I declare this article nominikeshon. It’s a sacred communication ritual in Japan that mixes confessions, truths, and alcohol. Whatever comes out is never to be spoken of again.
You probably think of Rakuten as an online store. Let me explain why I think it’s a bank – and I’m going to use lemons to do so.
Rakuten lemonade
Summer is coming. I can feel the humidity and see an ocean of armpit stains on the train. A glass of juice would brighten my day and I am sure it would give others some relief from the heat as well.
Photo credit: Pixabay.
I start a lemonade stand. It’s easy to get going. I have big aspirations and name it Rakuten, which means optimism in Japanese. I gather some lemons, sugar, water, and find a place to sell. I also get a friend to help me buy new ingredients when needed. I didn’t really check the costs but I am excited to sell my first glass for US$1. After paying my friend and reimbursing myself for sugar, spice, and everything nice that went into the drink, I walk away with US$0.12.
On the other side of the park across the pond, I see Alibaba singing, whipping out drinks, and pocketing US$0.29 for every glass sold. Yahoo Japan next to me is using robots to make drinks faster and brings in US$0.34. That’s impressive. These guys are way more efficient than me. I don’t even know where my friend went. I sell ten drinks on my first day and 11 on my next. Unfortunately I broke some glasses and needed to buy more so I walked away with less money on the second day.
A man approaches me on the third day interested in buying the stand. I figured I would do this gig for pocket change about ten days over vacation, selling about ten glasses a day. I ask for US$100 for the business but the man refuses. “I have seen you put salt in your lemonade when you run out of sugar. I don’t think you can keep selling that amount.”
Crap, he caught me. I only started doing that because my friend asked for more money, so I fired him and haven’t had time to get more sugar. The man said he would give me US$50 for the whole business since he thinks sales will decrease. I scoffed at his offer.
Meanwhile, across the pond Alibaba sold ten drinks the first day and 13 the next. The singing is attracting more and more customers and it seems like things will just keep getting bigger. Before leaving, the man says he would pay US$1,000 to buy that business but admits he couldn’t afford it. I mumble something about asking Yahoo Japan for help.
Based on enterprise value to revenue, investors expect Rakuten to contract.
Like the store name, I was feeling optimistic. I even bought the oldest lemonade stand in Thailand. I tried to set up stores in Singapore, Malaysia, and Indonesia, but things didn’t go well and I had to shut them down.
Lending lemons
Follow the money
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