuten believes will help in its e-commerce or online travel business.

Shin Hasegawa, director and assistant chief marketing officer at Rakuten Asia

There are still a lot of questions which we haven’t had the chance to understand from Rakuten Asia. Hopefully, we will be able to get some very good answers at Startup Asia Singapore 2013 where we’ve invited Shin Hasegawa, director and assistant chief marketing officer at Rakuten Asia, for a coffee chat interview. His session is scheduled on April 4, 11.00 to 11.30am, titled “Rakuten Branches Out to Asia.”

In that coffee chat interview, we’ll attempt to understand more about Rakuten’s expansion plans in Southeast Asia, its $10 million strategic fund, and also its plans (if any) to re-enter the China market.

If you haven’t grabbed your tickets, do so today, and join the crowd. We will see you at Startup Asia Singapore on April 4 and 5.

And of course, don’t miss any of the other speakers at Startup Asia Singapore 2013 either. That list includes:

• Kee Lock Chua (Group President and CEO at Vertex Venture Holdings)
• Ole Ruch (Managing director APAC at Airbnb)
• Steve Melhuish (Co-founder at PropertyGuru)
• Stefan Jung (Co-Founder and Managing Director SEA, Rocket Internet)
• Nobuaki Kitagawa (Managing Director at CyberAgent Ventures)
• Daphne Lee (International business director at Taobao)
• Darius Cheung (Co-founder at BillPin)
• Tetsuya Mori (Managing Director at DeNA Asia Pacific Holdings)
• Evan Spytma (Regional Director at Popcap Games)

Following Rakuten’s new Asia headquarters in Singapore, the Japanese e-commerce giant has launched a US$10 million fund in Southeast Asia to strategically invest in companies that will help them in its e-commerce ventures. Mr. Toru Shimada of Rakuten (4755:JASDAQ), who leads the fund, told me:

Within Asia, we already have e-commerce businesses in Thailand, Malaysia, Indonesia, and Taiwan and plan to expand further in Southeast Asia. We not only invest in startups in Asia but also make business synergies [with startups for Rakuten’s] business.

Specifically, I was told that the type of startups that Rakuten Asia is looking for are those that are focused on e-commerce or e-commerce-related areas. It could be anything from social commerce sites with high traffic (like Pinterest) to mobile applications to e-commerce enablers such as marketing tools and solutions (like ReferralCandy), etc. Besides e-commerce, Rakuten is also keen to invest in online travel and digital content as it seeks to expand its portfolio in Asia.

The new Rakuten fund is lead by Mr. Toru Shimada, CEO and chairman of Rakuten Asia.

Yesterday we mentioned that Japanese e-commerce giant Rakuten (JSD: 4755) is opening a Singapore office to enlarge the company’s presence even more in Southeast Asia. But the Japanese company is also busy in the US where its Buy.com store will take on the new URL and name Rakuten.com Shopping starting this Thursday, January 31st.

Rakuten acquired Buy.com back in May 2010, and retained its name while making gradual transitions. The e-tailer’s announcement explains that the “Buy.com brand will continue to offer over 3.2 million products in 15 categories” within the rebranded Rakuten Shopping, which has over 16 million products in 24 categories. The Japanese company plans to offer new features to both merchants and customers this year for a better shopping experience on the site while also expanding its range of products.

OCRegister quoted analysts earlier this month in questioning if this move by Rakuten would prove to be a successful one. They reasoned that the three-letter domain name Buy.com is simply much easier to use and type compared to the rather Japanese name ‘Rakuten’. But Rakuten executives said that this move is needed to establish the Japanese brand globally.

For further details regarding the transition, you can see more details here.

Japanese e-commerce giant Rakuten (JSD:4755) now has a regional headquarters situated at One George Road in Singapore. The new Singapore office is set to take charge of Rakuten’s Asia-Pacific operations including marketing and regional expansions. Aside from its native Japan, Rakuten has e-commerce operations in Taiwan, Malaysia, Thailand, and Indonesia. However, its China joint-venture with Baidu didn’t turn out to be successful.

Rakuten’s head of Asia marketing, Shin Hasegawa, told me that Singapore was chosen because of its close proximity to other Southeast Asian countries, and access to talented people. Interestingly, Rakuten also chose Singapore as a base because it believes it is the gateway to interact with the region’s startups.

Rakuten does invest in startups. Most prominently, it was the lead investor in Pinterest’s latest financing round. Like most of its Japanese counterparts such as GREE and CyberAgent who have set up corporate venture arms to invest in startups across Southeast Asia, Rakuten could also follow the same path. When asked about the possibility of having a ‘Rakuten Venture Fund’, Hasegawa told me that it could potentially be part of the big plan. But regardless, Rakuten is already investing in startups whether or not there’s a dedicated venture fund.

Ideally, Rakuten hopes to create a global marketplace for anyone anywhere to buy items on Rakuten. But there’s still a long way to reach that goal due to fragmented logistics systems and payment solutions across borders. To date, Rakuten has over 38,000 merchants offering over 90,000,000 products. They are looking at countries like Vietnam and Australia but this is very much in the research phase. There aren’t any concrete plans which Rakuten can reveal at this point.

Besides online shopping, Rakuten also deals with e-books and an e-reader device. The Kobo platform and hardware, which was acquired by Rakuten in 2011, has no presence in Southeast Asia and we might just see it acquire or make deals with local partners with the right know-how. Three very interesting players come to mind: Ookbee (Thailand), Scoop (Indonesia), and WayangForce (Indonesia). Hasegawa declined to comment on the topic but agrees that interesting things might happen in the e-book space in Southeast Asia.

All in all, Rakuten understands that it’s new to this region and is certainly willing to speak to startups and investors to find out more about what’s brewing in the Southeast Asia tech scene.

It’s funny how KPIs can become so confusing when it comes to measuring performance on an individual level. Say for example, $10 million could be clear as an organization sales target. But in contrast, it would not be so clear for a sales person. It could motivate the sales team to reach that goal but often it doesn’t communicate exactly what a person has to do individually in order for the team to to hit that $10 million target.

At a recent startup conference at Ho Chi Minh, Vietnam, I had the privilege to learn from some very experienced entrepreneurs. One of them is Pawoot Pongvitayapanu who runs Tarad.com, and he shared a little bit about his experience of having his company acquired by Japanese e-commerce giant Rakuten.

Rakuten brought much discipline into his company. He mentioned repeatedly that one of the most important lessons he learned from Rakuten was to set key performance indicators (KPI) and make them understandable and actionable at individual level. So let’s take that $10 million sales target as an example. This organization target could be broken down into groups and then down to an individual level. For example, if John is set to hit $300,000 worth of sales, then what would it take for him to hit that target? To illustrate my point, I have assumed some numbers below:

• His deal/close rate is five percent
• The target per deal is at $10,000
• Each work day, he can speak to a maximum of three potential clients

According to the figures above, we can calculate that each month John can pitch a maximum of 60 times. So if he does that, he should be able to achieve $30,000 worth of sales (60 x 5% x $10,000). That means John should be able to hit his sales target in ten months if he works hard enough. With the figure broken down to an individual level, the numbers have now become actionable.

John now knows he is required to make a total of 600 sales pitches to hit his $300,000 KPI for the year. Anything above 600 sales pitches will give him a better chance to outperform his KPI. Most importantly, John can now see in more tangible terms that the figure is achievable.

Sometimes, goals are set unrealistically and it could be mathematically impossible to achieve them. For example, if John’s KPI is $500,000, then it’s practically mathematically impossible that he could hit the numbers. Based on his statistics, John can hit a maximum of $360,000 of sales in a year. Of course, along the way his closing rate or sales total could go higher, but from a management point of view, it’s better not to account for those chances.

Lastly, from a startup CEO point of view, breaking down KPIs to individual level can help you understand if you have enough manpower to hit the organization’s KPIs, and that’s a good way to avoid over-promising and under-delivering to your shareholders. The same principle can be applied across all kinds of KPIs which you might be measuring. Good luck!

From all of us here at TechInAsia, we hope you have a Merry Christmas, and that you achieve all your KPIs in 2013!

[Image credit: EPM Review]

I suppose given that many other companies have already launched smartphone payments solutions in Japan already, it should come as no surprise to see Japan’s e-commerce giant Rakuten (JSD:4755) jump in the game as well. Paypal previously announced its Paypal Here card reader for Japan back in May, and local startup Coiney has an offering too.

Rakuten’s new ‘Smartpay’ service includes, like the alternatives mentioned above, a hardware component that is plugged into a smartphone’s headphone port. You’ll need to have either the iOS or Android apps (see screenshots below) installed on your phone in order to accept payments by credit card, which are swiped through the attached card reader. Customers can also sign their names on the smartphone display to complete the process (see below). Rakuten will take a 4.9 percent transaction fee on each payment.

Both the hardware and software are free for merchants, although there’s an initial cost of 29,80 yen. (Update: Rakuten clarifies that 2,980 yen fee is actually for the hardware).

Earlier today we heard news from Rakuten that it would begin selling its Kobo Mini e-reader in Japan on December 18. [Via Techwave]

Rakuten’s (JSD:4755) subsidiary Kobo has announced that its Kobo Mini e-reader is now available for pre-order, with shipments starting on December 18. This one is a 5-inch e-ink device, available in both black and white, and able to hold up to 1,000 e-books. It will be priced at 6,980 yen, or about $85.

The timing of this release means that consumers have lots of tablet/e-reader options to choose from this holiday season in Japan. Amazon recently announced that its lineup of Kindles are hitting Japan, with the Kindle Fire models coming a day after the Kobo Mini ships, on December 19. Amazon’s Kindle Paperwhite went on sale in November.

And of course if we’re talking about ‘Mini’ form factors, we should also note that Apple’s iPad Mini went on sale in Japan last month as well, and the cellular model became available a few days ago.

Rakuten’s Kobo Touch was launched in Japan earlier this summer, apparently selling well in the early stages, although there was a subsequent speed-bump with a controversy surrounding user reviews. Kobo also offers the Kobo Glo e-reader in Japan as well.

