Rakuten Group, Inc.: history, ownership, mission, how it works & makes money

A Brief History of Rakuten Group, Inc.

Founded in 1997 by Hiroshi Mikitani, Rakuten Group, Inc. began as an online marketplace known as Rakuten Ichiba. The company quickly gained traction and became Japan’s largest e-commerce site. By 2000, Rakuten went public on the Tokyo Stock Exchange, solidifying its position in the Japanese market.

In 2004, Rakuten expanded internationally by acquiring the German e-commerce site, Buy.com, which marked its first major push into foreign markets. Its global strategy continued with the acquisition of other companies, including a significant purchase of the U.S. online retailer, PriceMinister, in 2010.

In 2012, Rakuten launched a mobile payments service called Rakuten Pay, positioning itself to compete in the fintech space. The company also made aggressive moves to diversify its offerings, including the launch of Rakuten TV and Rakuten Kobo, a digital reading platform.

Rakuten has maintained a strong presence in various sectors, including e-commerce, fintech, digital content, and telecommunications. By 2019, Rakuten had successfully transitioned into a mobile network operator with the launch of Rakuten Mobile, aiming to disrupt the telecommunications industry in Japan.

In terms of financial performance, Rakuten reported revenue of approximately ¥1.4 trillion (around $12.7 billion) for the fiscal year ending December 31, 2022. The company has seen consistent growth, with a reported net income of ¥139.9 billion (approximately $1.25 billion) for the same period.

The following table illustrates Rakuten's key financial figures over the last few years:

Rakuten's international expansion has continued to be a focus, with investments in various startups and technologies. In 2021, it invested approximately $1 billion in various tech startups as part of its strategy to create an ecosystem that integrates its various services.

As of October 2023, Rakuten remains a dominant force in Japan's e-commerce and telecommunications markets, leveraging its diverse portfolio to maintain leadership in the digital space. The company's membership program, Rakuten Super Points, has been critical in driving customer engagement and retention.

In the telecommunications sector, Rakuten Mobile achieved over 4 million subscribers by the end of September 2023, demonstrating its rapid growth trajectory amid fierce competition.

Overall, Rakuten Group, Inc. exemplifies a successful and adaptive business model in the dynamic e-commerce and technology landscapes. Its dedication to innovation and customer loyalty continues to fuel its growth ambitions, positioning it well for future expansion both in Japan and globally.

A Who Owns Rakuten Group, Inc.

Rakuten Group, Inc. is a publicly traded company listed on the Tokyo Stock Exchange under the ticker symbol 4755.T. As a major player in e-commerce, telecommunications, and various other sectors, understanding its ownership structure is crucial for investors and analysts.

As of October 2023, Rakuten's ownership is divided among several key stakeholders, including institutional investors, retail investors, and the company's executives. The following table summarizes the major shareholders:

The significant ownership by Hiroshi Mikitani highlights the founder's influence over the company's strategic direction and operations. Institutional investors like BlackRock and Vanguard have shown interest in Rakuten, contributing to its overall market stability and credibility. The remaining portion held by retail investors reflects a diverse base of shareholders, indicating public interest in the company's prospects.

In terms of financial performance, Rakuten reported a revenue of 1,571 billion JPY for the fiscal year ending December 2022, showing a growth of 12.4% year-over-year. The net income for the same period was approximately 69 billion JPY, marking a significant increase from the previous year's profit of 49 billion JPY.

As of September 2023, Rakuten Group's market capitalization stands at approximately 3.2 trillion JPY, reflecting its substantial value within the tech and e-commerce sectors in Japan. The company's stock price has fluctuated between 1,200 JPY and 1,600 JPY over the last year, with an average trading volume of around 5 million shares per day.

Overall, the ownership structure and financial metrics of Rakuten Group, Inc. present a compelling case for further examination by potential investors and analysts alike. The balance of control between institutional and retail investors, combined with strong financial growth, positions the company as a dynamic entity within its industry.

Rakuten Group, Inc. Mission Statement

Rakuten Group, Inc., a leading Japanese e-commerce and internet company, articulates its mission as a commitment to empowering individuals and society through innovation in technology and services. The company’s focus is on creating a world where consumers can choose and connect with brands easily, thus enhancing their overall online experience.

As of 2023, Rakuten has diversified its operations across multiple sectors, including e-commerce, fintech, digital content, and telecommunications. The mission statement reflects their goal: "Empowering people and society through the Internet." This mission drives their strategic initiatives and corporate philosophy.

In the fiscal year ending December 2022, Rakuten Group reported:

• Total Revenue: ¥1.52 trillion (approximately $11.5 billion)
• Operating Income: ¥127 billion (approximately $960 million)
• Net Income: ¥78 billion (approximately $580 million)
• Number of Active Customers: 100 million globally
• Rakuten Wallet users: 3 million
• Rakuten Mobile subscribers: 5.5 million

The mission is supported by their various business milestones, including the following:

Rakuten's mission influences its sustainability and social responsibility initiatives. The company has set targets to reduce carbon emissions by 30% by 2030, aligning with global environmental standards.

Moreover, Rakuten invests heavily in technology and innovation, spending about ¥200 billion annually on R&D to enhance its service offerings and maintain a competitive edge in the market. This investment directly supports their mission to innovate and improve user experiences across platforms.

