Rakuten is the place to be for online sellers who are looking to expand from their beginnings on the usual Amazon and eBay channels. Most of the successful sellers out there have been able to reach the 1 million dollar mark because they have transitioned to multi-channel sales after setting up and making a few bucks. Many other online sellers remain limited to doing business on local websites. But the word local has no meaning in the online world or in a global marketplace. As marketplaces open up across borders, the barriers come down and opportunity knocks. Sellers stand to gain much more from their eCommerce ventures by branching out into additional areas.
What is Rakuten?
Rakuten is the country’s retail giant, and after they bought Buy.com, the Japanese Amazon. The online marketplace, called Rakuten Ichiba, started in 1997 as an open third party marketplace. Rakuten.com Shopping has a single product catalog that all the sellers on the platform add their SKUs to. Rakuten has 44,000 sellers and an average of 40.45 million shoppers per month from a base of 105 million members. This online marketplace does about 17 billion dollars in eCommerce sales per year, placing it third in the world behind Amazon and eBay. Rakuten holds a market share of 27% compared to Amazon Japan’s 12%.
For the past decade, Rakuten has been spreading across the globe with additional acquisitions and partnerships like Priceminister and Ikeda. Rakuten has even branched out, investing in Pinterest and purchasing Viber.
Why Sell on Rakuten?
To begin with, Japan has a very large and healthy eCommerce market that generates over 90 billion dollars in sales. This is about a quarter of the US annual eCommerce revenue and a seventh of China’s. Japanese shoppers are also more active than their neighbors and have the means to sustain an online lifestyle.
Here are a few other reasons to consider opening up a store on Rakuten Ichiba:
- Exclusively Third Party – Sellers on Rakuten compete with each other to sell, and not against Rakuten itself.
- A New Audience – 37.65 million of Rakuten’s 40+ million shoppers are from Japan, providing sellers with a whole new market to sell to. Sellers can build customer loyalty and not have to deal with overlap.
- Low Product Competition – Sellers can introduce products that are not yet available in Japan, and use this as an opportunity to sell off overstock and slow-moving inventory, such as smaller sizes and unpopular styles.
- Merchandising Freedom – Rakuten allows sellers to brand their stores and sell products the way they want to.
- Rakuten Super Points – A generous rewards program, attracting and retaining lots of customers. The rewards system is a channel where Rakuten reinvests commissions to offer customers point that they can use for future purchases. Sales events that offer 5% to 20% in rewards points funded by Rakuten is a great opportunity for sellers to build their brand and make a killing.
- eCommerce Consultants – Personal account management and sales strategists offered to sellers along with help you grow your business on the channel.
Rakuten also adds a personal touch to the shopping experience and boasts very low return rates, which is a bonus for any seller. If a seller can take the time and make the effort to build strong customer relationships on Rakuten, the rewards are great. Shipping will be a challenge, but the advantages far outweigh these two hurdles.
Setting up on Rakuten Japan
The first thing that you need to prepare before getting on Rakuten Ichiba is a local Japanese business entity and bank account. Sellers can take advantage of Rakuten’s partner network to help set up a store for their brand. These partners act as intermediaries, contracted by both parties to set up and even operate the store.
Requirements to Join
Rakuten thoroughly screens new merchants to comply with Japan’s strict policies on fake items. Rakuten sellers are allowed a lot of freedom to design their own stores, but the design must also pass certain quality standards.
The Selling Process
After consulting with a Rakuten sales advisor, the seller must undergo business verification and brand screening. This process takes about four weeks, but brand screening does not apply to resellers, who must only prove the authenticity of their products. Once the screening is complete and no issues are identified, the seller can begin listing products assisted by the launch team. As products sell, the dedicated account managers work alongside sellers to increase sales.
Store Operations and Customer Service
Because the marketplace is predominantly Japanese with a Japanese web interface, sellers will need daily assistance from someone proficient in the Japanese language. The product page content must be very high quality to pass customer standards and build trust, and communications even more so. Customer support on Rakuten must be excellent for both telephone and email service, in Japanese.
Sellers will have to build strong relationships with Rakuten shoppers to be able to succeed on the marketplace. A good way to do this is to openly offer a lot of information about the brand and the people behind it. The first foreign brands to open up shop on Rakuten had a rough time of it, but new sellers can learn from their experiences, such as providing a lot of content for not only all of the products, but also the company behind them.
Rakuten has a feedback system where customers can rate sellers for each product purchased. The criteria include accuracy of item description, item condition, shipping speed, and customer service. Feedback scores influence search rankings, but sellers are not often suspended for having low scores.
A Good Deal
Rakuten Ichiba is the biggest online marketplace in Japan, which is perhaps the most highly developed eCommerce market in Asia and one of the most successful in the world. Japanese consumers are highly educated and have high expectations. The demand for high-quality products is great, especially those that are not readily available in Japan for reasonable prices. For the careful seller, Rakuten can be a very profitable marketplace.