February 29, 2012, 2:22 PM

Rakuten sees mobile commerce as a key to growth

The e-retailer foresees a nine-fold increase in online traffic.

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The e-retailer's mobile chief expects online traffic to increase by nine times in coming years, in part because of mobile commerce.

Japanese e-retailer Rakuten Inc. says the increasing adoption of smartphones and tablets is a better prognosticator of future online sales than any crystal ball. Over the next few years, the retailer, which operates the major Rakuten web marketplace in Japan and owns Buy.com, No. 19 in the Internet Retailer Mobile Commerce Top 300 and No. 32 in the Top 500 Guide, predicts its online traffic will increase nine times, in part because of mobile commerce. That would be a substantial amount: Rakuten, which also owns significant online marketplaces in Europe and Asia outside of Japan, had global net sales of $4.6 billion last year. It had 11.7 million unique buyers on its Rakuten Ichiba e-commerce site in the fourth quarter.

“We believe the mobile device phenomenon will be the biggest single driver,” Kenichiro Nakajima, Rakuten chief mobile officer, tells Internet Retailer. He declined to provide a specific timeframe for the projected growth, only that it would take years, not months.

Rakuten sees evidence of this trend in its online shopping data. “When PC users start using feature phones for online shopping, their transactions will typically increase by 1.5 times, with a further 1.5 times increase when they migrate to full smartphones,” Nakajima says. And consumer use of apps leads to another 1.5 times increase, he notes. “Given the convenience and quality browsing experience delivered by tablets we would expect to see a similar level of growth driven by tablet devices.” In the U.S., Forrester Research Inc. forecasts that by 2015, 82.1 million adults will own a tablet, up from 26 million in 2011.

Mobile commerce, however, is one component in Rakuten’s forecasted growth. Though Rakuten does not operate any physical stores, they and e-commerce will remain important, Nakajima says.

“Today’s shopper is complex,” he says. “They engage with brands in a variety of different ways when coming to a decision about what to buy and where to buy it. The offline and online worlds complement each other. We see this as consumers are turning to an ever wider variety of social and commercial information sources before making a purchase–a customer may choose to browse online but make a purchase in-store for example. The brick-and-mortar experience is something many consumers still value.”
The key for retailers is to combine the flexibility and convenience that online, mobile and social channels deliver, with the customer service, humanity and tangibility of the physical shopping experience, Nakajima says.

“By bringing together these elements, retailers will make their offerings and service more compelling to their customers,” he says.

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