Rakuten’s Revenue Sources: How They Make Money

Ever wondered how one company can dominate e-commerce, fintech and mobile services? Rakuten, a Japanese tech giant, does just that. It has over 70 services, so customers keep coming back.

Rakuten’s business model is all about diversification. It has its hands in e-commerce and fintech among other areas. But how does it turn these different services into money?

The answer is Rakuten’s single ID system. It lets members access various services, earn and spend points while shopping. This benefits both customers and Rakuten, as it reduces costs and increases customer value.

Key Takeaways

• Rakuten has over 70 services across e-commerce, fintech and mobile
• Rakuten uses a single ID system to enhance customer experience and loyalty
• Rakuten’s e-commerce platform generates almost $100m in daily sales
• Revenue sources: commissions, fees and financial services
• Rakuten’s ecosystem approach reduces costs and increases customer lifetime value

What is Rakuten’s Business Model

Rakuten’s business model is based on its online marketplace. Here, over 55,000 merchants sell their products. Rakuten makes money through various fees, like commissions up to 4% per sale.

Rakuten’s e-commerce platform, Rakuten Ichiba, is a big deal. It generates almost $100m in daily sales. It’s Japan’s largest online retailer.

Rakuten does more than just e-commerce. It also offers financial services like Rakuten Bank and Rakuten Card. And mobile services. This variety helps Rakuten sell more services to customers.

For example, Rakuten Mobile users spend about $260 more on Rakuten Ichiba than others. This shows how well the different parts of Rakuten work together.

Rakuten’s affiliate marketing is key to its success. It gives commissions to shoppers through cashback programs. This encourages customers to shop more.

Thanks to this, over 70% of customers join the Rakuten Super Points loyalty program. This high engagement shows how well Rakuten’s strategy works.

The History of Rakuten: From Online Marketplace to Tech Giant

Rakuten started in 1997 with Hiroshi Mikitani’s MDM and Rakuten Ichiba. That was the beginning of its e-commerce journey. Going public in 2000 helped Rakuten grow fast.

Over time, Rakuten added more services. It launched Rakuten Books and Rakuten Travel. The Super Points loyalty program also helped keep customers coming back.

Hiroshi Mikitani’s vision turned Rakuten into a tech leader. Rakuten grew by making smart buys and partnerships. It entered fintech, mobile and data markets.

In 2022, Rakuten’s revenue was ¥1.93 trillion, up 14.6% from the previous year. This shows Rakuten’s success in building a strong ecosystem. Rakuten Card and Rakuten Bank also saw their user base grow.

Even with a ¥372.9 billion net loss in 2022, Rakuten is moving forward. Its focus on innovation and customers keeps it ahead in e-commerce.

Rakuten’s Ecosystem

Rakuten’s ecosystem is a key to its success. The company has over 70 services across different sectors. Members can use one ID for many Rakuten services.

This connected system reduces costs and increases customer value. Rakuten promotes new services through its existing businesses. This way it avoids expensive ads.

This smart move has paid off. For example, 35% of Rakuten Mobile users started shopping on Ichiba, Rakuten’s e-commerce site, within a year. This shows how the ecosystem encourages users to try out different Rakuten services.

The results are clear. Users who signed up for Rakuten Mobile saw a 67% increase in yearly sales on Rakuten Ichiba. Those who didn’t only saw a 20% increase. This shows Rakuten’s ecosystem keeps users engaged and increases their lifetime value.

Rakuten has grown from a small online marketplace to Japan’s largest online retailer. It now has over 44,000 merchants and many revenue streams. Rakuten aims to increase customer loyalty and drive long-term profits through its growing ecosystem.

How does Rakuten make money?Rakuten makes money in many ways. Its e-commerce site, Rakuten Ichiba, is a big earner. Every day it sells $100m worth of products. Sellers pay up to 4% in commissions for each sale.

Rakuten also charges different fees. These include listing, registration and monthly consultation fees.

Financial services are another big income generator. Rakuten offers banking, credit cards, insurance and digital payments. Rakuten Wallet, its fintech division, makes most of its money from trading fees.

The Rakuten Cash Back Visa Credit Card adds to its income. It gives cashback rewards on purchases.

Rakuten’s affiliate marketing program is also a big earner. It has over 3,500 partner stores. Rakuten earns commissions when it directs customers to these stores.

It shares some of these earnings with users as cashback rewards. Rewards range from 1% to 40% on purchases. This has led to over $1bn in cashback payments to members.

Other sources of income include mobile services, travel platform commissions and data monetization. Rakuten’s diverse ecosystem of over 70 services supports its growth in the global market.

