Japanese online retailer Rakuten expects to defy European gloom

Reuters News
Posted: Mar 22, 2013 9:06 AM
Japanese online retailer Rakuten expects to defy European gloom

By Alice Baghdjian

LONDON (Reuters) - The head of Japanese online retailer Rakuten Inc is used to defying convention, having quit the safety of a job at the Industrial Bank of Japan at the age of 31 and insisting employees at his new business spoke English at work.

Now Hiroshi Mikitani, or Mickey as he is known by his staff and on his business card, is trying to buck another trend -growing his brand of online "shopping mall" in Europe's recession-hit retail sector.

"We're very confident we'll be able to grow in any kind of (economic) circumstance," Mikitani told Reuters in an interview.

At Rakuten's websites, merchants from egg sellers to jewelers can create online shopfronts and post blogs and photos to communicate with customers, something which Mikitani hopes will give the firm an edge over rivals like e-Bay and Amazon.com, and tempt European consumers to spend.

"Of course we'll be price competitive and very efficient but more than that we'd like to create a very unique shopping experience through which we'd like to differentiate ourselves," said Mikitani, who has an MBA from Harvard.

Largely unknown outside Asia, Rakuten is hoping to tap into a shift in shopping habits in Europe as time-pressed consumers increasingly spend online rather than in bricks-and-mortar stores.

But the group will also have to wrestle a flagging economy, with nearly 19 million people out of work across the euro zone, where retail sales fell in January year-on-year.

Rakuten, which also owns the Kobo brand of e-reader, has been ramping up global expansion as Japan's shrinking population and weak consumer spending has forced it to seek new markets.

The company, which operates in more than a dozen countries, owns several shopping websites in Europe, including France's PriceMinister, Germany's Rakuten.de, and Britain's Play.com.

After a painful restructuring of Play.com, which contributed to overall one-off costs of 28.5 billion yen ($300 million) in 2012, Mikitani said the website is showing "healthy" growth in annual sales, though he did not give exact figures.

The company, with a market capitalization of about $13 billion, reported record 2012 net sales of 443.4 billion yen.

($1 = 95.0550 Japanese yen)

(Editing by Mark Potter)