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Rakuten corporate summary

Rakuten in early stage (pre-IPO) Rakuten in growth stage Rakuten in global expansion stage

Rakuten Ichiba summary

Rakuten Ichiba business model Rakuten Ichiba success secret Rakuten Ichiba Taiwan summary Rakuten Ichiba future

Comparison with Easy Pha-max

Business model Operation Things to learn from Rakuten Ichiba


A former banker at age of 35, founded Rakuten in 1997 during Internet boom and brought the company to IPO in 2000.

Mr. Hiroshi Mikitani,

Chairman & CEO Rakuten Inc.

40million members 3rd Jul 08 Ranked No. 5 in Japan top website Alexa No. 1 retail brand in Japan & 14th Consumer Brand Exceed 24,000 merchants Q2 08 Net sales of US$1.76bil & US$304mil net income 2007 financial report Hired aprox. 3400 employees IPO in Jasdaq 2000

1993 1995: Mikitani earned his MBA in Harvard, and join Bank of Japan when he returned 1995: Mikitani left his job with Bank of Japan to start an online business with his own money 1997 2/7 : founded MDM, Inc. with 5 employees 1997 5/1 : Rakuten Inchiba (cybermall) launched, with 13 merchants & first month revenue of US$3200 Initial business model: charging virtual realestate fee of US$475 per year

1999: Mall expanded to 1600 shops & 600,000 registered members 1999 June: rename to Rakuten Inc. 1999 Sept: start Rakuten Auction service Rakuten make $5.7mil sales in 1999, earned $2.4mil profits. 2000 : start Rakuten University teaching e-business Rakuten went public in Jasdaq in Apr 2000 with market capital of $3.1 billion (45% own by Mikitani & his wife)

2000: founded Rakuten USA Inc. Rakuten Books founded as JV with Nippon Shuppan Hanbai Inc. Infoseek Japan acquired by Rakuten Inc as portal services 2001: Showtime Inc for TV shopping 2002: Rakuten travel Inc founded Lycos Japan acquired by Rakuten & merged with Infoseek 2003: MyTrip.net acquired by Rakuten Start Rakuten Securities Inc by acquire DLJDirect SFG Securities 2004: Acquired Minnano Shushoku for career business service Acquire Cyber Brains Consultancy to form Rakuten Research Acquire Aozora Card to form Rakuten Credit Founded Rakuten Baseball Rakuten Eagle Baseball team

2005: Acquire Linkshare Corp (online marketing company) under Rakuten USA Rakuten Auction Inc founded as JV with NTT Docomo Consolidate Kokunai Shinpan to structure Rakuten KC 2006: Rakuten sign ops tie up with Shinsei Bank for online mortgage & Tokyo Bank for online banking business 2007: Rakuten Inc celebrate 10th Anniversary Rakuten Travel open Guam branch Fusion communication acquired by Rakuten to start IP Telephony Rakuten Bank@TTB was founded in alliance with Tokyo Tomin Bank Rakuten move in to new HQ Rakuten Tower Rakuten enter restructuring stage to further improve business efficiency

2007: Rakuten and Taiwan President Chain Store sign JV to start Rakuten Ichiba Taiwan 2008: Rakuten Europe open in Luxemburg as European Hub Rakuten start operation in Bangkok Thailand for travel business

The most successful e-business portal in Japan

240,000 orders a day

Merchants Rakuten Merchants Server (RMS) 40million of Rakuten members Rakuten s ECC (E-commerce Consultants) Rakuten University Members 20million items for selection User-friendly interface Rakuten super point program (loyalty card) Safe shopping service

May 7th 08 : Pre-opening May 27th 08: Grand opening Aug 6th 08: 440 shops & 160k members Hot sales item: Ladies fashion & Japanese products Target 1000 shops by end 2008

Listed Items Package 1 Package 2 Package 3 2,000 items 5,000 items 100,000 items

Monthly Rental NT$ 5,000 NT$ 7,000 NT$ 10,000

Transaction Fees 5% 4% 3%

Others Misc: Training courses for Rakuten University -RMS Training (must attend) : NT$ 3,000

Become the No.1 Internet Service company in the world

Future e-commerce will move from US & EU lead to Asia leads, main reason is due to raising star from China and India consumers. Rakuten s strategy to enter China market will determine if the company World No. 1 goal is achievable.

Rakuten s competitive advantages

Trusted Brand in Japan Large subscriptions of members in Japan Complete e-business eco-system in Japan Large base of merchants in Japan

Challenges for Rakuten ahead

Japan No.1 World No. 1 Competition with Amazon (currently 80mil active members & 2million stores associated with Amazon) Global economy downturn may slowdown its global expansion (but may be a golden opportunity for its M&A strategy if the company is loaded with healthy cash-in-hand)