ADS, Beauvais site

Japanese e-commerce giant Rakuten (JSD:4755) announced (pdf) today that it has acquired French logistics company Alpha Direct Services for an undisclosed sum. ADS has a number of services to offer e-commerce sites, including package delivery tracking, warehousing, customer support, order management, and robotic automation.

Rakuten previously acquired France’s e-commerce service PriceMinister, which now operates under the Rakuten Group umbrella. Pierre Kosciusko-Morizet, the CEO of PriceMinister explained what this latest move means for the Rakuten subsidiary, as well as the company as a whole:

By drawing upon ADS’ market expertise and cutting-edge warehouse automation technology, developed here in France, we now have the potential to build a truly global e-commerce logistics offering from the ground up. We are excited to extend the existing support offered to local merchants selling via the Rakuten PriceMinister marketplace and beyond.

This is Rakuten’s sixth acquisition in Europe since 2010. Its previous pick-ups include Play.com in the UK, e-commerce service Tradoria in Germany, and video service Wuaki.tv in Spain.

The company also announced financial results for the third quarter of the 2012 fiscal year today, which touched upon the ADS acquisition, noting that Rakuten hopes to introduced its technology into Japan. More details about Rakuten’s logistics strategy can be found in that report (pdf).

Rakuten was also active closer to home this past week, as it launched Rakuten Malaysia (Rakuten.com.my) on November 1.

I love it when big name entrepreneurs have blogs. There’s always interesting tips and stories to follow. This time it comes from Hiroshi Mikitani, the CEO and founder of Rakuten (pictured right), which is Japan’s e-commerce giant that invested in Pinterest early in May.

In his latest blog post on LinkedIn, Mikitani wrote that Rakuten’s e-commerce prowess may not have existed if he had listened to advisors who told him that e-commerce was a game he was too late to enter. He wrote:

When I began the process of founding Rakuten, I had more than one person advise me not to go into e-commerce. Many people told me the concept of the Internet mall was over, that shoppers were not interested in it. How did they know? It was, I was told, common sense. They were wrong about Rakuten, about e-commerce, and about the value of common sense.

Mikitani went on urging entrepreneurs to challenge advises given to them. I particularly like how he uses learning to walk as a metaphor to describe how an idea is never fixed, never right:

Consider a child, just learning to walk. That child will often stumble. The act of walking requires that one must lose balance and then regain it – putting one foot in front of the other. By repeating this process, you move forward. Progress in society or business moves much the same way. There is a constant forward motion, stumbling, regaining balance. Nothing is ever finished or fixed. Therefore, no one can ever declare his or her idea absolutely right. There is no absolute. Only the evolution of ideas.

If I’m interpreting it correctly, I think executing an idea is also part of the act of walking. If someone never executes, the idea will always remain a mystery, it will never fail but will never succeed either. That’s not moving forward. That’s remaining on square one. Even failure, most of time, will push you forward.

I’m quite a keen admirer of Mikitani and his Rakuten legacy. For folks who are interested, you can follow him on LinkedIn to follow his thoughts.

Photo: Salsabeela.com

This article has been updated with a clarification from Rakuten Belanja Online.

E-commerce is poised to grow strongly in Indonesia along side the ever-increasing number of Indonesia’s internet users. Frost & Sullivan research predicts that Indonesian web users will reach 175 million in number by 2016. Online shopping portal, Rakuten Belanja Online (RBO, meaning “Rakuten Online Shop”), the local version of the Japanese giant Rakuten, believes it can grab a bigger slice of the market in the country.

Rakuten’s user-base has grown five-fold recently, and new numbers revealed today show that it has 200,000 registered users and 300 merchants. As a result, the company’s revenue is up eight-fold in the space of one-and-a-half years.

Detik cites partnership development manager of Rakuten Indonesia, Budi Susilo, as saying that Indonesian e-commerce is still considered younger than countries like Thailand, South Korea, and Japan. But with the increasing number of internet users, online business prospects have a bright future. Budi also shared Rakuten’s strategy:

Indonesia is still a consumptive country, not just for gadgets. If there is a discount, everyone would buy. So for us, the discounts strategy is still a mainstay.

Update September 27, 13:54pm: Regarding the quotes above cited from Detik, we received some clarification on this from Rakuten Belanja Online. CEO Rio Inaba explains:

We are very excited by the explosive growth Rakuten Belanja Online has experienced since launching our service in Indonesia in June 2011. Our goal is to take the shopping mall experience online, providing consumers with the same fun and interactive experience they enjoy offline, but with the added convenience and security that online offers. We are not a discount retailer, but one of the great benefits of our model is that pricing tends to be very competitive. (Editor’s note: bold is ours)

[End update]

Today, Rakuten (JSD:4755) opens opportunities for small- and medium-sized enterprises (SMEs) and major brands to sell its products on Rakuten Belanja. It offers various packages and features to attract business owners as merchants. The Japanese company has a points-based feature for its consumers to collect point rewards which can be used to shop. It also offers things like cash on delivery (for those who lack credit cards), free shipping, and pick-up points in selected Alfa Midi supermarkets. Badi stated:

We want to create an online mall, and embrace a number of business owners to sell merchandise on Rakuten.com, thus increasing the variety of goods sold so we can meet the needs of consumers.

According to Okezone, Rakuten’s consumers are made up of 55 percent men and 45 percent women. In June 2011, sales were still dominated by consumers in Jakarta, accounting for 90 percent, and just 10 percent of consumers were from outside of the capital. But that imbalance is going away. By May 2012, the proportion of consumers from Jakarta and outside the capital began to balance out at the ratio of 55 to 45.

Rakuten’s strategy sounds no different than other e-commerce sites, however. The discount strategy is quite a common one seen across the Indonesian e-commerce sector. Either the discounts have to be large – or, more sustainably, the service has to improve a lot. As for other online malls, Rakuten is up against the likes of Blibli, Tokopedia, Multiply, and many more.

Having already invested upwards of $50 million on photo pinboard service Pinterest back in May, Japanese e-commerce giant Rakuten (JSD:4755) is now once again making an investment in a US startup. This time it’s Daily Grommet, and while the specific amount of the series B round was not disclosed, its interesting to see Rakuten involved.

Daily Grommet is not your typical e-commerce site, featuring a unique product (or a ‘Grommet’) each day with an infomercial-style YouTube video that creates a story around each product. While most of the videos are pretty interesting, the YouTube channel doesn’t have a huge amount of traffic though, with just over 428,000 views and 214 subscribers.

Interestingly, Daily Grommet is quite active on Pinterest too, asking its community for potential products to feature as Grommets.

Rakuten’s CEO Hiroshi Mikitani explained why Daily Grommet is a good fit for his company:

Our investment in Daily Grommet supports our overall global strategy of creating an enhanced consumer experience in e-commerce. Particularly in light of our recent Pinterest investment, we’re excited to be working with a company that shares our view of curating new, innovative and unique products across the web and the world.

Daily Grommet began in 2008, and since then it has featured over 1,000 products and companies, and noted in its announcement that it has already worked with Rakuten’s Buy.com to “expand Daily Grommet’s reach.”

You can check out one of the most recent featured Grommets below, a gourmet mushroom kit that recycles used coffee grounds.

Photo: jp.techcrunch.com

Forbes has announced its list of the world’s 100 most innovative companies, and at first glance there are a number of big surprises. Looking past Salesforce, which took the top spot, one might be surprised to find Chinese search giant Baidu (NASDAQ:BIDU) at number five, and then flabbergasted to see Tencent (HKG:0700), which is widely known for its blatant copying, as the 11th most ‘innovative’ company.

Before we all throw our challenge flags [1], I should clarify that Forbes’s methodology doesn’t quite measure innovation directly, but rather it says it is measuring how much investors bid up a stock price above its existing value.

At a fundamental level, the reason investors bid a company’s stock price above the value of its current business is that they are expecting new growth. They are expecting new income streams to emerge in the future. Where does most growth come from? Primarily from launching new products or services, or entering new markets. This requires innovation.

Maybe so, but I think Tencent also requires an asterisk.

But in all fairness, both Baidu and Tencent do appear to have interesting plans for expansion [2], and in that sense I’m sure anyone who invests in them will do well. Baidu’s big plans for mobile, even if a little delayed, are promising indications that the company’s success on the web can continue on mobile.

In total, China had seven companies in Forbes’s top 100.

Looking east to Japan, where eight companies made the list, Rakuten (JSD:4755) showed well in seventh place on the innovation rankings. While I don’t know if there are any technical innovations from Rakuten that really stand out in my mind, I do like its expansion plans as well, particularly its strategy of acquisitions and sharing know-how and feedback between regions. Nintendo, who hasn’t really innovated much of anything since Wii [3], is ranked 45th.

As for other Asian companies on the list, India had five companies ranked, including Infosys. Surprisingly, no South Korean companies made the cut.

Apple and Google were ranked 24th and 26th respectively.

E-commerce giant Rakuten (JSD:4755) recently announced that it has acquired a majority stake in popular coupon website Shareee.jp to the tune of 70 percent of its shares. Shareee will continue to operate its service together with the existing shareholder Hikari Tsushin Inc.

According to Rakuten’s statement, Shareee is Japan’s third largest coupon website in terms of sales, specializing in restaurant and accommodation bookings and relaxation amenities [1]. According to Coupon-JP, coupon site Ponpare still leads the industry with about 1.14 billion yen (about $14 million) in sales for the month of August (see table below).

In the future, Rakuten wants to integrate its Anshin Payment Service and encourage the use of Rakuten Super Points. The company also hopes to “strengthen the coordination” between Shareee and Racoupon, which is its own coupon service which began back in 2010.

Rakuten’s other recent investments include the pickup of Spanish online video service Wuaki.tv back in June, and of course just before that in May was its now famous investment in social pinboard service Pinterest.

source: coupon-jp.com

The president director and CEO of Rakuten Indonesia, Rio Inaba spoke to Detik yesterday about Indonesia’s e-commerce scene, and shared a number of facts and figures about the industry and his company. Here is just some of the information he shared:

• Last year, 90 percent of transactions occurred in Jakarta. This year Jakarta only accounts for 55 percent, with the rest coming from outside the capital city.
• Based on gender, males still dominate among e-commerce customers, representing 65 percent. 49 percent of the customers are aged 20 to 29 years old.
• The e-commerce business share is still less than one percent compared to traditional offline businesses.

