Japan’s Online Mall Rakuten Makes Global Bid

Can any one provider ever really claim title as The World’s Online Mall? If anyone can, Japan can.

Japan’s largest online shopping mall is making a bid to become the leading global online shopping mall. With 7 million+ registered members in Japan, Rakuten already has a beach head in the US (they own buy.com with its 12 million members) and the EU (just bought France’s Price Minister with 12 million members) On the way to their planned 27-country expansion through end of 2012, they’ll bump up against eBay and amazon and myriad regional power e-tailers.

The world of online retail is fragmented and de-centralized, with neighborhood boutiques jostling alongside Rakuten and those other behemoths. I foresee success for Rakuten in enabling a highly personalized “shopping bubble” experience, wherein each of us are in constant contact with our own personal shopping mall; but in the form of an anonymous back-end engine. That will mean a complete absence of a Rakuten brand, in favor of a “[Your name here]’s Store” approach… even bypassing the home page banner that we now see on eBay, Buynow, or other sites.

Remember the “We’re Beatrice” campaigns of the 1980s? Sometimes, when a conglomerate tries to step out front and win brand loyalty, it comes back and bites them. Annual sales of Beatrice, mega-holding company, were roughly $12 billion by 1984. It was during this year that the corporation ended advertisements for its products with the catchphrase “We’re Beatrice”; the red and white “Beatrice” logo would simultaneously appear in the bottom right hand corner. It was determined that the campaign alienated consumers, calling attention to the fact that it was a far-reaching multinational corporation, and the campaign was pulled off the air. (read more here).

Channel leaders and brand marketers can succeed in the online shopping mall by maintaining focus on brand personalization. That means direct-to-consumer promotions that goose shoppers toward Rakuten-driven, personalized shopping malls. If you’re a brand manager for a consumer manufacturer, you don’t worry so much about who owns and runs the shopping mall, as who its tenants are. By the same token, you’ll continue to focus on reaching consumers through personalized online shopping portals with little regard to the Rakuten engines running in the background.

I feel Japan’s expertise in in-home shopping will push them to the front of the pack — already, Japan Travel Bureau offers vacation souvenirs for sale and delivery to its travel customers BEFORE they leave on their trip.

Of note, Rakuten has become the first significant Japanese company to nominate English as the official in-house language, including among staff in Japan. CEO Hiroshi Mikitani states that this will be practice by the end of 2012… which coincides with the company’s ambitious expansion plans. Read more at a blog post on this topic.