You can then use those points to pay for goods and services at any Rakuten company like say, Rakuten Mobile. If you buy something on Rakuten’s e-commerce site, Rakuten Ichiba or at any of its affiliated sites, you get an automatic 1% back in Rakuten Super Points for doing so. Using one universal Rakuten ID card customers can gain Rakuten Super Points and then use those points at any affiliated business. Membership and loyalty programs have been thriving. In Japan, Rakuten has already established this ecosystem and it is paying dividends. CEO Mikitani spoke of the value of the Rakuten ecosystem in a recent interview with CNBC. Rakuten seeks to establish not only its brand name, but also a worldwide ecosystem of businesses that all work together in order to better serve customers. You will now see the Rakuten name on the front of Lionel Messi after each mesmerizing goal. This push was capped off by a $300 million investment into FC Barcelona. The company’s July 2017 announcement of a global brand unification that adds the Rakuten name to every subsidiary begins a push for world-wide brand recognition. Policies like “Englishnization” reveal Rakuten’s necessary global ambitions. All of these out-of-the-box ideas are coming because of Englishnization. Because of Englishnization, we can hire engineers from Facebook, Google, and we can invest in Lyft, or into Pinterest. And we need to hire the best and brightest from around the world. We are seeing a massive change of society because of smart intelligence. And now we are competing in a very dynamic industry. The internet is a global business and you cannot be just domestic. CEO Mikitani gave a speech at his alma-mater in 2016 where he spoke about the effects of this program: The policy seeks to increase communication between the various businesses at RKUNY and enable the company to compete internationally by making all employees learn and then conduct business in only English. This unique global perspective is best exemplified by Rakuten’s self-described “Englishnization” policy, which Harvard-educated CEO and Founder Hiroshi Mikitani established back in 2010. Rakuten describes their business culture as the combination of Japanese values like craftmanship, hard-work, and hospitality, with a Silicon Valley flair for modern technology and pushing boundaries. Below is a flow chart from the FY 2017 Report, which illustrates this division. FinTech is the financial services segment of Rakuten, it contains Rakuten Bank, Rakuten Card, Rakuten Insurance, and Rakuten Securities. However, it is also stocked with Rakuten advertising, Rakuten Mobile, Rakuten TV, as well as a multitude of international subsidiaries including Ebates, Viber Media and OverDrive Holdings to name only a few. Their internet services segment contains expected businesses like the domestic e-commerce business Rakuten Ichiba, one of the largest e-commerce sites in Japan. I believe this is one factor that has led to Rakuten’s current mispricing.įor simplification purposes RKUNY has divided its wide variety of businesses into just two operating segments, internet services and Fintech. The complexity and breadth of these businesses makes an in-depth analysis of the company challenging for investors and analysts alike. Rakuten is a rapidly growing international conglomeration of businesses. RKUNY is not just a Japanese e-commerce firm, but rather a global and growing ecosystem of businesses that is set to compete with the likes of Amazon ( AMZN) for years to come. Based in Japan, Rakuten employs 14,485 people and their 70+ businesses span e-commerce, digital content, communications, banking, insurance, advertising, sports and leisure and more. Rakuten ( OTCPK:RKUNY) ( OTCPK:RKUNF) should be considered a dark horse of the global e-commerce arms race.
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