Internet Services: The backbone of Rakuten’s Revenue

Rakuten’s Internet Services is the core of its income. At the center is Rakuten Ichiba, Japan’s top e-commerce site. It has over 56,000 merchants and makes nearly $100m in sales daily.

Rakuten makes money in many ways. Sellers pay 2% to 4% commission on each sale. These fees are a big part of Rakuten’s earnings. The company also charges extra for listing products, handling transactions and affiliate marketing.

Advertising is another big money-maker for Rakuten. It uses user data for targeted ads. This helps sellers sell more and makes Rakuten more money too.

Rakuten’s Internet Services also includes Rakuten Travel and Rakuten Ticket. These services help with travel bookings and event tickets. Rakuten NFT is also part of this division, focused on digital collectibles. All these services add to Rakuten’s income, making it a leader in e-commerce.

FinTech: Rakuten’s growing Financial Arm

Rakuten’s financial services division is a key part of the company. It includes Rakuten Bank and Rakuten Card. These services support users across Rakuten’s internet services and boost the company’s revenue.Rakuten Bank has grown rapidly with ¥8.6 trillion in deposits from over 13 million customers. This has made Rakuten Bank over ¥500 billion in value. Selling financial products to its 36 million active users has contributed to strong revenue growth.

Rakuten Card is another key part of the FinTech division. It earns interchange fees and merchant fees. Rakuten’s services also include insurance, digital payments and cryptocurrency trading. These services form a complete financial ecosystem for users.

Rakuten’s financial services show the company’s ability to adapt and innovate. By adding these services to its ecosystem, Rakuten provides a seamless experience for users. It also creates new ways to make money for the company.

Mobile Services: Rakuten’s New Venture

Rakuten Mobile launched in 2020 with a bang. It introduced a low-cost data plan for just $27 a month. This plan offers unlimited calls and data to attract budget-conscious users.

Although Rakuten Mobile started with losses, it believes in its future. It uses its tech expertise and existing network to offer a smooth mobile experience. The goal is to provide value to customers across different services.

In 2021, Rakuten launched Rakuten Symphony. This new company provides virtual network solutions to telecoms. It includes tools for customer relationship management and cloud storage. Rakuten Symphony is now a major player in the changing telecom landscape.

Rakuten’s foray into mobile shows its commitment to innovation and growth. Its mobile services and network solutions will have a big impact. For those looking into digital ventures, blogging platforms have many opportunities for online presence.

Rakuten’s Affiliate Marketing Strategy

Rakuten’s affiliate marketing strategy is a big player. It has over 150,000 publishers and brands in its network. This makes it a great place for advertisers and publishers to meet. Its cashback program attracts millions of shoppers, boosting sales for merchants.

Rakuten uses smart commissioning to reward publishers well. Its multi-touch commissioning model values each step in the customer’s journey. This way, publishers get fair pay for brand awareness and new customer acquisition. Dynamic commissioning enables advertisers to focus on their goals, making their marketing more effective.The platform has many tools for affiliate marketers. It uses AI for forecasting and benchmarking, helping publishers make informed decisions. Rakuten’s analytics tools allow users to track their campaigns in real-time. With commission rates from 4% to 15% and a low payout of $5, it attracts a wide range of affiliates.

Rakuten has over 2,500 merchants, including big names like Nike, Sephora and Walmart. This gives publishers plenty of opportunities to find products for their audience. The program has been around for a long time, with almost 1.4 billion members.

Data Monetization: Another Revenue Stream

Rakuten makes money with data. It has over 70 services, so it has a lot of user data. This data is valuable for businesses to know what people like and do.

Rakuten keeps the data safe by keeping it anonymous. This way, it can help businesses without hurting anyone’s privacy. The data helps businesses make better ads and marketing plans.

More than 110 brands use Rakuten’s data service. They get daily insights to help them sell more. This includes data from both online and offline sales.

Big names like Unilever and Sephora say Rakuten’s service is great. They say it helps them grow and sell more online. This shows how well Rakuten’s data service works.

Conclusion

Rakuten has grown from an online marketplace to a tech giant. It now has over 70 services in its ecosystem. This makes it a leader in e-commerce, fintech and mobile services.

With over 44,000 merchants, Rakuten is Japan’s biggest online retailer. It makes nearly $100m in sales daily.

The company has many ways to make money. Internet services like Rakuten Ichiba are a big part of its income. Sellers pay up to 4% in commissions and other fees.

FinTech services like Rakuten Bank and Rakuten Card also contribute to its growth. Rakuten Mobile’s low-cost data plan and Rakuten Symphony’s launch in 2021 show its focus on telecom growth.

Rakuten puts its customers first. It has paid over $1bn in cash back, up to 40% back on purchases. This, along with partners with over 2,500 stores, builds strong customer loyalty.More to come.