Rakuten lifted domestic e-commerce sales 14% in 2014
TOKYO -- Rakuten's domestic e-commerce gross merchandise sales grew 14% to an all-time high of 2.01 trillion yen ($16.5 billion) in the year ended Dec. 31, and the Japanese Internet giant plans to boost them further with new promotions and expanded delivery services.
"E-commerce is robust," Chief Executive Officer Hiroshi Mikitani remarked confidently at an earnings briefing Thursday. "We can grow it significantly this fiscal year as well."
Operating profit advanced 18% to 106.3 billion yen in group results released that day, marking its first time above the 100 billion yen mark since Rakuten's founding in 1997.
For the October-December quarter, gross merchandise sales rose 7% on the year to 558.4 billion yen. The Rakuten Ichiba virtual mall fared well, pushing profit past the result a year earlier, when promotions celebrating the victory of the Tohoku Rakuten Golden Eagles baseball team fueled sharp sales growth. The company's Rakuten Card credit cards were used for a higher proportion of sales, also playing a role.
Despite a slump in gross merchandise sales growth around last summer in the wake of April's consumption tax hike, domestic e-commerce gross merchandise sales reached a record level for the fiscal year.
Rakuten is working to give the mainstay domestic e-commerce business a further boost. Improved smartphone compatibility is one strategy. Smartphone transactions account for 44% of gross merchandise sales on Rakuten Ichiba. With the number of smartphone users growing, Rakuten is improving its website to make smartphone purchases easier.
The company introduced in December the "Rakuten Super Deal," offering bonus reward points and limited-time sales on different products. Unlike previous promotions, it is held every day, drawing in more users. The campaign is still going strong, and Rakuten plans to make it a key part of the business to help the company take on Amazon.com, with which competition is heating up.