The Battle for Japan: The future of Rakuten & Amazon JP

Rakuten is making a push towards making greater inroads in North America, attempting to challenge Amazon’s ubiquity in the e-commerce market, much like the latter has done to the Japanese incumbent in its home country this past decade.

But how are those efforts going and what will the Japanese e-commerce landscape (Amazon vs Rakuten) look like in the next few years?

In 2018, Japan’s External Trade Organization (JETRO) assessed that Amazon and Rakuten owned nearly the exact same percentage of the e-commerce market in Japan (20.2% and 20.1% respectively). While those numbers are a rounding-error away from being identical, it’s notable that Amazon has grown to basically tie for first place as the biggest player in the Japanese market, despite Rakuten’s 13-or-so year head start.

So then how does this Amazon vs Rakuten battle play out over the next half-decade?

A previous WPIC article depicts the two companies’ primary differences. In particular, Rakuten’s approach is to have brands sell on its platform, which looks more like a partnership. As a result, business owners looking to leverage Rakuten are able to manage aspects of the e-commerce ecosystem like inventory, logistics and customer service. Conversely, Amazon manages all of these aspects on behalf of a brand inside the market. In short, Rakuten affords a level of control and personalization to its brands that Amazon does not.