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2002年度第3四半期 事業進捗状況

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2002年度第3四半期 事業進捗状況 Powered By Docstoc
					        Rakuten Ichiba: At the Forefront of
           Japan's eCommerce Market


                                 December 7, 2004
                                   Rakuten, Inc.

This report contains forward-looking statements based on our current expectations about our company
and our industry. These forward-looking statements focus in our discussions of strategy, plans or
intentions. Such statements involve risks and uncertainties. Our actual results could differ materially
from those anticipated in these forward-looking statements.
     Table of Contents


1. Corporate Profile

2. eCommerce in Japan

3. Success of Rakuten Ichiba

4. Beyond Rakuten Ichiba

5. Group Strategy



                               1
1. Corporate Profile




                       2
             Corporate Profile

 Founded:           February 1997
 Rakuten Ichiba     May 1997
  Service Launch :
 President & CEO:   Hiroshi Mikitani, Founder
 Number of          909 people
  employees:         (as of Sept 2004)
 IPO:               Listed on the JASDAQ
                     exchange in April 2000

                                                 3
2. eCommerce in Japan




                        4
                                        US eCommerce Overview
                            “By 2010, online sales will reach $331 billion. The growing
                            population of online shopping households combined with retailer
                            innovations and site improvements will drive eCommerce to
                            account for 13% of total retail sales in 2010, up from 7% in 2004.
                            Between 2004 and 2010, online sales will grow at a 15% CAGR.”
by Carrie A. Johnson
with Sharyn Leaver and Esther H. Yuen




                        Online Retail Shopper Forecast: 2004 To 2010




                                                                                                                                5
                                        Carrie A. Johnson, “US eCommerce Overview: 2004 To 2010”, Forrester Research, August 2004
                              Japanese B2C eCommerce
      Market may grow to \14 trillion by 2008 with 32% CAGR
                 16

                 14

                 12
(trillion yen)




                 10

                  8

                  6

                  4

                  2

                  0
                      2002   2003   2004     2005      2006      2007         2008
                                Other eCommerce   Auto & Real Estate
                                                                                                     6
                                                              Nomura Research Institute, November 2003
      Japanese EC market to follow US

 We expect Japanese eCommerce market will grow to
  account for 10% of retail market within next 5 to 10
  years (cf. retail market size: $1.2 trillion, personal
  spending: $2.2 trillion)

 Reason
   – Internal and external factors boosting growth of
     online shopping
   – High cost of sales (e.g. rent, distribution cost)
     makes Japanese ideal market for e-commerce,
     excluding “middleman”




                                                           7
                   External Factors

 Deep penetration of broadband
   – Higher conversion rate for broadband users
   – Substantially faster speed to show one page will
     lower hurdle to purchase
      • E.g. Time required to show Rakuten Ichiba top
        page Dial-up: 13 seconds vs. ADSL: 1 second

 Extraordinary growth of mobile commerce
   – Other sites:push-based; focus only on popular items
   – Rakuten: can buy most items sold on Rakuten Ichiba
   – May surpass PC-based e-commerce within next 3 to 5
     years

                                                           8
                    Internal Factors

 Overwhelming number of items sold over the
  internet
    – Over 9 million items sold on Rakuten
    – Substantially higher potential than catalog shopping

 Lowering hurdle for online shopping,
  increasing repeat purchases
    – Understanding the convenience to buy online
    – 60% to 80% of transactions already shifted to online
      for stock trading and airline reservations

   Price advantage of items sold online
    – 20%+ cheaper than “Akihabara Price”
                                                             9
3. Success of Rakuten Ichiba




                               10
                Rakuten Ichiba

 Japan’s largest
  online shopping mall
 10,000+ merchants
 3 million+ items for
  sale
 210 billion yen GMS
  (Gross Merchandise
  Sale )
 7.0 million users              11
     The Original Four Hypothesis


1. the Internet would become
   easier and more convenient;
2. making use of the Internet will
   prevail;
3. people will start shopping
   online; and
4. will subsequently change
   distribution chain in Japan.
                                     12
          Learning from the Giants’ Failures

          Past Failures                Rakuten’s Model

   High cost of maintenance      Low cost
   Low convenience               Easily editable


