Introduction
Rakuten is a Japanese e-commerce company that has become a household name in the global market. Founded in 1997, it aims to be the world’s largest online shopping mall and has achieved this goal to a great extent. Rakuten offers customers a wide variety of products from various sellers, including electronics, clothing, toys, and more. It has a presence in 29 countries and has over 1.3 billion registered users. This article aims to explore how Rakuten makes money and the significance of understanding its business model.
Overview of Rakuten’s Business Model
Rakuten’s business model is based on commission, advertising revenue, affiliate marketing, acquisitions and strategic investments, credit cards, and mobile services. Rakuten provides a platform where various sellers can connect with buyers globally, allowing them to increase their reach and grow their business. It generates income from commissions, advertising revenue, and credit cards, among others.
E-commerce Commissions
Rakuten earns a commission on every sale that passes through its marketplace. As a result, it provides an incentive for sellers to join the platform as they can reach a larger number of customers than they would on their own. The percentage of sales revenue sellers must pay to Rakuten varies by product category, although it typically ranges from 5% to 15%.
Advertising Revenue
As the online advertising market continues to grow, Rakuten generates revenue from adverts. It provides a platform for marketers to advertise their products and services to potential customers. Additionally, it generates income for displaying adverts on its website. Advertisers pay Rakuten a fee for every click generated by the ad or other metrics such as impressions.
Affiliate Marketing
Through Rakuten Affiliate, shareholders earn a commission by promoting Rakuten as a service to their readers and followers. Rakuten operates one of the largest affiliate marketing networks globally. The seller pays a portion of the sale to the publisher, providing an incentive for website owners and publishers to promote the product. Rakuten benefits from this by increasing its market share and increasing sales.
Acquisitions and Strategic Investments
Rakuten invests in companies that provide synergies with its existing business model. These investments help Rakuten increase its market share in new markets, build its technology platform, and provide it with new products. As the company benefits from the return on investment, it profits from capital gains, dividends, and other forms of return.
Rakuten Credit Cards
Rakuten offers credit cards in collaboration with leading banks. Every transaction made by cardholders generates revenue for the company. Additionally, Rakuten provides monetary incentives to encourage customers to use the card, boosting their revenue. This service is intended to increase customer loyalty to the brand, which generates additional revenue and also cross-selling opportunities.
Rakuten Mobile Services
Rakuten provides a range of mobile-related services, such as Rakuten Mobile, Rakuten Viber, and Rakuten Travel. These services include messaging, voice calls, international calling, and mobile travel booking. Rakuten generates income from user subscriptions and downloads of the applications.
Conclusion
In conclusion, it is crucial to understand how Rakuten generates revenue as it impacts the company’s growth and success. Rakuten’s business model is based on several sources of income such as commissions, advertising revenue, affiliate marketing, acquisitions and strategic investments, credit cards, and mobile services, among others. Understanding the ways that Rakuten makes money can help consumers better understand how to use the platform and what to expect, and how investors may evaluate the company’s financial performance and potential returns.
