Digital Marketing Agency - Silver Mouse

4 thoughts on Rakuten's exit from Southeast Asia

Last Friday wasn't a great day for me personally, to deliver the news on Rakuten's exit from Southeast Asia even after I have left the company for close to 2 years now.

Last Friday wasn't a great day for me personally, to deliver the news on Rakuten's exit from Southeast Asia even after I have left the company for close to 2 years now.

For the record, I was one of the founding members of Rakuten Malaysia since its establishment in year 2012. Even with just 2 years there, a single "thank you" isn't enough to conclude how grateful am I to the company which helps to shape my career and business intuitions.

This article is written based on both my previous (internal) and current (external) views on the company, nothing confidential and personal towards the company and ex-colleagues who I have worked with.

I just hope that my modest perspective here will be helpful for decision makers, business owners, entrepreneurs or anyone who is involved in e-commerce out there.

#1. It is not about replicating business everywhere

One size fits all?

Unlike some e-marketplaces out there, Rakuten's B2B2C business model is genuine and fair to merchants. Put aside the much debated fees, Rakuten's DNA is all about helping merchants to grow their online business, without doing anything conflicting at their back.

However, not every countries are ready for B2B2C platform like Rakuten's success in Japan. Again Southeast Asia is not just one country, "one size fits all" might not work especially true when we are always seen as "5 or 10 years behind".

Internet ecosystem and market maturity varies from country to country so it makes sense to execute differently in each country. May be B2C works better, or C2C, or classified sites, or even something else might work better in certain markets.

On another hand, Lazada started with flat B2C here (then tried with many other models) in this region, arguably this is the region with the best potential compared to the other parts of the world.

Read also: Lazada Marketplace: More like Amazon, or Rakuten?

#2. Internet business shouldn't be too conservative

Too much information to make decision?

Many would have suggested that Rakuten is not as aggressive as its competitors in local markets here. I neither disagree on this, nor agree completely with spending ruthlessly to "scale, hit top-line, raise fund, and exit one day".

My point here is more on how long it took Rakuten to setup here in this region. Japanese corporate are generally known for being cautious, spending too much time on market research and validity prior to business setup.

Internet business needs to be executed with speed, 1 year behind could means 5 years behind in traditional business. If Rakuten had started 1 or 2 years earlier here, which was possible with their rich history, resources and experience in Japan, it can be a different story altogether with that kind of headstart ahead of its competitors.

Of course, business is all about risk taking and once it is decided, full resources has to be committed for at least a certain period to stand any chance of success.

#3. New business shouldn't be run like a corporate

Corporate vs start-up

I personally think that this is one of the major stumbling blocks for big corporate like Rakuten venturing into new markets or new businesses. There are just too many red tapes, meetings and reporting which shouldn't happen in new business ventures.

Don't get me wrong, corporate style or management is necessary when the setup is bigger and matured. Start-ups should maximize resources to execute, not polishing reports (and tell good stories only) for management and shareholders.

I have also seen a couple of bright, start-up minded talents in this region left Rakuten and started their own ventures. Some of them are fairly successful now.

Just a thought, instead of just relying on venture capital arm to smell for the next big start-ups, corporate like Rakuten has the power to attract then keep and support bright talents with some sort of entrepreneurship programs.

#4. eCommerce (platform) is not the new gold rush

Blind followers?

After ditching the B2B2C model in Southeast Asia, I am quite surprised with Rakuten's intention to enter the increasingly competitive C2C mobile app business. Unless if there is something to do with Carousell (Rakuten is one of the investors), this seems similar to its previous persistence with "one model to rule them all".

As mentioned in point #1 above, marketplace, platform or even e-commerce is not the only game to play. E-commerce is neither the new gold rush, nor the only cool thing you must do next by blindly following others.

Having said that, I am particularly impressed with Rakuten's business ecosystem of e-commerce, travel, portal, to even finance back in Japan. The company's strategic acquisitions of non e-commerce businesses out of Japan could be promising too.

Not everyone is as big as Rakuten though with its ecosystem and acquisitions, smaller businesses can excel by doing something different with real speed, without the baggage of a public listed company and big corporate syndrome.

Read also: 10 things you should know before starting your eCommerce venture in Southeast Asia



ecInsider: 4 thoughts on Rakuten's exit from Southeast Asia
4 thoughts on Rakuten's exit from Southeast Asia
Last Friday wasn't a great day for me personally, to deliver the news on Rakuten's exit from Southeast Asia even after I have left the company for close to 2 years now.
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