   Outdated, uninteresting       Frequently updated
    information                    information
   Small number of items         Everything is available
    listed


   No traffic, no sales          Attractive contents, high
   Sellers discouraged            sales
                                  Sellers motivated
                                                               13
  Value Proposition to Merchants




          Knowledge



  Server
                         Traffic
Technology

                                   14
    Value to End Customers




Selection          Convenience



                      Loyalty
  Trust
                      Reward
                                 15
                     Increase in Number of Merchants
              Merchants exceeds 10,000 as of October 2004

1 2 ,0 0 0
                                                  October 2004
1 0 ,0 0 0                      February 2001    Exceeds 10,000
                                Exceeds 5,000      merchants
                                  merchants
 8 ,0 0 0

                        May 1997
 6 ,0 0 0
                     Service started
                    with 13 merchants
 4 ,0 0 0


 2 ,0 0 0


        0
             1997        1998     1999   2000   2001   2002   2003   2004


                                                                            16
           Marketing: Increasing GMS
    Sales Ranking           Utilizing Point Program




Promote Buyer Reviews     Recommend to Earn Points




                                                      17
          Utilizing Point Reward Program
                                          Pon! Kan! Campaign
 Users will earn up to 5x
  bonus points depending
  on the number of
  Rakuten services used
  during a two-month
  period
 Can promote services         Using all six services will give you 5x bonus points

  other than Rakuten
  Ichiba                     Rakuten Ichiba     Rakuten Mobile      Rakuten Books




                             Rakuten Travel     Flea Market         Rakuten Download



                                                                                       18
             Rakuten Credit Card

 No annual fee for life
 1% Rakuten Super Point awarded against all
  card use
 2,000 yen worth of Rakuten Super Point
  awarded as sign-up bonus




                                               19
                Promoting Affiliate Marketing
         Largest Affiliate Marketing Network in Japan
 # of Affiliate Sites:300,000
 Service Features
    Only Rakuten Membership
     required to use the service
    Easy-to-understand interface
 Weblog Service ”Rakuten
  Hiroba” users can add affiliate
  ads easily
 Certain affiliate sites posts
  sales in the millions of yen




                                                        20
Marketing: Personalization


                 Gender/age/past
                  user behaviors -
                  matching product
                  categories and
                  contents for each
                  shopper
                   Better contents
                    displayed lead to
                    higher page access
                    and conversion rates




                                           21
   Marketing: Trial Page for New Users
Testing top page for first-time visitors: +50% conversion

 Regular Top Page                Top Page for First-time Visitors




                                                                    22
4. Beyond Rakuten Ichiba




                           23
                  Q3/04 Financial Highlights (YoY)

                                                                                         (Unit: Billion Yen)
                                                      YoY           Operating       YoY           Operating
                                 Revenues                            Income                        Margin
                                                      chg.                          chg.
E-Commerce Business
     Company                            5.14 +75.2%                    1.62 +69.9% 31.6%
     Portal Business
        Company                         1.48 +14.1%                    0.24 +36.9% 16.1%
 Travel Entertainment
  Business Company                      1.66 +370.8%                   0.52                   - 31.7%
   Rakuten Securities                   3.04                    -      0.86                   - 28.4%
  Internal Elimination                 -0.27                    -      0.06                   -           -
                                                                            +209.2
 Consolidated Results                 11.07 +162.8%                    3.32        30.0%
                                                                                %
※ From Q1/04, changed revenue recognition policy for Signature Japan (Travel Entertainment Business            24
    Company)
     Core Business Segments


E-Commerce             Portal/
                    Content Media



    Online             Financial
Travel Services         Services


                                    25
                               Comparative Position
                                                                                   Golf Tee-time
      Shopping              Travel                Online Brokerage
                                                                                    Reservation
                                                                                                          Community

