Tamebay Comment: The fall of Rakuten and why we need a third big player
The announcement that Rakuten UK will be closing wasn’t a surprise but it did come out of the blue last week. Their new proposition never resonated with sellers and the new branding was bewildering to buyers. What was Rakuten? They didn’t answer that question.
They also managed successfully to alienate those play.com merchants who were doing well. Many were not invited on to the new Rakuten platform at launch and plenty justifiably felt they were treated with contempt, let alone loyalty.
They’ve pulled out of the UK (Europe’s biggest ecommerce market) with the aim of focussing efforts in France and Germany. They can never come back: all the goodwill is squandered. One seller we spoke to last week has spent several months building out his Rakuten operations only to learn (from Tamebay) that they are shutting down Rakuten.co.uk. That’s a shocking waste of time and money for him.
Rakuten was, after all, still touting for business in the past few weeks at events. It’s difficult to know when the decision was made but certainly some sellers would have appreciated news sooner of the shut-down.
Rakuten’s demise is a useful reminder of the truly epic power that any marketplace has over a retailer who relies on them for sales. Not that Rakuten was a game changer for anyone. But their withdrawal serves as a reminder that marketplaces are not accountable to their sellers in any real sense and make their decisions based on shareholder interest.
In a sense though, it’s sad to see them go. The UK desperately needs solid competition on the marketplaces front especially because eBay hasn’t flexed its muscles much recently and is mired in technical glitches. Amazon is going great guns and increasingly dominating the scene with verve, innovation and bold expansion. And yet a single dominating marketplace isn’t to be wished for either. We need more players.
Where will future marketplaces come from? Obviously there are numerous attractive little, niche and specialist marketplaces out there and we welcome that. Etsy, Notonthehighstreet, yumbles … to name but a few… are vital. But surely a big new generic marketplace is required?
Google would be an obvious contender. Microsoft and indeed Apple. What do you reckon?