Rio concluded that there are good developments happening in other Indonesian regions, and that internet access is better spread and that people’s buying power is strong. He noted that what makes Rakuten different from its competitors in Indonesia is its positioning as a multinational e-commerce player. Rakuten is supported by many stakeholders including the Japanese government and its Indonesian business partners.

Rio explained that Rakuten’s membership has increased four-fold, and its total transaction value has grown by a factor of six. Its rate of transactions during the Lebaran holiday was also much better compared to last year.

Interestingly, Rakuten Indonesia also plans to focus on selling food and beverages online. At the moment the company has tied up deals with food vendors such as First Love Cake, Kato Coffee, and Kondo Rice. So far they sell food and beverages only in the Jakarta area.

[Source: Detik]

The company’s first venture abroad was back in 2008, back when e-commerce was a fledgling industry and the company’s reputation was only really well established at home in Japan. It was then that Rakuten looked to Taiwan to expand its B2B2C business, joining forces with retailer President Group – the operator of Starbucks, 7–11, and others in Taiwan – to establish a joint venture (51 percent Rakuten’s capital, 49 percent PG). Rakuten Ichiba Taiwan was launched in May of that year, with the company hoping its success in Japan would translate well to the Taiwanese market.

So how did that game plan work out? Initially, it didn’t go so well says Rakuten Taiwan’s CEO Yuichi Ejiri. The company struggled with all kinds of problems out of the gate, including brand recognition:

Rakuten Taiwan CEO Yuichi Ejiri

At that time 14 Japanese people came to Taiwan and just tried to copy everything from Japan. As you can imagine, it didn’t work and we changed a lot of things. For example the website design. Rakuten’s webpage now has changed; at that time they preferred more text not graphics or banners.

But in Taiwan they preferred more fashionable banner designs. At that time we did copy the Japanese simple, text-focused pages and the reception from the market was terrible. Many people said it looked like an old-age portal site. So we started changing piece by piece, now our page design is totally different than the Japan page.

Ejiri notes that even though Rakuten had changed its online public face, the basic logic that made the company successful at home still remained – the company’s expertise in improving things like conversion and click-through rates, this was still key to building its business in Taiwan in the early days.

In addition to wooing Taiwanese consumers, Rakuten also had the difficult task of acquiring new merchants to sell on its platform. In Japan the company was already established as an internet giant, and it didn’t have to work so hard to bring merchants on board and could do most of it online. But in Taiwan Rakuten was still a new brand, and so the company required more offline activities in order to acquire merchants, such as send forms or explanations, make calls from sales staff, or visit them in person.

Even today, years after Rakuten first arrived in Taiwan, the company still uses such methods, noting that Taiwanese merchants are more demanding. The result is a local management process very different from Japan. The brand is better recognized now however, and as Rakuten’s online application interface improves it hopes to gradually make merchant acquisition easier.

The company’s efforts with certain types of merchants have indeed paid dividends, particularly gourmet/food merchants. Ejiri tells us that Rakuten paid special attention to these merchants:

Most other platforms don’t want to take these merchants in, because it takes time to implement such internet shop operations. But we thought it was a big opportunity, because there are so many types of local food. So we intentionally tried to focus on these gourmet shops and sent a lot of sales people to go to the islands and the countryside to recruit all those unique food shops. It took a long time to teach them and also we did many tie-ups with gourmet websites and TV programs. But finally we are the largest gourmet e-commerce site in Taiwan.

The other big category for Rakuten Taiwan is women’s fashion. The Taiwanese e-commerce space began with online auctions and low-cost clothes of relatively high quality imported from China. Rakuten has catered to this market segment well, and currently nearly 80 percent of its users are female. The company has also begun heavily promoting men’s fashion and note that this sector is growing quite fast now as well.

Considering that Rakuten just recently launched its Kobo e-reader in Japan (though not without some difficulties), what about the prospect for e-books and other digital content in Taiwan? Rakuten Taiwan already has a headstart in a sense since its mother company, 7-Eleven, has the largest online bookstore (books.com.tw) with somewhere between 70 and 80 percent of the market. There’s a corresponding shop on Rakuten Taiwan with the name Rakuten Books. So it appears there’s a ready-made space for Kobo to fit in there.

Looking at the big picture, Ejiri points out that business for Rakuten Taiwan is growing 50 percent year on year. It currently has around 2000 merchants, over 1.8 million items, and 1.5 million users in total. But perhaps most importantly, I’m told that Rakuten Taiwan started being profitable as of a couple of months ago.

The next step I think is to create a kind of Rakuten ecosystem, like we have created in Japan. I think we can do the same in Taiwan, and that would be a great differentiator for us, and it should be a very different business model never seen in Taiwan.

While we don’t have any revenue figures for Rakuten’s Taiwan subsidiary, it looks like the group is making good progress since its initial entry into the market in 2008. One of the things that I like about Rakuten’s ‘Englishnization’ program (though I’m not a fan of that name) is that it facilitates good cooperation and communication between the company and its subsidiaries. So lessons learned in markets at home and abroad can have a greater impact. Indeed the company’s expansion plans have not been without the occasional speedbump, such as its Lekutian joint venture in China with Baidu which recently closed.

But like other Japanese internet companies expanding abroad, it is encouraging to see organizations like Rakuten actively looking to markets abroad rather than focusing on business at home and treating foreign markets as a bonus.

Following the launch of Kobo Touch in Japan we saw a tremendous consumer response. Unfortunately, some users were able to gain access to the system before our official launch timing of 15:00 on July 19th. Users began writing reviews and comments about the service that was not yet ready for public release. We then launched on schedule, but considering the review board had been populated by feedback not relevant to the actual service we decided to temporarily suspend the review board feature, which we felt was not fully reflective of the service at launch time and was misinforming consumers.

However, we understand that we did not meet the high expectations of our loyal customers. We have been listening to their feedback through our customer support center and having been working around the clock to resolve all outstanding issues.

So what can we make of this? It’s hard not to interpret this as being a sort of good news and bad news explanation from the company. First, it’s reassuring that the Kobo is ostensibly back on track, and with a decent explanation of why early users were running into problems. But on the other hand disappearing all those previous user reviews (see Google cache here) into oblivion without any explanation or asterisk on the current Kobo page/site is not going to win the company any transparency awards [1].

The company points out that this situation is, in a way, unprecedented in that it is dealing with its own product. And if the early reviews were indeed ‘misinforming customers,’ I guess there is a case to be made for doing something about those reviews. In my opinion, however, users do deserve an explanation for what happened to the reviews they submitted.

Since Rakuten (JSD:4755) and Kobo Inc. showed off the Kobo Touch last week, the device has apparently been in high demand among Japanese consumers. According to Kobo Inc., the device is now the top selling product on Rakuten, although we’re not sure exactly how many pre-orders have been made. The Kobo Touch officially launches on July 19

But the Kobo was pushed quite heavily by Rakuten, and I can attest that over the past week I’ve seen their Kobo commercial as a pre-roll ad on YouTube more than a few times from here in Japan (see below). And in addition to Rakuten’s online mall (Rakuten Ichiba) and Rakuten Books, the Kobo will also be available via electronics retailers, and for ‘touch-and-try’ sessions at bookstores.

The device is quite affordably priced at 7,980 yen (or about $100) although it remains to be seen what kind of price tags we’ll see for ebooks. But Rakuten’s CEO Hiroshi Mikitani said that he was aiming for a win-win relationship with publishers. It will be interesting to see whether or not this means a win for consumers as well.

Rakuten acquired Kobo for $315 million late last year.

Photo: gpsbbs.zol.com.cn

As someone whose news reading is primarily wrapped up in the technology here in Asia, I don’t really spend as much time as I should keeping up on regional politics. But recently there were a few examples that came to my attention which reminded me that, when it comes to China in particular, politics and business are often far more intertwined than we might realize.

We recently wrote about Baidu’s new social service which (though it’s just a ‘coming soon’ page) looks poised to launch in Vietnam soon. One of our Vietnamese readers noted that, even though it hasn’t even launched yet, there is a backlash among some Vietnamese people about Baidu. She noted that due to the Paracel Islands dispute, “Vietnamese netizens don’t respond so kindly to anything originating from China.” I was aware of the dispute, but I had not anticipated that netizens in Vietnam would extrapolate that issue onto Baidu. That’s unfortunate.

Similarly, at a Rakuten press conference last Friday, that company’s president Hiroshi Mikitani cited some political issues between Japan and China as a reason why they could not market their Lekutian (or Rakuten.cn) service very heavily [1]. That service, a joint venture between Rakuten and the afore-mentioned Baidu [2], subsequently closed by the two companies, with “intensified competition” in China’s e-commerce space cited as the main problem.

I wonder though, if Rakuten had not been hampered by those political issues, might it have made a difference? Possibly not. China’s e-commerce space is a fierce battleground as Mikitani himself acknowledged this past Friday. And recent price wars are making it increasingly difficult for any new player to compete.

So what can we learn from these two examples of web services getting tangled up in political shrubbery? Well aside from the fact that I need to get my head out of my butt and read more politics, I think it’s not a stretch to say that China’s ‘kindergarden sandbox,’ ram-tastic diplomacy has spawned emotional land mines that are not just a danger for international companies operating in China, but also for China’s own companies abroad.

Over to you, Joseph Nye.

When Rakuten (JSD:4755) announced back in May that it would lead an investment round in Pinterest, the company’s CEO Hiroshi Mikitani noted that he looked forward to introducing the service to the Japanese market. To that end, the online retailer has just rolled out Pinterest’s ‘Pin it’ buttons on some of its Japanese web properties so that users in that country can easily pin images they like to the social site.

According to the announcement, we can expect to see Pinterest’s presence on the Japanese web growing soon:

Rakuten and Pinterest will further enhance their alliance in the future, with plans to accelerate the rollout of Pinterest’s services in Japan. As a first step, however, a “Pin It” button will be added to Rakuten Travel, Rakuten Recipe and Rakuten Ichiba, the largest internet shopping mall in the country.