1 Rakuten           1 Rakuten                   1 E*Trade                     1 Rakuten              1 Rakuten

2 Amazon            2 ISIZE                     2 Matsui                      2 Golf Digest Online   2 Y! Geocities

3 Yahoo!Shopping    3 yadojozu                  3 Rakuten                     3 e-golf               3 2 Channel

4 Bidders           4 bestreserve               4 Kabu.com                    4                      4 teacup

5 Kakaku.com        5 yadoplaza                 5 Monex                       5                      5 tok2.com
※ Rakuten Ichiba    ※ Tabimado+Rakuten Travel   ※ DLJdirectSFG                ※ GORA+Golfport        ※ Isweb+Rakuten Hiroba
※ Unique Audience   ※ Estimated online hotel    ※ Dec, 2003, Domestic Stock   ※ Unique Audience      ※ Page Views
                      bookings                    Trading Volume



        Portal          Greeting Card                   Auction                       Books               B2B Service

1 Yahoo!            1 Rakuten                   1 Yahoo! Auction              1 Amazon               1 Rakuten

2 Rakuten           2 Yahoo! Greetings          2 Rakuten                     2 Rakuten              2 B2B Japan

3 MSN               3 ISIZE eCard               3 Bidders                     3 esbooks              3 e-Anken

4 Goo               4                           4 WANTED                      4 Shogakukan           4 Submit

5 Excite            5                           5 Guruguru                    5 Kinokuni-ya          5 Oshigoto Auction
※ Infoseek          ※ Y!not+Rakuten Greeting    ※ Rakuten Flea Market         ※ Rakuten Books        ※ Rakuten Business
※ Unique Audience   ※ Unique Audience           ※ # of items posted           ※ Unique Audience      ※ # of requests per month

                                                                                                        Source: NetRatings, Rakuten
                                     Growth in Number of Merchants

                      12,000                                                                                                                       40.0%

                                                                                                                                                   35.0%




                                                                                                                                                           YoY Growth, Number of Merchants
                      10,000
                                                                                                                                                   30.0%
Number of Merchants




                       8,000
                                                                                                                                                   25.0%

                       6,000                                                                                                                       20.0%

                                                                                                                                                   15.0%
                       4,000
                                                                                                                                                   10.0%
                       2,000
                                                                                                                                                   5.0%

                          0                                                                                                                        0.0%
                               1
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                                             5
                                                   7
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                           /0
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                                                                     /0
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                         02
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                                              Number of Merchants                      YoY Growth, Number of Merchants                                                                       27
                              Mobile Commerce
                        Mobile GMS growing rapidly
                     YoY growth more than 3 times in Q3                          (Growth Rate)
(Million Yen)
                                                                              225.0%   250%
 2,500
                                      YoY Change                     180.5%            200%
                                                                              2,291
 2,000
            138.9%                                                   1,820             150%
                                                   127.0%   117.0%
 1,500
                      90.8%
                              76.7%                         1,192                      100%
 1,000
                                        65.8%
                                                   966
                     GMS
   500                        649        705                                           50%
                      549
            425
     0                                                                                 0%
           02/4Q     03/1Q    03/2Q     03/3Q      03/4Q    04/1Q    04/2Q    04/3Q
                                                                                             28
             Rakuten Group Reach
 Group’s reach increases by 1.5x in the last 3 years



Property Dec 2001               Property Sept 2004
  Yahoo!   73.1                   Yahoo!    84.3
   Nifty     47.0                Rakuten              61.5
   MSN       44.4                  MSN                55.4
 Rakuten     41.4                  Nifty              49.5
   NEC       37.4                  GMO                45.8



                                      Source: NetRatings Home Panel   29
                              Rakuten Ichiba Top Page PVs
              Press & media coverage help drive page views
     (‘000PV)
1,600

1,500

1,400

1,300

1,200

1,100

1,000
                                                                                                                            Awarded
 900                                                                                                                        Franchise
                                             Post-media announcement
 800

 700
        27    30    2     5   8   11   14   17   20   23   26   29   2     5   8   11   14   17   20   23   26   29   1     4   7


        Aug        Sept                                              Oct                                                  Nov           30
                   Target Demographic Groups

Rakuten Members (Gender, Age)
            Age
                                            Rakuten Card Target Groups
 Male      60-64     Female

           55-59

           50-54

           45-49
                                                   Card Loan Target Groups
           40-44

           35-39

           30-34

           25-29

           20-24
                                Sub Prime           Middle         Prime
           16-20

                                            \4M              \7M   Annual Income
                                                                               31
32

				
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