Linn Academy 2015 – Update on Rakuten

David-BrackinDavid Brackin is a regular contributor to Tamebay and is the co-founder of Stuff U Sell. He has sold over 250,000 different items on eBay. He was at the Linnworks Academy event in Reading today and reports live on Rakuten’s presentation.

Rakuten – the Japanese e-commerce company is gradually emerging from the ashes of and is celebrating its first birthday post relaunch this week. And it has considerable backing to do so – Rakuten is a giant company, worth nearly $25bn, and is both dominant in its native Japanese market and has global reach through its many subsidiaries that it has acquired worldwide. Max Wright and Mike Nelson from Rakuten were at the Linnworks Academy and were keen to explain more about their plans.

Rakuten PresentationThe first thing that comes across in their explanation is how merchant-focussed they are. Everything about Rakuten is about their flexibility – “Your Shop, Your Way” is their motto and it is a refreshing contrast to some of the more rigid approaches of the larger marketplaces. Shops are highly customisable so that you can present your brand in exactly the way that you like – and this will be of particular appeal to larger merchants who are looking to extend their presence online. Furthermore, the listings themselves aren’t rigid but allow a lot of customisation to allow merchants to present their sales in the way they know will appeal best to their category and their buyers.

Moreover the marketplace is – of course given the event – tightly integrated into the Linnworks platform. Pricing varies by category – from 5% to 15%+VAT – with options for larger sellers to pay a monthly too for a lower percentage (moving from £30 per month to £400 gets about 1/3 off fees). It is comparable to other marketplaces although it doesn’t stand out as a cheap offering.

However, the challenge is clear: in a space dominated by two huge marketplace players, how does Rakuten aim to stand out, and are they big enough to matter? The flexibility is welcome, but Rakuten really need to be positioning themselves as a piggy-back marketplace, using the work already done to list on the larger marketplaces. Are they big enough to bother with?

While they are keen to talk about the efforts they are making with social, with email marketing, with sales promotion and with their global loyalty programme, Rakuten are shy about stating how many users they actually have and that is the biggest issue when considering whether to use them as an incremental channel. It seems like it may well be their 2nd birthday before they have sufficient scale to attract merchants to make the effort to build them into their multi-channel strategy. Furthermore, questions from the audience suggest that they might have some issues around prompt payment to merchants to address before they can be considered a suitable add-on.