As we often see when companies introduce new foreign services to Japan [1], Rakuten has added a ‘How to Use Pinterest’ section on its website, giving a brief explanation of what it is and how it can be used.

On a somewwhat related note, readers may recall that Japanese clothing retailer Uniqlo recently used Pinterest in a rather creative way to promote a new line of t-shirts.

[h/t to CNet Japan]

Rakuten's CEO Hiroshi Mikitani with Kobo e-reader

At a press conference in Tokyo this afternoon, Japanese e-commerce giant Rakuten (JSD:4755) announced that its e-reading service will launch in Japan on July 19 for the price of 7,980 yen (or about $100 dollars), with a ‘fully localized’ experience. On that day, you will be able to access kobo.rakuten.co.jp, which will feature local content and authors, available for purchase in local currency. Readers may recall that Rakuten acquired Kobo for $315 million late last year.

The Kobo Touch will use the ePub 3.0 format, and Rakuten’s CEO Hiroshi Mikitani more than once emphasized the words ‘open standard’ during his presentation today, at one point noting:

This is not about ‘Galapagos,’ I think we need to work to get Japanese content overseas, with an open global content standard. We struggled with choosing a format but ePub 3 was the answer.

Mikitani spoke in very grandiose terms today; with his words describing something he sees as more than a product launch, but something with societal implications for Japan and the world. He emphasized that in neighboring Korea content is being exported and as a result new industries are growing. He notes that in Japan, there are many problems with Japan’s content not reaching people outside Japan, and said that this was an important issue because Japan “has a lot of content to be proud of”. He also continually mentioned that reading was in decline in Japan, referring to it as a sort of crisis at one point, noting that younger generations are preoccupied with mobile phones and games.

Kobo has 9 million users in 190 countries, and currently 2.4 million titles available. Mikitani noted that they are targeting 1.5 million Japanese books, and thinks that this is achievable. During the Q&A session, he was asks about which publishers his company has partnered with, and while avoiding specifics, his reply sounds like they are making good progress:

We are not disclosing that information yet, but almost all publishing companies are cooperating. Timing may differ [...] but almost all publishing companies are talking with us, and most of them have signed contracts.

He also pointed out that Rakuten’s strategy is to incorporate a win-win model with publishers, rather than an adversarial one. This will certainly be tricky as Japanese publishers are notoriously protective of their content. But hopefully Rakuten can make progress and deliver content at a cost which is reasonable to the consumer.

The company also will have touch-and-try booths set up in book stores and other retailers in Japan, so that customers can test out the Kobo before they purchase it. Mikitani also said that users will be able to use their Rakuten IDs to buy books from the Kobo ebook store. They can also gain Rakuten super points by buying, and use these to buy books too. Users can read books across multiple devices, and they will support iOS and Android in near future. He added that regarding tablets, he’s like to say more but noted with a smile “Please give us a little more time.”

Amazon's Kindle will soon be seen in back pockets in Japan too

According to The Asahi Shimbun citing unnamed sources, Japan’s Finance Ministry is planning to impose a consumption tax on e-books from non-Japanese companies. This comes in the wake of Tuesday’s news that Japan’s Diet approved a legislation to double the current 5 percent consumption tax to 10 percent by October of 2015. And if that tax were applied only to Japanese internet vendors, they would be put at a clear disadvantage from overseas competitors.

This discussion comes at a time when Japan’s e-book space is beginning to heat up, with Amazon’s Kindle coming soon and Rakuten’s Kobo just around the corner. Finance Minister Jun Azumi was quoted today saying:

We must seek to ensure fairness over taxation on online content sales so that companies at home will not be put at a disadvantage. […] I hear it has become a reason for domestic industries to move their bases overseas.

Like Japan’s anti-copyright law revision we told you about earlier in the week, this is another example of lawmakers struggling to keep regulations current with changing technology. This, of course, is not a problem unique to Japan. But the nations content owners have been extremely protective when it comes to intellectual property and the profits to be had from digital distribution, so it will be interesting to see how lawmakers will react on this front, and how quickly (or slowly) they will do so.

At the Foreign Correspondents Club of Japan, Rakuten (JSD:4755) CEO Hiroshi Mikitani gave a talk on the progress of his company’s ‘Englishnization’ program. Below are his comments, recorded as accurately as possible, but not quite verbatim.

#12:39: Usually I talk about the internet, but today I’d like to talk about our ‘englishnization’ program.

#12:44: From day our our vision was to become a number one global internet company. But as we moved on I felt we were missing something. We had to use translators to talk to employees for our foreign subsidiaries. And then I had an ah-ha moment that we everyone could speak English. But some thought it was too difficult, to hard to enforce. But one thing that pushed me to move forward, was our experience with our foeign employees in Japan. We hired foreign, Chinese or Indian employees, and they learned Japanese in three to six months sometimes, becoming very fluent. I thought, why can’t Japanese people do this. And I thought if we could communicate in English for a substantial amount of time then we could do it.

#12:48: The objective of the program is how to ensure our best practices can go worldwide, and how to bring our benchmarks world wide. [...] Would would also like to hire global talents. 30 percent of our fresh graduate hires are foreign employees. Some from Japanese universities, some from overseas universities. [...]

#12:53: Up until the middle of last year, we were pretty confident about this. Harvard Business School ran a case study about this, and the discussion was very hot — some students got emotional about it. So many employees are struggling, and are stresses. So felt we needed to help them. We provided classes, part of their official assignment — not for after work.

#12:54: In my ‘Englishnization’ book I wrote about the challenges we faced. It was not easy for me, not easy for my employees. They have worked very hard and overcome many challenges. I’m hoping this is the beginning of a trend. I’m going to donate the income of my book to Tohoku people, and I hope this book will be of some help to open up the eyes of Japanese business community and Japanese society.

#13:00: I’m surprised that many Japanese bureacrats are reluctant to speak English. [...] I would encourage people to not be afraid to speak in front of others regardless of their English level.

#13:04: (On Chinese language) I’m learning Chinese, I’m struggling the tones are difficult. I think Chinese and English are fundamentally different. Chinese people are learning English too, their level is much higher than the [average] Japanese people. If Chinese later becomes the standard for English, then of course, we will need to switch.

#13:06: Before this project we had to select employees who could travel overseas. But we don’t need to do that anymore.

#13:07: Of course there are lots of problems (for Japan) but English is a critical problem. Some say we are the only competitor to Amazon [...] but without English, it’s very difficult to compete on a global level.

#13:09: Lack of English communication skills really prevented us [Japan] from being a global leader, so we really need to wake up and open up our eyes.

#13:10: I would like to help Japanese schools and society, educate in English in a more useful way. If you calculate how many hours Japanese people spend currently [inaudable] it’s a huge issue, and its a big waste of time. I’d like to change the English education program to a more useful one.

#13:13: Regarding Pinterest, I just visited their office and sat with Ben Silverman and talked about my business. And they sort of share our vision for the internet. THey visited our office and met our staff. They got the impression that we are different, and that helped to get us aligned.

#13:14: (on Kobo and Rakuten getting into hardware) We are not focusing on selling hardware but rather selling content. What is important is how to create an ecosystem and combine harware and software, content and maybe financial services.

#13:15: (Are you admired by Japanese companies, or seen as a maverick) It’s a difficult question. I hope so, but maybe not. When I was working for the Industrial Bank, nobody left to start up a company. The reason I did it was I felt we needed entrepreneurship here. The more I succeeded, the CEO noted that ‘the more you succeed the more people will leave’. So I think I contributed. [...] It depends on how we succeed, I think we have already changed the attitudes of university students. [...] The younger generation now understands that they have to study English.

#13:20: Two years ago e-commerce was taking off in Europe, especially in the UK. But our concept of small shops was very unique. And we tried to apply that model to Price Minister. We sent many junior people to France and they came to us. Now they use the B2B2C model. Another good [benefit of Englishnization] is that if our foreign staff come to visit, they can come and sit in our working hall. Before we had to segregate them and get translators. But now they can just com.

#13:24: (When asked about merchants who don’t speak English) There’s an English site on Rakuten, and I would recommend you to buy over there. Eventually we would like to do so, but we are a marketplace, and we cannot force our shops to learn English. But gradually we could introduce cloud base translation, but we have to justify the cost — sometimes the cost could be more than the product itself.

#13:26: Our intention is to export Japanese working culture to other countries. I don’t think language has anything to do with with working culture. Many people say that if we speak English we will lose some culture. But I think English will help us show our strengths globally, show our assets all over the world.

#13:28: I don’t have exact numbers, but more than 50 percent of our staff are female. For management I think we’re father ahead than Japanese counterparts. For top level executives we are still having a challenge, I don’t have exact numbers, but I think maybe 30 percent. But we are definitely trying to diversity our executives.

#13:30: (On how much time employees spend studying) It depends on each individual, but if we use English while working and they are exposed to English for 8 hours — 100 days, 800 hours — but the reason I can speak better than I used to is because I speak English in our company as well.

#13:32: (On expanding to China) Unfortunately we have already withdrawn but it doesn’t mean we have given up. We’re going to go there in the future. The biggest problem in China is a structural issue, all these western and Chinese VCs have invested lots of cash into growth and they keep discounting and are selling below their acquisition price. The reason why its so competitive is because VCs have invested so much there.

#13:34: When you think about how much vocabulary you need for work, it’s not very much as most of the business is very routine. They struggle initially, but I have seen drastic improvement over the past few years. It’s a matter of short term cost versus long term impact.

#13:36: I don’t think we have anyone who disgrees with the intention of our project anymore. Because we have seen the huge benefits of the project and they can feel that it’s beneficial for their work. This has become a sort of given. But there was [some resistance] before. So we had to try to convince and encourage, and we had some internal marketing campaigns for that.

Japan’s e-commerce giant Rakuten (JSD:4755) announced today that it has acquired Spanish online video service, Wuaki.tv. This deal came as a bit of a surprise to us, as the online video business doesn’t really seem to be within Rakuten’s usual scope. But perhaps that’s why it makes sense.

