Rakuten Inc., the Japanese conglomerate, is a leading global company that offers e-commerce platforms, digital content, communications services, and fin-tech solutions to over one billion members around the world.
Later in 2010, in an attempt to expand the retail business out of Japan, the company acquired Buy.com in 250 Million Dollars.
And recently, the company has decided to discontinue its U.S. online retail store and will wind up all the operations in another two months. The shutdown suggests that the U.S. headquarters will lay off its staff as well, meaning 87 people will be unemployed, according to a source familiar with the developments.
A company representative in an email to TechCrunch said, “We have decided to sunset the U.S. Rakuten Marketplace.” They, however, clarified that the “cash-back rewards” referral business the company operates at Rakuten.com is not shutting down and is stronger than ever.
The company says that the customers will be able to place their orders for the next two months before the entire shut down. But the users of the rewards and commission business will not apprehend any major difference, and any other SBU won’t be affected by the decision.
The major reason behind the decision is the evolving market and aggressive business structure of Amazon, which leaves not much scope for other businesses to thrive and succeed. The poor choice to rebrand the well-established site under Rakuten name and the strategies associated with it. The original CEO and COO also left in 2012. With the rebranding decision, the site was populated entirely by individual merchants, whereas previous iterations of Buy.com had just a portion of the site devoted to independent sellers.
In 2010, Hiroshi Mikitani, founder and chief executive of Rakuten, quoted “The acquisition of Buy.com was part of efforts to accelerate our global expansion. We feel it has a great strategic fit with our purpose. Our goal is to become the number one e-commerce company and Internet company in the world.”
In 2013, Alan Brew, Senior vice president at RiechesBaird, a branding agency in Irvine and New York says that the name change is far from inconsequential. According to him, “The name tells us nothing, which is a problem. What Rakuten stands for as a brand in the U.S. is the challenge – awareness, proposition, differentiation.”
The firm has diversified and invested in numerous companies and industries around the globe. e-commerce giant Rakuten has launched its exchange for crypto spot trading and now seem to be making plans to jump on board with similar projects.
Rakuten Blockchain Lab, based in Belfast that will explore the potential of the blockchain.
Also, Kobo e-reading division is the second-largest e-reader and ebook retailer in the world. It is doing a better job in innovating e-readers as compare to its close competitor Amazon.
Rakuten’s many such acquisitions and joint ventures helped it to expand its product lines, and increase the global reach.