02.11.17 Overseas Sales Strategy, E-Commerce Company Ken ... · Rakuten Ichiba Money Transfer Products are sent to the customer from oversea warehouse. 45 Fees are negotiable with

02.11.17

Overseas Sales Strategy, E-Commerce Company

Ken Kayama

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Intro to Japanese EC market

Preferences and behavior of Japanese consumers

Rakuten Group Introduction

Rakuten Ichiba (marketplace) Introduction

Overview of Rakuten’s Cross Boarder Program

How to Onboard (fees and steps)

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Joined Rakuten in 2013.

Consulted with over 2000 companies to open a shop in

Rakuten Ichiba marketplace.

My mission is to provide sales channel for overseas sellers to

expand their global sales and provide more product variety for

Rakuten users for more happiness!

Ken Kayama, Overseas Sales Strategy Group Assistant Manager

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EstoniaJapan

7,877 km & 7 hours difference

Land

Population

# of Prefecture

127 million people

377,915 km2 (almost same as Finland)

Major Cities

47 prefectures

Tokyo, Osaka, Nagoya

Ethnic Group 95.8% Japanese

Literacy < 99%

English Literacy 35th in the world

Source: Bloomsburg exchange rate. 30.10,2017

6Source: http://ecodb.net/country/JP/

Major IndustryAutomobiles, electronic equipment, machine tools, steel,

non-ferrous metals, marine products, chemicals, textile products

GDP Composition Ratio

Primary Sector (Agriculture, Forestry and Fisheries) 1.1%

Secondary Sector (includes mining and electricity) 25.6%

Third Sector (communication, financial, retail-related services) 73.2%

Export Item Automobiles and parts:19.9%, Steel: 5.4%, Semiconductor 5.1%

Major Export Countries US: 18.5%, China: 18.1%, Korea: 7.9%

Import Item Crude oil and petroleum: 20.9%, liquefied natural gas 8.7%, food products 8.0%

Major Import Countries China 21.7%, Americas 8.4%, and Australia 6.1%

GDP (nominal)

Per Capita

€4.31 trillion

€34,129

Exchange Rate

Unemployment Rate

€1 = ¥132.15

2.8%

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Rank CountryMarket Size

(Billion €)

1 China 380

2 US 273

3 UK 73

4 Japan 65

5 Germany 57

6 France 34

7 South Korea 30

8 Canada 22

9 Russia 16

10 Brazil 15

4th

largest global

e-commerce market

100

Million Internet users

82.8%

Internet Penetration

Source: http://www.statista.com/statistics/377624/leading-countries-retail-e-commerce-sales/

Exchange Rates: $1= €0.89 (as of May 31th, 2017)

http://www.statista.com/statistics/377624/leading-countries-retail-e-commerce-sales/

8Source: Sources: eMarketer, Japan Ministry of Economy, Trade and Industry, B2C Sale

Exchange Rates: $1= €0.89 (as of May 31th, 2017)

EC Ratio in %

62.6 68.076.5

93.7102.9

110.7121.7

2.84%

3.17%3.40%

3.85%

4.37%

4.75%

5.43%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2010 2011 2012 2013 2014 2015 2016

EC Market Size EC Ratio

€ Billion CAGR = 11.7%

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Japan vs US E-Commerce Penetration Rates (%)

GAP= Potential

10Source: Criteo, Inc. Mobile commerce report

http://www.criteo.com/media/5333/criteo-mobilecommercereport-h12016-us.pdf

http://www.criteo.com/media/5333/criteo-mobilecommercereport-h12016-us.pdf

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12"Reference: ：PayPal and Ipsos,”PayPal Cross-Border Consumer Research 2015”"

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➢ Don’t just translate English product

descriptions – localize!

➢ Use high quality images / video.

➢ Make sure content is optimized for

mobile.

➢ Leverage user generated content.

➢ Weights and dimensions in metric

units.

➢ Apparel sizing conventions vary by

country.

99% of population speak

Japanese almost exclusively

Over 60% of orders are

from mobile devices

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1997: Company was founded by Hiroshi Mikitani and 5 members.

Rakuten Ichiba: Began with only 13 shops

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Establishment: Feb, 1997

Office : Crimson House (Tokyo, Japan)

Employees : 14,134 (as of Dec 31, 2016)

Market cap : 2 billion USD (as of Dec 31, 2016)

Businesses : Rakuten Ichiba (e-commerce) and approximately 70 other businesses

20th Year Anniversary

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1997

13

Merchants

2004

Sports Business E-commerce

platform

1997

POINT

2004

Loyalty Program

2010

Credit Cards

2010

Global ExpansionPartnerships

2017

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Save1% off the purchase

Digital Currency1RSP = ¥1

ExchangeExchange to e-money and mileage

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Available at Thousands of Offline Stores

Use!

Save!