According to the announcement, Wuaki.tv already had partnerships in place with major content providers and TV manufacturers. And if you consider for a moment that Amazon, one of Rakuten’s main competitors in the e-commerce space, also deals in media/content distribution, then this deal suddenly doesn’t look as strange.

Rakuten’s CEO Hiroshi Mikitani elaborated on why the Spanish company was an attractive target:

The Wuaki.tv management team and technology are both very strong, as is the number and strength of its relationships across the video and hardware industries. We saw synergies in the ambition of both businesses to expand internationally while video on demand extends our digital goods offering. We also both believe the opportunity for video on demand services across Europe, as well as further afield, to still be in its infancy – particularly when looking at media consumption via mobile connected devices and eReaders.

Rakuten has been gobbling up a wide range of web properties across an equally wide range of regions. In Europe alone it has picked up Tradoria in Germany, Play.com in the UK, and Price Minister in France.

The company made big headlines just one month ago when it led a $100 million investment in Pinterest.

For the last panel of our two-day Startup Asia Jakarta conference, we’ve aggregated an expert panel discussing on the e-commerce landscape in Indonesia. The panel was moderated by Andi S. Boediman, director at Idesosource along with the panelists listed below:

• William Tanuwijaya, Co-founder of Tokopedia
• Tesong Kim, Director of PT. Rakuten-MNC
• Remco Lupker, Co-founder at PT Tokobagus
• Daniel Tumiwa, Country Manager at Multiply Indonesia

#16:30: Andi: Is e-commerce a hype in Indonesia? Daniel to introduce Multiply Indonesia

Daniel: Currently we provide to payment and logistics, and protection for users who buy online, so we can build trust in the market.

#16:32: Andi: How is tokopedia different from other marketplace?

William: It is a C2C marketplace. We launched in 2009. I don’t believe e-commerce is a hype. Since day one in Indonesia where we adopt e-mail and friendster to promote services. Then Facebook came along, where they could tag people. It was a natural process to buy and sell things online. It is about the internet users becoming more educated, given that there are more choices, they can choose.

#16:34: Andi: How is the user traction, and is it up to expectations?

Tesong Kim: I am here already two years to expand to Indonesia. Business prospects is pretty good. It is much better than we expected. Combining expertise from Rakuten and MNC, we are close to being the number one in Indonesia.

Andi: How big is your transaction on your site?

Tesong Kim: Tough question. Compared to last year, the transaction has increased 20 folds, and for traffic growth, it grew 8 folds.

#16:36: Remco: We’re bringing buyers and sellers together. The market is pretty much premature yet. It is still difficult for people to click the button, and make that transaction.

Andi: Are you making money from media or?

Remco: No from the investors

(Laughter from audience)

Andi: How do you see yourself in three years?

Remco: There is an outstanding gap between the first and second place finishers. You should not over-advertise your site. It is annoying to your users.

Andi: Does the TV commercial translate to transactions?

Remco: Definitely.

#16:39: Andi: You had a very strong campaign previously. You offered free shipping. Tell us more.

Daniel: We currently charge transaction fees, and track how each transactions. For consumers are all about trust. Once they get the notification that they are able to track the order process, they will come back again to shop with us. Once they find a trusted marketplace, and if the price is right, they will come back. They are more concerned on how the good arrives safely in their hands.

Andi: The challenge is on the logistics fulfillment.

Daniel: We’re developing as the market develops. The eco-system is building nicely. The banks now have internal targets in place to meet for e-commerce. It’s amazing to see the changes in the last three to four months.

#16:34: We support and educate the merchants to do the order fulfillment.

#16:37: As a C2C marketplace, it’s about managing expectations. Only valid buyers can sell on our marketplace. If one seller has received a very bad review, it is impossible to generate another return.

#16:45: The reason why we jumped into the business is to address this problem. After that we realized there is a lot of problems. For Tokopedia and Multiply, you need to invest in IT infrastructure. There is very limited courier services here in Indonesia. Here in Tokopedia, 10 to 15 percent of transactions are actually going to logistics.

#16:46: Andi: I heard Rakuten has a different logistic solution. I heard you can pick up from convenience stores.

Tesong Kim: Yes, the logistics here is pretty terrible. We have our cash-on-delivery driver, and last year we launched convenience stores collection. You can choose our select 24-hour convenience store and pick up your goods.

#16:50: Daniel: IDEA (Indonesia E-Commerce Association) is up there to deal with common issues – payment, regulations, consumers – anything that is related to the industry. It is very tough because in Indonesia, the power is in the country’s chaos. They find ways to sell something. The fastest way is to sell online. There are many issues here. There are security issues, fraud, money laundering issues. The government has to regulate such things and the government would need to discuss with communities.

#16:54: Andi: How do you address imitations?

William: As a user-generated content provider, it is difficult to discern. Only B2C platforms can address such issues. Since it is an individual to individual transaction, there is little that can be done. What we can do is to put in regulations to remove imitation sellers on the platform.

Remco: We recently banned selling of counterfeit items. You can definitely detect counterfeit items, especially when there is a disparity of prices. With the removal of counterfeit items, it increases the value of the products on the website.

#16:57: Tesong Kim: We secure real products, and eliminate counterfeit products. We want to keep our website secure and clean. I think there is two sides demand. There are always people who would want to buy the cheapest stuff. There are so many rich people here in Indonesia and they want to buy real stuff.

#16:59: Andi: How do you guys differentiate yourselves from competition? How do you convince merchants to set up shop on your portal?

Tesong Kim: Our concept is shopping is entertaining, and we make our content really sticky. Our content pages are really long, and our conversion rates are quite high. The biggest benefit for us to keep this stickiness is through point systems. With one single user ID, you can use the points accumulated on other services.

William: We are very local. We try to solve the problems within the e-commerce scene. In 2009, there were skeptical comments about transacting online. We provided escrow services. When we convince traditional merchants to use Tokopedia to sell their products, we make it extremely easy to sell. All they need to do is to put a price tag on the product and they can immediately sell them. We always ask how we can help the merchants and enhance consumer experience.

Remco: Focus on the quality content. Next, an enjoyable shopping experience – simple, easy-to-find products in your city, and follow-up. And marketing too.

#17:05: Remco: In 3 – 5 years, we will become the biggest. Because the market is huge, competition can exist. I’m definitely positive about the e-commerce market here in Indonesia.

Tesong Kim: (On vision) It is going to grow for e-commerce. People never stop buying, and mobile is coming up. It depends on infrastructure, and hope the banks will change the mindsets.

William: In the next two years, it will be more advanced, people will be more educated.

Daniel: If regulations are made to support, it will be a very different outcome. The future will be huge.

Andi: In summary, we all believe in e-commerce, and it’s time to invest now!

This is a part of our coverage of Startup Asia Jakarta 2012, our startup event running on June 7 and 8. You can follow along on Twitter at @startupasia, on our Facebook page, on Google Plus, or via RSS.

Japanese e-commerce giant Rakuten (JSD:4755) has been pretty busy of late, just a week ago announcing that it would be the lead investor of Pinterest’s next funding round. Today the company has some more news for us, disclosing that it has plans to launch an internet shopping mall for Malaysia.

The store’s home on the web will be Rakuten.com.my, although it’s actually scheduled to launch in late 2012. Masaya Ueno, Rakuten Online Shopping’s president and CEO noted that now is the right time for the company to enter the Malaysia market, as it has a good e-commerce infrastructure:

The market indications validate our timely entry into the market. At this initial phase, Rakuten seeks to partner mid-sized and large retailers across industries in Malaysia including fashion and apparel, IT and electronics, books and luxury goods. […] We aim to foster continued e-commerce growth in Malaysia by transferring our knowledge and helping retailers to make online shopping a truly viable and sustainable business, leveraging on our 15 years of e-commerce expertise.

Rakuten notes in its announcement that the relatively high internet penetration in the country should be conducive to growth in online shopping. It says that internet retailing in the nation was at RM842 million (or $267 million) in 2011.

This is the latest in a series of international moves for Rakuten recently. The company also launched an online shopping mall in Brazil just one month ago, but it also pulled the plug on its venture with Baidu in China around that time as well. In Asia, the other notable activities for Rakuten are its Rakuten Belanja Online in Indonesia, as well as Tarad.com in Thailand.

After Malaysia, what’s next for Rakuten? According to the company’s CEO Hiroshi Mikitani last year, the Philippines are also on the list of places where the e-commerce behemoth would like to set up shop.

All Things Digital is reporting today that it expects that Japanese e-commerce giant Rakuten (JSD:4755) will be the lead investor in Pinterest’s next round of funding, which is expected to be announced tomorrow morning.

Pinterest, of course, is the pinboard-style social photo service where individual users and brands alike can share images of things they want to show to the world. Pinboard is especially interesting from an e-commerce perspective as some brands have reported that traffic from Pinboard brings bigger spending customers than from some other social services like Facebook.

It should be noted that All Things Digital is citing unnamed sources here, so take this at face value for the time being. But ATD claims that Rakuten will be investing “upwards of $50 million in a $120 million round that values [Pinterest] at $1.5 billion.” The report also notes that Rakuten will likely help Pinterest convert pictures into purchases, drawing on its vast experience in e-commerce.

We’ve mentioned Rakuten quite a bit on this blog recently, as it folded up shop in China a few weeks back with its joint venture with Baidu was not quite going as planned. But then it then it opened up an online shopping mall for the large Brazil market soon after.

We’ve reached out to Rakuten for comment on this, but if this report is true, I expect we won’t hear much until tomorrow. We’ll keep you posted.

Update 16:11 JST: It’s a done deal, as Rakuten has issued a release just now. The CEO of the company, Hiroshi Mikitani, commented:

While some may see e-commerce as a straightforward vending machine-like experience, we believe it is a living process where both retailers and consumers can communicate, discover, and curate to make the experience more entertaining. We see tremendous synergies between Pinterest’s vision and Rakuten’s model for e-commerce. Rakuten looks forward to introducing Pinterest to the Japanese market as well as other markets around the world.

It was just last week that we saw Rakuten (JSD:4755) and Baidu pull the plug on their Lekutian e-commerce venture in China, citing “intensified competition” in the sector as the main reason. But today, Rakuten is back on the proverbial horse, opening an online shopping mall in another very big market, Brazil.

