Rakuten throws down the gauntlet, to challenge Mercari and others with flea market app

Japanese ecommerce giant Rakuten is set to challenge the country’s popular used goods resale apps with the upcoming launch of Rakuma. The Android version will launch on November 25, with an iOS version to follow shortly thereafter. Starting today, sellers can begin preemptively listing items via the Rakuma website.

The so-called online flea market space is a lucrative one in Japan – just last month, rival service Mercari closed a US$21 million series C round. In September, Mercari even launched an English version in an attempt to replicate their success in the US.

Fril, an online marketplace for young women to sell their second-hand clothing, recently landed US$9 million. Japan’s blockbuster messaging app Line also offers a flea market-like C2C service called Line Mall.

Mercari, with over 6 million downloads since launching in 2013, doesn’t charge sellers to list their items – but the service does take a ten percent cut of each sale. Rakuma, on the other hand, charges a flat JPY 216 (US$1.86) commission on transactions under JPY 10,000 (US$86). Items that sell for more than that are commission free. Sellers with Rakuten Bank accounts can also receive payments as early as the same day a buyer confirms receipt of their item.

Motoki Nagasato, head of PR at Fril parent company Fablic, tells Tech in Asia that “the online flea market concept is still relatively new in Japan, so having another company in this space can be thought of as a good thing.”

Update (Nov. 18): Ryo Ishizuka, a Mercari co-founder, also welcomes Rakuten’s entry into the digital C2C market space:

A big company like Rakuten launching a C2C app will generate more public interest for other C2C marketplace apps, which is good for both Mercari and for the industry as a whole.

Update 2 (Nov. 19): Rakuten spokesperson, James Bell, has replied to Tech in Asia regarding the announcement of Rakuma. He explained that the service’s JPY 216 (US$1.86) commission can be easily avoided, making the service essentially commission-free:

When Rakuten transfers proceeds of the sales which are less than 10,000 yen to the user’s designated bank account, a commission of 216 yen – tax included – will apply. But it is possible to store the proceeds of the sales in Rakuma and then transfer the proceeds to your bank account once they exceed 10,000 yen, and in this case, you won’t have to pay the 216 yen commission. It is also possible for proceeds from sales to not be transferred, but to be held over for future product purchases in Rakuma. In that case, you don’t have to pay a commission.

Asked why the acquisition-friendly company didn’t just buy Mercari or another rival, Bell said the following: