Welcome to the first in our series of marketplace interviews, where we will discover key insights and tips from online marketplaces across the world.
Today we are talking to Cross-Border Sales Strategist at Rakuten, Reid Wegner.
As part of my role, I manage business development for the US and Western hemisphere regions of Rakuten’s Overseas Sales programme. Basically, I’m responsible for new merchant acquisition and strategic partnerships. So, I help merchants navigate the Japanese market through cross-border ecommerce, and work with Rakuten’s strategic partners to develop ecommerce support services for retailers looking to enter Japan.
Rakuten is a merchant-centric marketplace, which means that we supply the platform and customer traffic, but the brands and retailers are able to control their own storefront, product pages, and customer experiences within the marketplace.
Other marketplaces are more product-oriented, which means they don’t give brands and retailers much opportunity to differentiate themselves as merchants within the marketplace. We call that the “vending machine” model. In contrast, Rakuten is the ‘shopping mall’ model, where each merchant gets to operate a unique store, or microsite, within the marketplace environment. This gives merchants a lot more control over their own brand and reputation as a seller.
In Japan, Rakuten is the largest ecommerce channel, with over 30% market share in some categories, and we have over 105 million registered shoppers on the platform. As a merchant, you want to be where the shoppers are, and in Japan, all of them are on Rakuten. The ecosystem Rakuten has created in Japan is really amazing. Our Super Points loyalty program extends beyond ecommerce and into offline channels like coffee shops, banking, sports and entertainment, and even McDonald’s purchases. It keeps shoppers in the Rakuten family and encourages repeat purchases on the marketplace.
Fashion is our biggest category and is especially good for overseas merchants since some overseas styles might be hard to find in Japan. Beauty and cosmetics products are also in high-demand from overseas merchants. We have a really strong gourmet and speciality foods category as well, although this category can be harder for overseas merchants due to logistics challenges.
Japanese customers expect very high levels of service, and it’s really important to Rakuten that our merchants provide high-quality service to our customers.
Specifically, for overseas merchants, we have trusted partnerships with outsourcing companies in Japan who can provide Japanese-language phone and email support on behalf of overseas merchants. We know servicing Japanese customers can be a challenge for overseas retailers, so we work closely with our overseas merchants to make sure they understand Japanese customers’ expectations and are prepared to offer great shopping experiences to their customers in Japan.
Cross-border just keeps growing and growing, and more retailers in Western countries are recognising that marketplaces are where a lot of the action is in Asia and other markets. In the western markets like the US and UK, we’re so used shopping on individual .com sites, and marketplaces are sometimes viewed as off-brand. But Pitney Bowes did a study earlier this year that found 70% of Japanese shoppers prefer to shop on marketplaces, which is eye-opening for a lot of western retailers trying to figure out the best channel into Japan.
Earlier waves of cross-border ecommerce innovation have focused on the logistics side, simply getting the products from country A to country B. That was an important step, and I think now there are a lot of operational solutions out there.
The second step is to solve for the customer acquisition side of the equation. Technology providers can do a lot to make it easier for retailers to push content globally, to get their products in front of customers around the world, rather than expecting customers to come to retailers’ sites. And of course, marketplaces are a key component of that customer acquisition stage.
Japanese ecommerce is still, more or less, dominated by Japanese merchants. At Rakuten, we want to lead the way by making it easier for non-Japanese merchants to enter the Japanese ecommerce market.
We’re creating a truly global marketplace where merchants around the world can sell directly to Japanese customers, and Japanese shoppers can access merchandise from around the world.
[Shunsuke Fujiya from Rakuten at Retail Without Borders 2017 in London]
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