The new shopping mall can be accessed at Rakuten.com.br, and so far offers consumers in the country a wide range of products from Brazilian retailers, such as electronics, books, clothing, etc.

Currently there are about 79 million internet users in Brazil, which accounts for about 39 percent of its overall population of 203 million [1]. So there’s still lots of room for internet businesses to grow there, as more and more people gradually come online.

The company says that it aims to be Brazil’s number one online shopping mall. Rakuten will also provide its customers with access to its global e-commerce network, including Rakuten sites in other regions, including Japan. Rakuten’s CEO Hiroshi Mikitani added:

We aim to enrich the lives of the Brazilian people by providing fun, engaging and convenient shopping experiences through our online shopping mall. Rakuten will contribute to the growth of e-commerce in Brazil by empowering merchants and consumers through the power of the Internet.

Last summer when Rakuten acquired Brazilian e-commerce site Ikeda, the company noted that e-commerce in that country was forecasted to grow 18 percent each year. Just a few months later in September, Ikeda changed its name to Rakuten Brazil, and launched a beta version of Rakuten Shopping soon after in November.

In addition to the new shopping mall, Rakuten Brasil will also offer Rakuten EC Service, a continuation of Ikeda’s previous SaaS service.

Rakuten (JSD:4755) announced on its website today (pdf release) that the company would be closing the ‘Lekutian’ e-commerce venture that it had in partnership with Baidu (NASDAQ:BIDU) in China. Currently visiting the site at its domain Rakuten.cn, one is greeted with a message stating:

We at Lekutian hereby reluctantly inform you of the following important change. After the careful consideration of the management team, Lekutian will stop service as of April 27.

While expressing apologies and thanks to customers who have supported it so far, the company also notes that Lekutian points not redeemed/converted before the 27th will no longer be valid as of that date. So customers only have six days to use their points, because after midnight on the 26th, they’re worthless.

Rakuten also invites Chinese customers to visit its Global Market, which is, in fact, available in Chinese. As for the soon-to-be-closed Lekutian, it provides the following explanation of the closure in its announcement on its investor relations page:

[I]n the face of intensified competition in the Chinese e-commerce industry, Lekutian did not perform in line with our expectations. Following careful deliberation, both Rakuten and Baidu determined that closing Lekutian was in the best interest of all stakeholders.

The company adds that this will not have a sigificant impact on its finances, as the investment into the venture was less that it had originally planned. The Chinese press was had been reporting trouble with the Rakuten-Baidu joint venture earlier in the month. And as we see today, the Lekutian venture just didn’t work out.

Despite this setback, Rakuten has been expanding from its home base of Japan with a number or partnerships and acquisitions around the world. Rakuten will “continue to evaluate” opportunities in China, and it will be interesting to see how its next venture into China’s fiercely competitive e-commerce space goes, if it goes at all.

The Yomiuri Shimbun is reporting today that Japanese e-commerce giant Rakuten (JSD:4755) will cooperate with Japan Post to help sellers easily deliver to international recipients, and for a cost 20 to 30 percent lower than current rates.

The service will help shippers by letting them create and print necessary documents and shipping forms in order to send by registered airmail. The report quotes Rakuten’s president Hiroshi Mikitani as saying that his company “aims to achieve 10 trillion yen in terms of distribution by boosting international transactions.”

Rakuten has already extended its business overseas via investments and acquisitions in the past. The company has invested in Russian etailer Ozon.ru, acquired German e-commerce service Tradoria and France’s Price Minister, taken a 75 percent stake in Brazil’s Ikeda, and it launched in Indonesia as Rakuten Belanja Online.

In addition to improving Rakuten’s services for international customers, this partnership is important for a few other reasons. First, it helps many small business extend their reach, giving them the ability to sell to more customers around the world. And second, it should help Japan Post a great deal as the snail mail business isn’t quite what it used to be now that we’re in the age of the internet.

Late last year Japan Post also partnered with eBay, a similar deal that likely helped inject some life into its postal business.

La Miu, the Chinese lingerie brand and e-tailer, has secured its third major funding round, according to co-founder and VP Hao Jianyao. The finer details have not been revealed, and the series C funding will be complete by the end of the month. The financial backing is reportedly well into the tens of millions of dollars.

Last year, La Miu’s series B VC funding was led by DCM and totaled $40 million. Series A backing in 2009 came to $5 million, led by the Japanese triumvirate Rakuten (JSD:4755), Daiwa (TYO:8601), and Lotte; the startup’s seed funding in 2008 came mostly from Japanese sources as well.

LaMiu.com is not just an e-commerce site, as all its underwear – and a new range of casual outdoor wear as well – is designed and manufactured by the company. It’s a model that was taken and run with by China’s Vancl with its own-brand leisure-wear.

We talked to La Miu’s other co-founder, Dong Lu, who’s the CEO, last November, when he told us how he envisaged a sort of luxury shopping experience like Victoria’s Secret in the US – yet more affordable and accessible as well. A move into Japan is being planned for this year.

Just a few days ago, a lingerie-oriented Indian e-commerce startup, Zivame, secured some series A funding, proving that mid- to high-range lady’s underwear e-tailers are of big-time interest to investors right now.

[Source: QQ Tech news - article in Chinese]

JKT48, the sister Indonesian idol band of Japanese girl group AKB48, is promoting Rakuten Belanja Online, the joint venture between the Japanese e-commerce platform Rakuten and media giant MNC Group. Since Chinese New Year, the JKT48 girls can be seen in a TV ad campaign for the Indonesian online mall.

In the 30 second commercial, the girls of JKT48 are larking around (see the video below) in the dressing room, apparently shopping on Rakuten on a laptop, and more. The point is to promote the range of women’s clothing and accessories that can be bought on the Indonesian version of the site. Which is why the store’s logo is everywhere in the video. There’s also AKB48 special merchandising on sale to tie-in to this promo.

This traditional marketing campaign proves that the joint venture with media moguls MNC, which has three TV stations, is a big boost for Rakuten (JSD:4755), allowing it to reach out to some of the country’s consumers who might be reticent about e-commerce. The JKT48 girls, which are buzzing among teens lately, were seen as the right models to represent Rakuten; it’s also apt that there’s a Japanese music connection between the group and AKB48.

The million dollar question is does an e-commerce site needs to have a TV commercial?. Tokobagus, one of the several key players in online retailing in Indonesia, launched a TV Ad campaign early last year and again at Ramadan. The company’s site is now ranked 23rd among Indonesian websites according to Alexa, but even Remco Lupker has questioned whether it makes sense to spend that much on TV ad campaigns. What do you think? Anyway, here’s the TV segment:

Japanese online retailer Rakuten announced today that it has agreed to acquire eReading platform Kobo, a Canada-based company, for $315 million. Rakuten chairman and CEO pointed out that Kobo’s social integration was a key component in the pick-up:

We are very excited about this next step. Kobo provides one of the world’s most communal eBook reading experiences with its innovative integration of social media, such as Facebook and Twitter; while Rakuten offers Kobo unparalleled opportunities to extend its reach through some of the world’s largest regional e-commerce companies.

Rakuten has been expanding its business globally through a number of acquisitions this year, including PriceMinister in France, Tradoria in Germany, Ikeda in Brazil, Play.com in the UK, and investment in Russia’s Ozon.ru to name a few. It also launched Rakuten Belanja in Indonesia back in June (see our interview with its marketing head Doddy B. Ekaputra).

In Japan, Rakuten has previously opened its own eBoook website, Raboo, a few months back, and cooperated with Panasonic to open the platform on the UT-PB1 tablet. But it will be interesting to see how the company runs with the Kobo platform moving forward.

[Kobo via Venturebeat]

Connected globally: Twitter during the Japan earthquake

There’s an interesting new report out from report from KPCB on internet trends. Among other things, the report ranks 25 top global companies according to 2011 market value. While more than half of the top companies in that group are from the US, Asia is well represented.

From China we have Baidu at the top with a $46 billion market value. It’s followed by Tencent, Netease, Alibaba, Ctrip, and Sina in that order. For Japan, we have Yahoo Japan and Rakuten representing, while NHN (which operates Naver) in the lone Korean company to break the top 25.

Citing comScore, KCPB’s Mary Meeker says that 81 percent of users of top websites are outside of the US. It also points out that in three years (2007 to 2010), China has added more internet users than the USA has in total (246 million vs 244 million). Of course, as we recently reported, the total amount of internet users for China now stands at over 500 million.

Here’s a chart showing the top 25 companies ranked according to market value, according to the report. Click on each one to view 2011 market value in billions and 2010 revenue in millions (in parens). If you have trouble viewing, here it is as a static image.

Tencent’s huge new B2B2C e-commerce platform is on course to launch in October, according to the Chinese media today. Tencent already has its own online shopping site, Paipai, but with the new platform the company will bring on-board numerous established partners to make it a challenger to Alibaba’s brand-driven TMall.

According to Chinese tech site DoNews, Tencent’s initial partners include OKBuy, 51Buy, and the online jewelers Kela.cn.

With these tie-ups, and an emphasis on B2C, it seems Tencent is aiming squarely at TMalls, as well as at Baidu’s joint-venture with Japanese online retailing giant Rakuten.cn.

Tencent had earlier stressed that its new platform would primarily cover clothing, cosmetics, and general consumer goods. With that in mind, it’s possible that future tie-ups with Walmart-backed YiHaoDian, or the catalogue-style clothing brand Vancl, might be on the cards.

I don’t believe that a name or a URL has been set for this new venture. I’ll update you closer to the launch.

[Source: Donews - article in Chinese]

Japan’s online retail giant Rakuten just announced that it has invested in Ozon.ru, a Russian e-commerce service. According to Rakuten’s statement, Ozon has 5.2 million registered members.

This is not the first time Rakuten has explored the European landscape. readers may recall back in July when we reported about the company’s acquisition of Tradoria, an online shopping site in Germany. Back in 2010, it acquired Price Minister out of France.

