Rakuten reports rapid growth in local retail market
The Jakarta Post
Rakuten Belanja Online (RBO), the local unit of leading Japanese e-commerce player, Rakuten Inc, said that it expects to maintain the rapid growth it has experienced in its one-and-half years of operating in Indonesia, as more youth adopt the Internet.
RBO is the result of a joint venture between Rakuten Inc. and listed local media conglomerate, PT Global Mediacom (MNC Group), whose media outlets include Global TV, Rajawali Citra Televisi Indonesia (RCTI) and Sindo daily newspaper.
Ryota Inaba, the president director and CEO of PT Rakuten MNC, said that Rakuten Indonesia had roughly 60 merchants selling a total of 40,000 products during the launch of the website in June 2011.
However, the number of merchants and products offered through the website has grown over 500 percent in the past one-and-a-half years.
“Now, around 400 merchants have signed up with us to offer over 300,000 products,” he said at the Rakuten Expo Jakarta 2012 held on Monday.
Meanwhile, Rakuten Ichiba, the e-commerce division of Rakuten Inc. and largest online mall in Japan, has more than 40,000 merchants and 100 million products.
Besides the e-commerce division, Rakuten Inc. has acquired eReading service company, Kobo, and has a US$100 million investment in online pin board, Pinterest.
Inaba added that the growth exhibited by the Indonesian unit was “good and promising”, given that the number of merchants and products on the website had surpassed the original target of having 200 merchants offering over 150,000 products by the end of 2011.
“In the first 10 months, we have been able to more than double the number of merchants and more than double the number of products registered,” he said.
He further said that in terms of sales, the website had seen a double-digit growth from month to month and a triple-digit annual growth.
Inaba noted that up to 80 percent of the merchants on the website fell under the small-and-medium enterprise category, with the remaining 20 percent made up of big companies such as Sony, Dell and Nissin.
However, the best selling products were gadgets, with these items making up 50 percent of goods for sale, he added.
“But since April, we have been focusing on fashion as well as the food and beverages category because they are the things you find easy to buy and do not think twice about,” he said.
Reino R. Barack, the director of PT Rakuten MNC, said that gadgets sold well given that purchases on the website were “very male driven”.
“However, we would like to shift that strategy to create a 50:50 ratio between male and female [buyers],” he said.
Hary Tanoesoedibjo, CEO of MNC Group, said that the joint venture between the group and Rakuten Inc. last year was part of the strategy of the group, strong in the traditional media business, into the digital realm.
He pointed out that RBO was still a “baby” compared to its Japanese counterpart, but would grow rapidly once the company “reached its threshold”.
Factors that would help RBO hit this threshold was the growing youth population who were keen adopters of the Internet.
He pointed out that Internet penetration in Indonesia was still at 20 percent, or roughly equal to 50 million people of the Indonesian population of around 240 million people. He also noted that approximately 70 percent of the Indonesian population was under 40-years-old.
He added that the group planned to introduce its search engine platform into the local market next year, but declined to provide further details on the plan.
The group had previously announced its collaboration with Tencent, China’s leading online portal, to provide online communication and gaming products to the local market.
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