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Cross-use Rate that Rakuten members

use more than two services

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Annual Transaction

€24 Billion in 2016*

44,453 merchants

on Rakuten Ichiba

*Gross Merchandise Sales of overall domestic EC

87.5 Million peopleLog into Rakuten every 3

months

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B2B2C(Largest GMS in

Japan; Exclusive

Merchant Support

System)

Products, not

merchants (Commodity items, pure

price competition)

C2C + B2C

(Auction-style, free

shops attract

small/casual merchants)

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More than 50% of Ecommerce Transaction Take Place in One of The 3 Major Players

29*Mobile GMS ratio = Ichiba Mobile GMS / Total Ichiba GMS (includes feature phones, smartphones, and tablets)

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Brands and retailers can control their own storefront, product

pages, and customer experiences within the marketplace

Major Global

E-commerce Competitors

VS

Rakuten

Product

Centric

Shop

Centric

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Amazon Rakuten

Pricing Branding

Tell

your customers

what makes

your products

so special!

Commodity items,

pure price

competition

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Own Branded Web Site

• Strong Membership & point program

• Localized to the domestic customers

• Support from EC Consultant

• Well known sales campaigns

• Payment info is already saved

Benefit

Online Shopping Mall

• Hard to drive traffic at first

• Customers can’t find the page

• Difficult to do market research

• No support from local team

• Hesitant to register credit card info

Concern

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Taking out barriers such as language, operation, and payment

expanded cross boarder trading from overseas merchants to Japan.

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• Performance feedback and

improvement consulting

• Marketing strategies

• Promotional guidance

Sales

Consultant

• Japan market knowledge

• Account setup advice

• Store design suggestions

• Merchandising guidance

E-Commerce

Consultant

Opening a Merchant Account Ongoing Account Management

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One example of Rakuten Sponsored Campaign (no fees to merchants)

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42Reference: Japan Customs (http://www.customs.go.jp/)

Around €125

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YES

NO

Non-Japanese Company

Operated by service partner

Shipping: Cross-boarder & domestic

Operated by Japanese entity

Shipping: Domestic

Japanese Legal Entity

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Cross Boarder

Overseas

Seller Rakuten Inc. JP Customer

✓ Customer Service

✓ Store Operation

✓ Handle Payment✓ Shipping

✓ Buyer

✓ Importer ✓ Market place

✓ Service provider

Order Data

Service

Partner

Item Data

Private Import

Responsibility

Purchase

Data

Money

Transfer

Page

Creation

Oversea

Warehouse

Support from Rakuten

Shipping

Information

Customer Support

Payment

Sign up for

Rakuten Ichiba

Money

Transfer

Products are sent to the customer from oversea warehouse.

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Fees are negotiable with each of the service partners. The fees listed below are all basic fees for your reference only. For

further details on their services and exact costs, please feel free to directly contact the service partners. Please ask your

Rakuten representative for the service partners’ contact information.

Initial Cost

contract 300,000JPY(less than 30 items)

1,600,000JPY 250,000JPY

5,000USD

Page Setup Fee

Running CostMonthly

100,000 JPY 450,000JPY 70,000JPY

None2,000～

5,000USD

Commission 7%～12% 3% 7～15% 15% ～ 35% 10～15%

Optional Fees

Translation 15JPY / word ask JPY8/word

Photoshoot 10,000JPY ask ask

Customer support ask 200,000JPYIncluded in

commission

2,235 EUR11,924 EUR 1,863 EUR

745 EUR 3,353 EUR 521 EUR

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90% of new shops choose either

Standard or Beginners Plan

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• ¥50,000：Monthly Cost （payable every six months)

• ¥3,000：Credit Card Payment (payable every month)

Fixed Cost：¥53,000

• 4%～2%：Sales Margin (via mobile +0.5%)

• 0.1%：Insurance fee

• 1%：Rakuten Super Point fee

• 2.65％～3.6％：Payment fee

• Credit Card

• Rakuten MultiPay

• Rakuten Bank

• 1.3％ Affiliate (If purchased via affiliate)

Monthly Variable Cost：8.7％～

or 10％～(Affiliate Included) - (payable every month)

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• ¥19,500：Monthly Cost （payable once a year)

• ¥3,000：Credit Card Payment (payable every month)

Fixed Cost：¥22,500

• 6.5%～3.5%：Sales Margin (via mobile +0.5%)

• 0.1%：Insurance fee

• 1%：Rakuten Super Point fee

• 2.65％～3.6％：Payment fee

• Credit Card

• Rakuten MultiPay

• Rakuten Bank

• 1.3％ Affiliate (If purchased via affiliate)

Monthly Variable Cost：12.5％～

or 9.5％～(Affiliate Included) - (payable every month)

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Standard

Plan

Beginners

Plan

Choose Standard if your monthly

sales target is > ¥1.3 million

Cost

Sales

Check List (mutually exclusive)

# of SKU > 20,000

Total memory for images > 5GB

Monthly Sales Target > ¥1.3 million

Items to Consider for Choosing Shop Plan

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DiscoveryDiscuss your business requirements and sales objectives with our oversea dedicated team!

Application & ScreeningAfter you send the application Rakuten will approve and send you account info.

Shop Page CreationRakuten can also introduce 3rd parties who are experts on creating Japanese webstore.

Open ScreeningRakuten will review if your store is ready to open.

Launch YourRakuten StoreStart Selling on Rakuten!

About 2 weeks About 3-4 weeks 2-3 Business Days

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Documents

02.11.17 Overseas Sales Strategy, E-Commerce Company Ken ... · Rakuten Ichiba Money Transfer Products are sent to the customer from oversea warehouse. 45 Fees are negotiable with