“Why Rakuten Should Stop Selling Things and be a Bank”


Rakuten, at home in Japan synonymous with online retail, has had a hard time with going international. Recently, Rakuten announced to withdraw from the UK, Spain and Austria (press release). France and Germany, the markets Rakuten wants to focus investment on in Europe, aren’t that strong either for Rakuten.

In Asia, business looks better for Rakuten, but in a different manner than one may think. Tech In Asia is, interestingly and quite sensationalistic, arguing that Rakuten should stop selling things and be a bank:

Rakuten, the Japan-born ecommerce giant, is now basically a bank. And that shift is accelerating.

Credit cards are now a huge priority for Rakuten. In 2014, 8.1 percent of card purchases in Japan by transaction amount were with its credit cards. The firm is currently number four in the credit card market and hopes to be number one by 2020.

It may have failed with ecommerce in Malaysia and other parts of Southeast Asia, but it could do well with banking. Nearly a quarter of the people in the region don’t have a bank account (PDF) and it’s not like they don’t want one. Having an account and the resulting financial inclusion can help people pay for education, start a business, or create an emergency fund. There are huge business opportunities for growth here. (…)

Rakuten may have given up on its online shopping efforts in Southeast Asia but its financial services are in good health. The firm might try to pull an ecommerce renaissance, converting its credit customers into online shoppers later down the line.

Rakuten could then increase its foothold into other big purchases made online like travel and insurance.

Rakuten’s online stores are not going away, but I don’t think they’re going to get any bigger.

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One comment

  1. […] the banking side of Rakuten’s platform growing, it makes sense for Rakuten Ventures to invest in financial technology (fintech) startups. For […]


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