Rakuten has achieved recognition in various markets due to its customer-centric approach. The company's growth in user engagement is evidenced by an increase in the average transaction value, which rose by 15% from 2021 to 2022, reflecting the strength of its mission in driving consumer loyalty.

How Rakuten Group, Inc. Works

Rakuten Group, Inc., a Japanese e-commerce and online retailing company, operates across various segments including e-commerce, fintech, digital content, and communications. Founded in 1997, Rakuten has established itself as a major player in Japan and globally. As of 2023, the company reported revenues of approximately ¥1.52 trillion (about $13.9 billion), showcasing a robust business model that leverages various interconnected services.

E-Commerce Division

The e-commerce platform, Rakuten Ichiba, remains the centerpiece of the company’s operations. It serves as a marketplace connecting consumers with merchants, featuring over 100 million listed products. In 2022, Rakuten Ichiba generated around ¥1 trillion in GMV (Gross Merchandise Volume), accounting for roughly 66% of Rakuten's total revenue.

Fintech Services

Rakuten's fintech division encompasses online banking, securities, and insurance. The notable Rakuten Bank has over 10 million accounts as of 2023. This segment reported revenues of ¥240 billion, contributing 16% to the company’s total earnings. Rakuten Securities, another significant player, holds assets under management exceeding ¥6 trillion.

Digital Content

This segment includes streaming services, e-books, and other digital content offerings. Rakuten Viki and Rakuten Kobo are prominent products in this area, with Rakuten Viki having a subscriber base of over 5 million. Revenue from digital content was approximately ¥190 billion, representing 12% of total revenue in 2022.

Communications

Rakuten Mobile, launched in 2020, aims to disrupt the telecommunications market in Japan. As of early 2023, it has garnered around 4 million subscribers. The communications segment generated revenues of about ¥80 billion, contributing 6% to the total revenue.

Strategic Partnerships and Innovations

Rakuten continuously seeks strategic alliances to bolster its ecosystem. For instance, its partnership with the NBA has enhanced brand visibility and consumer engagement. Furthermore, the company invests significantly in technology, with annual R&D expenses around ¥100 billion, aimed at enhancing its tech stack and customer experience.

Stock Performance

As of October 2023, Rakuten's shares are traded on the Tokyo Stock Exchange with a market capitalization of approximately ¥1.5 trillion (around $13.7 billion). The stock price has shown volatility, reflecting changes in global e-commerce trends and competition. Analyzing its stock performance reveals a year-to-date increase of about 15% as investors react positively to its diversified business model.

Conclusion of Financial Overview

Rakuten's multi-faceted approach allows it to capture synergies across its various businesses. By integrating e-commerce, fintech, digital content, and telecommunications, it not only enhances customer retention but also drives significant revenue growth. The flexibility in its operational structure has positioned Rakuten as a resilient entity amid changing market dynamics.

How Rakuten Group, Inc. Makes Money

Rakuten Group, Inc. generates revenue through various channels, primarily focusing on e-commerce, digital content, telecommunications, and financial services. Here’s a detailed breakdown of its revenue streams.

E-commerce Revenue

The core of Rakuten's business model is its e-commerce platform. As of the fiscal year 2022, Rakuten's e-commerce segment reported revenues of approximately ¥1.29 trillion (around $11.7 billion), marking a year-on-year increase of 9.1%.

Digital Content

Rakuten provides various digital content services, including video streaming, e-books, and music services. For the fiscal year 2022, the revenue from its digital content division was approximately ¥232 billion (about $2.1 billion), reflecting a growth of 15% from the previous year.

Telecommunications

The telecommunications segment, operated under Rakuten Mobile, contributed significantly to the company's overall growth. In fiscal 2022, Rakuten Mobile reported revenues of around ¥346 billion (approximately $3.1 billion), driven by an expanding customer base which surpassed 4 million subscribers.

Financial Services

Rakuten also generates considerable revenue from its financial services, including payment processing, banking, and insurance. This segment's revenue for fiscal year 2022 reached about ¥328 billion (close to $3 billion), comprising a variety of services such as Rakuten Pay and Rakuten Bank.

Advertising Services

Advertising is another significant revenue source for Rakuten, leveraging its extensive e-commerce platform and customer data. In fiscal year 2022, advertising revenue amounted to approximately ¥141 billion (around $1.3 billion), an increase of 20% year-over-year.

International Revenue

Rakuten also earns revenue from its international operations, which include investments in various companies and strategic partnerships. In fiscal 2022, international revenue contributed roughly ¥120 billion (about $1.1 billion), with notable growth in the U.S. and Europe.

Revenue Overview Table

Rakuten's diverse revenue model allows it to leverage cross-selling opportunities among its various platforms, enhancing customer retention and increasing average revenue per user (ARPU). The company's commitment to innovation and expanding its service offerings continues to play a crucial role in its growth trajectory.

Customer Base and Engagement

Rakuten's loyalty program, Rakuten Points, has approximately 100 million registered users globally. This program drives repeat purchases and deeper engagement with Rakuten’s e-commerce platform. The integration of points across its various services amplifies customer loyalty and spending.

Strategic Investments

In addition to its operational revenue streams, Rakuten focuses on strategic investments in technology and startups to enhance its service capabilities. The company announced investments exceeding ¥50 billion (around $450 million) in AI and fintech over the next few years, aiming to stay ahead of market trends.