Business Breakdowns
Episode 182 Rakuten: Rewiring Japan’s Digital Economy
Business Breakdowns

Episode 182: Rakuten: Rewiring Japan’s Digital Economy

Business Breakdowns

Episode 182

Rakuten: Rewiring Japan’s Digital Economy

Matthew Brett is an investment manager in the Japanese Equities team at Baillie Gifford. We cover the unique way Rakuten has built a conglomerate over its short history, how its points system ties its services together and keeps users engaged, and the opportunities and challenges posed by its ambitious mobile network rollout.

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Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:04:52) Overview of Rakuten

(00:06:15) Rakuten's Business Model and History

(00:13:32) Expansion and Challenges

(00:15:36) Challenges and Lessons from Overseas Expansion

(00:18:47) Cultural and Market Differences in Digitalization

(00:20:30) E-commerce Penetration and Future Trends

(00:22:18) Competitive Advantages in Japan's Market

(00:25:27) Rakuten's Mobile Network Ambitions

(00:30:36) Financials and Market Position

(00:37:24) Future Prospects and Risks

(00:39:10) Rakuten's E-commerce and Finance Growth

(00:40:07) Mobile Network Expansion and Challenges

(00:41:05) Customer Acquisition Strategies

(00:43:26) Comparing Rakuten to Competitors

(00:48:15) Financial Performance and Margins

(00:50:39) Capital Allocation and Long-term Strategy

(00:53:13) Risks and Future Potential

(00:56:17) Lessons from Rakuten

Rakuten: Rewiring Japan’s Digital Economy

Introduction

Matt
Welcome back to Business Breakdowns. This is Matt Reustle and today, we are heading to Japan to cover the Internet conglomerate, Rakuten. To break down Rakuten, I'm joined by Matt Brett, the Lead Manager of the Japan Trust at Baillie Gifford. And Rakuten is the unique Japanese conglomerate that wasn't started over 100 years ago. Instead, it was part of the late '90s global Internet boom. And Matt explains what was different about that Internet boom in Japan and how Rakuten was really shaped from it.

We also get into the various business lines from traditional e-commerce to the credit card business and others, but notably how the loyalty point system here has become the glue connecting everything together. I think we cover a lot of conglomerates. Sometimes, it's not obvious how they all fit together. I think in this particular case, it is obvious how they've made this all work. And then perhaps the most interesting part of the conversation was covering Rakuten's major investment into the mobile phone market.

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