Rakuten CEO Hiroshi Mikitani remarked:

We are pleased to form this partnership with OZON.ru. They have committed leadership, a talented team and a deep understanding of the Russian market. OZON.ru has built a highly successful e-commerce ecosystem and has focused expansion plans.

If recent figures from comScore are to be trusted, Rakuten has the fifth largest audience among the world’s global e-commerce elite. Only Amazon, eBay, Alibaba, and Apple have more reach. That same report showed that the company’s audience, while primarily Asia based, is significant in Europe at nearly 20 percent.

I am a fan of the Nikkei; I read it every single day. But this smartphone theory makes me skeptical. After all, Japan has arguably the most advanced mobile environment in the world, with 3G Internet use on phones for the last ten years. Surely online shopping was prevalent before the recent introduction of smartphones. It turns out it was.

According to a survey by Net Asia (Japanese) in January of this year 57.5 percent of mobile users have experience shopping online via their phones. There is certainly still room for growth but the experience is not novel to the smartphone.

Also, according to comScore (Japanese), by the end of fiscal 2010, there were just shy of 10 million smartphones in Japan. If the year-on-year 230 billion yen sales increase is attributed to these 10 million users — which of course the Nikkei isn’t strictly suggesting, but bear with me–the average revenue per user is 23,000 yen ($300). This is not inconceivable but it is highly unlikely.

The Rakuten Android apps

Of course e-commerce sales’ increase is a result of many factors. But the implication that smartphones play a major role is an interesting notion. Especially since the suggestion is that smartphones are driving sales in addition to those from PC purchases instead of just eating from PC’s share.

So what is it about smartphones that stimulates e-commerce? That is a question deserving of its own post. My best guess is smartphones support impromptu purchases. Also, as Rakuten has implemented in its smartphone apps, the ability to scan barcodes in brick-and-mortar stores and purchase cheaper goods on the fly aids sales.

While I am hesitant to give smartphones too much credit for the last year in e-commerce sales, their potential is undeniable. With the smartphone market share at about ten percent, Japan is positioned at just the beginning of the smartphone boom, making the outlook for online stores even better.

[Photo credits: Gapis, smallbusinessfriends]

The Raboo platform opened earlier this month, but so far has only been accessible via Panasonic’s UT-PB1 tablet.

For users who don’t yet own one of these tablets, e-book titles marked with a green label can be previewed through flash-enabled browsers via the Chira Yomi service (see below).

At this early stage, it’s a little tricky to visualize where Rakuten is taking the Raboo platform. But a representative tells me that a connection with Sony’s e-book reader is expected sometime this year.

As we have said before, Rakuten is one of many Japanese companies who have set its eyes abroad of late. And while this Raboo platform looks like a great addition for digital bibliophiles in Japan, the company is “examining expanding its e-book service overseas in the future.”

Despite the newness of Tokopedia it has made some remarkable achievements. Not only has it become a trendsetter in Indonesia’s e-commerce landscape, but it has put up some fascinating numbers for a company of its size. For example, total transactions recorded during the second year were Rp36.031 billion (US$4.2 million). That’s up significantly from last year’s Rp5.954 billion (or about US$697,000). In other words, the total value of transactions for its second year is about Rp30 billion (US$3.5 million) – that’s an increase of six-fold compared to the first year.

According to William, Tokopedia’s success cannot be separated from the loyalty of its users. Even though the userbase is still small, they keep coming back to shop in its online marketplace. As of August 17th, there are 100,857 active users and 11,426 active sellers on Tokopedia. Both figures more than doubled compared to last year.

William also found some interesting problems unique to e-commerce in Indonesia, but he couldn’t elaborate since the company is currently working on new features to address them.

In just two years time, Tokopedia has made some significant changes in Indonesia’s e-commerce scene. Its online marketplace concept was then followed by some similar companies like Plasa, Rakuten (the ecommerce service from Japan), and Blibli. But the company still has a long way to go to become a giant in the industry.

We’ll have to wait and see what kind of solutions William and his team have to solve the issues they have encountered. But for now, if you’d like to read more on William and Tokopedia, check out our previous interview with him earlier this year.

According to a report today on retail and auction sites from research firm comScore, Amazon is reaching over 20 percent of the internet’s entire population, with 282 million visits in June. That’s more than any other site, including second ranked eBay which reaches 16 percent. How do Asian companies fare in the rankings? I’m glad you asked.

Chinese e-commerce giant Alibaba comes in at number three reaching 11.3 percent, although as you can see in the chart below, a whopping 86 percent of that comes from the Asia Pacific region.

Similarly Japan’s online retail service Rakuten ranks fifth just behind Apple, reaching about four percent, although 73 percent of that is from the Asia Pacific region.

How do other major retail sites breakdown by region? Here are a few selected examples. As you can see, Amazon and Apple are managing to bring in a more ‘globally distributed’ audience from across all regions.

These numbers illustrate a couple of things. Alibaba and Rakuten still have much room to grow in overseas markets. This is particularly true for Alibaba, which could have much better reach in North America and Europe.

As for Rakuten, while it has made moves to improve reach in Europe with the acquisitions of PriceMinister and Tradoria, it still has room to expand in North America.

As online retailing continues its globalization trend, the biggest Western companies will continue to look for more Asia-based audiences too, just as Asian companies will want to look West for buyers they have yet to reach.

[Source: comScore]

Sad box robot: "Downloads? But then you won't need me anymore!"

Thanks to the always informative Serkan Toto for the tip earlier today that Amazon Japan has expanded its offerings to include software downloads among its online retail offerings.

Most of the software categories are more or less in line with what you see on other Amazon regional sites, with PC games, security software, or applications for office or design use. Although I admit that the Adult PC Game category is a little ‘different,’ the section does ask if you’re over 18 before proceeding.

Serkan noted that limited offerings on the site (about 1300 titles presently) will likely expand over time, saying that “[t]he selection (or prices) aren’t terribly exciting, but this is actually a quite big move for the site.”

As a consumer, I tend to use Amazon quite a bit here in Japan, as its prices tend to be as low as any other online retailers here. Incidentally, we’re beginning to see some Amazon-ish moves from homegrown retailer Rakuten, whose Raboo service (Rakuten Books) and Android e-book reader have been announced this summer.

[Nikkei via Serkan Toto, Image Nikkei Trendy]

Rakuten China, a joint venture between Baidu and the Japanese e-commerce giant, has today rolled out a brand-oriented group shopping portal.

The new group buy mall – take a look here – features deals on popular brands such as Adidas, Nike, Dior, Nokia, and Apple. In total, 50 brands are on-board with Rakuten’s group shopping site. Some brands even get their own mini-site boutique, such as Pepsi’s.

China’s newest Groupon clone has some heavy-hitting potential in this sector – it’s a formal joint-venture between Japan’s number one e-commerce site and China’s largest search engine. Back in January of last year, TechCrunch reported that the duo had invested US$50 million into the Chinese B2C site, with ownership split 51/49 between Rakuten (JASDAQ: 4755) and Baidu (NASDAQ: BIDU).

This new move certainly represents some threat to Taobao’s deals site, Tencent’s QQTuan, Lashou, and Meituan, which have slowly emerged as marginal market leaders in this very fragmented market in China (see the graph on the left).

That’s despite Rakuten’s new portal not covering leisure deals, such as restaurants.

It very much looks like Rakuten has gone for a certain segment of the group buy market, and is aiming to grab market share by allaying the concerns of consumers about potential fake goods – especially for products such as shoes, make-up, and gadgets – on its numerous smaller rivals.

You might like to check out this infographic showing the history of Rakuten from its origins in Japan to its spread across the e-commerce scene in Asia. Also, the Rakuten mothership the other day released its Q2 2011 earnings results.

[Source: Techweb - article in Chinese]

In addition to offering the panels, Rakuten will provide customers with financing options to make the panels more affordable. These will include installment plans and low interest loans. At around 3 million yen (or ~$38,000 USD), the panels may be a tough sell, especially as Rakuten users aren’t used to the company being a provider of alternative energy solutions; this is Rakuten’s first foray into that field.

Rakuten has over 70 million members and a history of expanding into new markets. In June of this year, the company launched a joint venture to expand their platform into Indonesia, and just a week ago it bought an 80 percent stake in German e-commerce company Tradoria.

For more information on Rakuten and its expansions, check out this infographic we made detailing the company’s history.

Embed Code:

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[via The Nikkei]

Continuing the recent trend of Japanese internet companies expanding their businesses across the globe, leading e-commerce company Rakuten, who we recently profiled in our infographic series, has bought up an 80 percent stake in German online shopping site Tradoria.de.

This follows the company’s expansion into Indonesia which we covered just last month. You may recall we spoke to its local head of marketing about the company’s strategy there. Last month also saw Rakuten move into South American territory by picking up a 75 percent stake in Brazilian online retailer Ikeda (PDF). It has been a very productive summer for the company so far!

The acquisition of Tradoria marks its second European pick-up after it acquired France’s PriceMinister last year. The company also has joint ventures in China and Thailand.

Our regular readers are most likely aware of the many Japanese tech companies who are looking to overseas markets. Is the Japanese market not enough to sustain their businesses? We got in touch with Olivier Mathiot, who was the cofounder of PriceMinister’s and is in charge of the marketing development for Rakuten. He noted that “Rakuten’s growth rate in the Japanese domestic market is very good, even if the Japanese economy as a whole is slowing down.”

Nevertheless, the company does have strong global ambitions as Olivier added “We intend to become one of the major Global e-commerce companies in Europe and [beyond].”

Rakuten’s full press release can be found below, and you can read the German announcement over on Tradoria’s website (PDF).

Rakuten Acquires Tradoria in Germany

The growth of e-commerce and social commerce in Indonesia is now enlivened by the presence of both local and foreign sites.

We thought it would be great to list out some of the more popular online shopping platforms in the country for your reading pleasure.

The list is not exhaustive but it does provide you with a good overview of Indonesia’s online shopping platforms.

1. Rakuten Belanja Online

Alexa Stats:

As a new player in the country, Rakuten Indonesia is currently ranked at the 503 postion on Alexa.

2. Multiply

Alexa Stats:

Multiply has a global rank at 380 on Alexa and 25 in Indonesia.

