News On Japan

Lessons for Masayoshi Son in Rakuten's failure to halt Amazon

Sep 14, 2021 (Nikkei) - Internet platform businesses like Google and Amazon, you would think, necessarily compete in a global market that spans national boundaries.

A look at geographic market segments by revenue of some of the leading internet platforms confirms the hunch: 54% of Google's revenue comes from outside North America; 30% for Amazon, 60% for eBay; and 54% for Netflix.

The logical corollary would seem to be that internet businesses that serve a single geographic market only -- say, a Japan-only e-commerce site -- are doomed to be swallowed up by their larger global rivals.

How Japan's leading domestic internet platforms, Rakuten and SoftBank Group company Z Holdings, formerly Yahoo Japan, are faring against Google and Amazon offers evidence to test this hypothesis.

Spoiler alert: Cultural barriers and network effects from a legacy position in the local market can delay, but not prevent ultimate defeat. Rakuten, Japan's online shopping mall, provides the starkest data.

In 2015, Rakuten and Amazon Japan had a roughly equal market share. By 2020 Amazon Japan commanded twice the market share of Rakuten, 25.7% to 12.6%. During that period, Amazon's scale enabled it to integrate vertically when it comes to logistics and distribution, with delivery trucks adorned with the signature smile-shaped A to Z arrow now a common sight in Japan.

Rakuten started with the advantage of a native Japanese language interface and a critical mass of loyal Japanese sellers and customers. But Amazon overcame Rakuten's initial local advantage by leveraging its global scale and assets.

Accumulated experience in markets around the world helped the Seattle-headquartered company localize its user interface to suit Japanese tastes and sensibilities.

Further, Amazon's global network offered Japanese users the ability to compare products and prices from all over the world, not just within Japan. On top of this, Amazon began to offer new categories like Amazon Prime Video, Alexa and Kindle that vault over Rakuten's menu of conventional physical products.

News On Japan
POPULAR NEWS

Toyota Motor will begin operating fully autonomous taxis in 2027 through a partnership with U.S. self-driving technology company Waymo, marking a major step in the Japanese automaker's efforts to expand driverless transportation services.

Mount Fuji has received its first snowcap of the season, the Japan Meteorological Agency announced on October 30, after temperatures at the summit plunged to minus 9.4 degrees Celsius, marking the arrival of winter conditions on Japan's highest mountain.

U.S. intelligence agencies suspect that a Chinese female intelligence operative developed a close relationship with Nvidia CEO Jensen Huang in an attempt to obtain confidential corporate and U.S. government information, according to a report published by The New York Times on October 29th.

The Japanese government has asked major telecommunications operators to forcibly block access to websites believed to contain personal information stolen in a cyberattack on GMO, it emerged on October 29th, as authorities moved to prevent further exposure of sensitive data online.

Typhoon No. 31 was located near Minamitorishima Island in the Pacific Ocean, as of 3 a.m. on October 30, and was expected to approach the Ogasawara Islands south of Tokyo over the October 31-November 1 weekend while maintaining very strong intensity, bringing a growing risk of dangerously high waves, powerful swells and extremely rough seas.

MEDIA CHANNELS
         

MORE Society NEWS

Japan's rapidly aging population is facing a growing crisis of elderly people dying alone at home, with grieving families sometimes unable to see their loved ones before burial and landlords increasingly forced to shoulder substantial cleanup and estate clearance costs when relatives abandon their inheritance.

Traditional Japanese crafts are finding an unexpected source of skilled workers in prisons across the country, where inmates are learning painstaking production techniques that build patience and concentration while helping preserve industries struggling with a shortage of craftspeople.

A Japanese woman in her 20s was found dead at an apartment complex in Cheonan, central South Korea, on October 29th, prompting police to detain a South Korean man in his 30s on suspicion of murder after he allegedly confessed to killing her because he had decided to commit suicide following stock market losses but could not bring himself to die alone.

Emperor Naruhito and Empress Masako hosted the annual autumn garden party at the Akasaka Imperial Gardens in Tokyo on October 29, welcoming approximately 1,400 guests, including actor Kotaro Yoshida and novelist Miyuki Miyabe, while female members of the Imperial Family attended in traditional Japanese attire.

A 59-year-old water sports rental shop owner in Omachi, Nagano Prefecture, has received a letter of appreciation from police after rescuing a paraglider who plunged into a lake on September 21, pulling the unconscious man from the water and performing CPR after discovering he was no longer breathing.

A married couple in Aira, Kagoshima Prefecture, have been arrested after police discovered cannabis plants growing in pots on the terrace of their home during a search connected to a separate investigation, authorities said on October 28th.

A woman in her 80s was killed after her car entered railway tracks on the Odakyu Enoshima Line in Fujisawa, Kanagawa Prefecture, shortly before 10:30 p.m. on October 27, with security camera footage showing the vehicle traveling along the tracks, passing an oncoming train and stopping with its hazard lights flashing before being struck from behind by another train.

A teenage male was rushed to a hospital after suffering an electric shock while putting away a motorized basketball hoop at a gymnasium in Kitakyushu, Fukuoka Prefecture, in an accident believed to have been caused by an incompatible extension cord, according to a report on October 27th.