Rakuten seeking to build Singapore as its regional hub

SINGAPORE- Japan's biggest e-commerce site Rakuten may only be officially setting up in Singapore later this month but it already has 70 local merchants on board as it works towards building its regional hub in Singapore.

Shingo Okamoto, head of Rakuten's Singapore e-commerce business, told BT in an interview that the Singapore marketplace will officially launch in mid-January, and that it aims to get 300 local merchants to join its site within a year.

Rakuten's marketplace here will focus on Japanese products such as fashion items, books, games, electronics, toys and household items, giving the 40,000 Japanese merchants in its Japanese marketplace a foothold in the Singapore market as well, he said.

But Mr Okamoto added that Rakuten will welcome any merchant based in Singapore that is keen on establishing or expanding its online presence.

"We are also open to merchants based elsewhere looking to extend their footprint to the Singapore market," he said.

Rakuten is targeting for a mix of 70 per cent Japanese and 30 per cent local merchants in its market place here. The company's primary aim, Mr Okamoto said, is "to provide employment for small merchants, not only Japanese but also local".

The 70 local merchants that have signed up with Rakuten include Toys R Us, wellness and beauty products provider Cerebos, as well as food and beverage group RE&S.

Even though Rakuten is yet to officially launch in Singapore, it has previously been selling products from Japan to customers here. Fashion items and accessories are among the most popular products Rakuten sells to Singapore consumers, with confectionary goods and food products also proving to be a hit among buyers here, Mr Okamoto said.

But it is not just Singapore that the Japanese e-retailer has its sights on - it plans to expand into the region from here. In expanding Rakuten internationally, it is a challenge to try to get smaller Japanese merchants to take their businesses outside of Japan, he said. That is why the company thought Singapore would be a good first step for these merchants to expand into the region.

"If we succeed in this project, we can expand our business. So Singapore is like a 'test bed' for us."

He explained that Singapore's sophisticated logistical network and infrastructure means that it is easy to import goods and that could help the merchants build a base in Singapore to export goods to the rest of the region.

In fact, Mr Okamoto revealed, Rakuten plans to establish a warehouse in Singapore in two years' time to store its local and Japanese inventory, allowing it to ship goods to regional countries from here. This would be more effective than shipping goods directly from Japan, which Rakuten now provides to South-east Asian consumers who purchase online from their Japanese retail site.

Rakuten is therefore looking to establish partnerships with Singapore-based logistics and payment companies so as to support their trade into the region from here.

At present, the company is partnering Singapore Post (SingPost), TaQBin and Yamato for its logistical needs in Singapore. Customers can, for instance, pick up the products they purchase from Rakuten at SingPost's 15 POPStations near MRT stations and shopping malls, allowing customers to collect their parcels at any time. For refrigerated or frozen food products, customers can opt for TaQBin's refrigerated or frozen delivery service.

For payment, Rakuten's current partnerships with Visa and Mastercard means customers can pay using these two modes, but the company said it is also exploring additional payment methods for greater flexibility for its customers.

Source: AsiaOne 8th January 2013

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