3. Kaskus

Kaskus’ trading forum (FJB) has been around for five years. Member can sell goods ranging from used mobile phones to the latest BMW car. Everyone can search for almost anything in this forum with any price range, making this forum an excellent source of shopping information.

Alexa Stats:

Kaskus is ranked number 328 in the world, and the number 7 most popular site in Indonesia. Most Kaskus members are based in big cities like Jakarta and Surabaya, considering the levels of the economy that allows them to spend more money on trading/e-commerce forum.

4. Tokobagus

To allow customers to shop while on the go, Tokobagus recently launched a BlackBerry app. Now customers can easily register, advertise, and manage their online shopping activity via their BlackBerry.

Alexa Stats:

In Indonesia, Tokobagus is ranked number 20 in Indonesia, and 1662 in worldwide rankings. Since its launch in 2003, Tokobagus has been popular among Indonesian Internet users, especially those in Malang and Semarang.

5. Kutukutubuku

Alexa Stats:

Ranking number 50,671 in the world, 28,000 in Indonesia, and 7,200 in China. Kutukutubuku attracts visitors from all over the world with traffic continue to rise.

6. Disdus

Disdus offers daily deals in many cities including Bandung, Bali, Makasar, and others. It also provides big discounts in every two days, notifying users by email or BlackBerry Messenger.

Alexa Stats:

Currently Disdus is ranked number 22,859 globally and holds the number 211 spot in the country.

7. DealKeren

DealKeren is owned by Ensogo, a giant group-buying company based in Thailand. The company, including DealKeren, was recently acquired by LivingSocial. This acquisition will help DealKeren battle it out with Disdus for an epic group-buying war in the country.

Alexa Stats:

Currently at number 18,198 worldwide, and rank 219 in Indonesia. Slowly but surely, the graph continues to climb as more customers register on the site.

8. Tokopedia

Alexa stats:

Tokopedia occupies the 17,420 spot in global rankings, and is number 244 in Indonesia.

Are there any sites that we missed? Feel free to add them as comments.

1. Rakuten is now officially launched in Indonesia. What’s next?

We aim very high in this market. And we are striving to be number one in Indonesia. A mall is never a mall without items, merchants, and customer, so what is next? We are populating our mall with items and merchants, as well as providing customer a new experience of shopping.

2. Compared to other E-Commerce sites, Rakuten is pretty unique and has a strong brand name back in Japan. How can you repeat this success?

[It's all about the merchants and quality of goods on Rakuten] We have this one function called E-Commerce Consultant (ECC), which provides consultation for merchants to perform their e-commerce business, so even if a merchant has a limited experience in doing e-commerce, our ECC will help in such way that they can increase their sales. And from the customer point of view, Rakuten will make sure they are getting the best deal.

3. Rakuten launched with MNC Group as a partner. Why them? And since they are a media company, will Rakuten go all-out in media advertising?

Being part of media, we are aware of how important advertising is, so yes we are going to go all out in advertising.

4. There are Tokopedia, Telkom’s Plasa.com , Multiply’s Social Commerce and BliBli.com – How do you see your competitors as you jump into this battle?

We have studied our battlefield before. Everyone has it’s own uniqueness and differentiations, as well as how we differentiate ourself to others. As Rakuten itself, we differentiate by having large numbers of merchants, selling many variety of items.

Our business models is when our merchants’ sales increase, our revenue also increases, many ecommerce players treat this as a vending machine, but we are not, we are doing our best to increase our merchant’s sales so we can also increase our sales.

5. What are your targets for this year and how do you plan to achieve them?

As our CEO has said previously, we are targeting more than 200 merchants by this end of the year, since we are aiming to be the number one online shopping mall. We are going to achieve that by having a series of seminars for the potential merchants, as well as educating the market.

And for the customers/users, we are having continuous promotion, offering the best deal for users, at the same time, ensuring the safety side of online shopping by having escrow service, that is the payment will be withhold until the goods is received by users, so users need not to worry if the goods are not being delivered. Soon, we will be adding more features such as installment and COD (Cash on Delivery).

6. How do you see tech start-ups in Indonesia?

I think this has been a very exciting year for internet industry. With double digit internet penetration, it is a very lucrative market. Especially in the e-commerce industry. Although I think the internet industry is still in the infant stage, but it is the best time to start.

Personal Note

Also catch: The History of Rakuten, Japan’s Largest E-Commerce Site [INFOGRAPHIC]

Now, we have a new player with Rakuten, a renown e-commerce platform in Japan, having formed a joint-venture with media giant MNC Group to launch an Internet shopping mall called “Rakuten Belanja Online” (RBO) in Indonesia.

Outline of the Joint Venture

• Name of the Service: Rakuten Belanja Online
• Description of Business: engaged in internet shopping mall in Indonesia
• Amount of Planned Investment: Rp60 billion (approximately $558 million; converted at 100 rupiahs=.93)
• Investment Ratio: Rakuten has 51% and MNC Group has 49%
• Representative: President Director & CEO Ryota Inaba

Since the signing of the joint venture agreement (PDF) in May 2010, Rakuten and MNC Group has been diligently preparing for today’s official launch of RBO. For a start, RBO will offer local products to Indonesian consumers as an effort to replicate Japan’s Rakuten Ichiba B2B2C Internet shopping mall model.

RBO offers a wide range of merchandise from Indonesia’s top retailers, including Electronic Solution, Kinokuniya, and Top Golf. RBO also house local brands like Mustika Ratu, Martha Tilaar, Alun-Alun, and Sarinah.

In a statement, it was revealed that the joint venture plans to link up with Rakuten Group’s e-commerce sites in other countries including Japan’s Rakuten Ichiba in the near future.

“Rakuten Belanja Online is the realization of a joint venture between Rakuten and MNC Group with the hope of enriching the lives of Indonesian people by providing a fun, safe and a convenient place to shop for goods and services. RBO will contribute to the growth of e-commerce in Indonesia by empowering merchants and consumers through the power of the internet,” said Rakuten Chairman and CEO, Hiroshi Mikitani.

MNC Group’s President Director and CEO, Hary Tanoesoedibjo added, “Rakuten and MNC Group aims to closely cooperate together to develop and expand RBO to be Indonesia’s number one Internet shopping mall by capitalizing on Rakuten’s e-commerce expertise as the largest online shopping mall in Japan with MNC Group’s significant presence in the media industry with its leading positions across many different media platforms for the effective and efficient placements of advertisements and promotions

Indonesia boasts the fourth largest population (240 million) in the world and the largest number of internet users as compared to other countries in Southeast Asia with tremendous growth potential in e-commerce and social commerce. RBO will employ an escrow service to ensure a safe and secure transaction between consumers and merchants, a common method of online transaction in Indonesia.

RBO has also partnered with well-known banks in Indonesia such as BCA and Bank Mandiri for direct payment through the Internet. Other banks will be joining the partnership as well.

Multiply, the social network turned social shopping platform site was reported back in February that it had set up an office and a team to bring a different e-commerce approach to Indonesia.

To understand how Multiply is approaching the e-commerce game in Indonesia, we took time to speak to Daniel Tumiwa, head of Multiply Indonesia who shared some thoughts with us in this interview.

1. Multiply has been around for quite a long time now, what made it changed its focus to e-commerce?

We are responding to the demands made by users. Although we have a strong base of users that continue to conventionally use the site to share thoughts and connect (and make friends) in Indonesia , more and more people are using the site to establish their business. Multiply Inc then decided to enhance and equip the site with better tools and features to support users’ endeavor to do so (business-wise). Plus, left to grow on its own, Indonesia now has 35,000 online sellers (which grows by 2,000 on a monthly basis) supported by 7 million unique users every month. We’re really looking forward to developing the social commerce aspect of Multiply, whilst also maintaining the support system that’s already there, which includes the bloggers.

2. There are a lot of e-commerce sites that were launched before Multiply in Indonesia. How is Multiply going to differentiate from the crowd? What is the advantage of using Multiply in Indonesia?

First and foremost, Multiply is a social network. Hence, Multiply is already equipped with the tools which enable interaction between users (they can share blogs , notes, photos, links, videos and even chat). People who do business in Multiply already have loyal followers, they have a strong network. With the new features that Multiply provides (the improved Marketplace, Stock Room, Payment Gateway and other programs including Multiply Promote and Multiply Trust), we aim to multiply the benefits of selling and buying. Although a few have surfaced, we enter the market with good payment options. Integration to KlikBCA, Mandiri, Virtual Accounts, ATM, PayPal , and soon mobile payments. Unlike others that have one or two.

3. Indonesian Internet users are still “immature,” as in they don’t really buy things online, instead they are more used to Cash on Delivery (COD) way of transaction. How do you see this?

It may be completely immature, but it’s heading there. People nowadays prefer convenience, but they’d also like to maintain the human touch. Multiply provides convenience (in setting up shop, managing shops for sellers, and in shopping for buyers), yet it also encourages interaction between sellers and buyers by utilizing the social network aspect of the site (buyers can befriend sellers, vice versa, from friendship, trust is born. Trust goes a long way for both sellers and buyers. Sellers benefit from having loyal buyers, buyers need not fret since they’re buying from friends). People do COD mostly because it’s deemed as perhaps a safer option. With Multiply’s payment gateway, buyers get more options, all safe plus convenient.

4. One of the unsolved problems in Indonesia is the payment system, what will Multiply do about it?

We’ll continue to socialize the payment system, what is labeled as problem is just a matter of unfamiliarity. When it comes to payment, we put forward the important characteristics: safe, convenient, user-friendliness. We will continue to offer the most payment solutions. The banks have a huge need to socialize their new solutions, and we fit in as perfect partners, so there will be many activities together.

5. What is your target for Multiply in Indonesia this year?

A fair target will be to be within top 3 unaided recollection for Online Shopping. The other one would be 100,000 merchants and for all our merchants to have tried to transact at least once through our payment solution.

With e-commerce sites/startups such as Rakuten, Telkom’s Plasa, BliBli, or even Tokopedia who received Series B funding back in April, it will be a hot and tough battle to earn the market share here in Indonesia, but we do have a huge pie to share! What do you think?