Rakuten's Olivier Mathiot: "The group is testing a luxury goods marketplace"
today Mar 31, 2018
French online buying and selling platform PriceMinister announced a few weeks ago that it will discard its current name to adopt that of its owner, Japanese giant Rakuten. At E-commerce One-to-One, the forum of e-commerce operators held in Monte Carlo on 20th-22nd March, the CEO of Rakuten France, Olivier Mathiot, spoke to FashionNetwork.com about the new name's implications and the role that fashion and luxury play in the Japanese group's strategy.
FashionNetwork: What does discarding the name PriceMinister in favour of Rakuten imply?
Olivier Mathiot: It's not just a brand-name change, because Rakuten has much broader scope than PriceMinister. We were a marketplace which brought together private individuals and professionals. It meant the economic model was quite complex, but it allowed us to offer a wider range of products. Rakuten, on the other hand, also means Rakuten TV, the Rakuten Kobo e-reader, the Rakuten Viber messaging app, the Rakuten European Bank (REB), etc. It's a whole galaxy of activities, with six business units already operating in France, and this is the rationale for this migration. We haven't announced it yet because it's still being tested technically, but we will soon launch the Rakuten ID. It's an ID which earns points whenever customers make a purchase. For example, if you buy sneakers on Rakuten, you can then spend the points you earned on video-on-demand services with Rakuten TV, or with any other of the group's services.
FNW: Does this also mean there will be more links between the deals available in Europe and in Asia?
OM: In Japan, Rakuten does business as travel operator, as insurance, tech finance and telephony provider, as wedding planner, etc. The point for [European] merchants will be to reach out towards these products in Japan, while Japanese merchants will be able to sell in Europe. It's one of the objectives, though it's often made harder by cross-border and overseas logistics problems. We don't always have the right solution. But we are increasingly working with vendors in Asia, provided they can organise themselves. One of the projects I'm about to launch is product grouping for consolidated shipments from France to Japan and vice versa. There aren't many of them yet. Volumes aren't significant, they take a long time and are relatively expensive. This is why it's becoming a priority.
FNW: Is there a connection between this priority and the European offensive of Chinese giants like Alibaba, Tencent and Kaola?
OM: There is a connection. For us it is also important to have quality Chinese buyers. Because there's always this idea that [Chinese] products are low-quality, even though big names manufacture there. We have many Chinese vendors, and our Merchant Quality Score makes sure we only have quality ones. In other words, vendors that reply to clients, deliver quickly, are accurate with the packaging and give money back if there are problems. We use an extremely precise algorithm, based on twenty or so criteria, which is actually applied to all of our vendors, from Asia, Europe and elsewhere. Our idea is to curate. We will not accept just any random merchant.
FNW: What role does fashion play in your system?
OM: Fashion is one of our growth vectors. It accounts for 15% of our business. We actually think we aren't very good with fashion yet. Hence, we are keen to demonstrate to [fashion] labels that we haven't simply pinned the Rakuten name on us, but that we really want to make a breakthrough with fashion. Rakuten gives us a more institutional image. We are immediately up against the other major e-tailers. This is important, because many labels don't want to go down the marketplace route. We wish to provide a quality showcase for them, so that they will feel comfortable introducing their brand world and identity within Rakuten. Like in a retail corner at a department store. But in general, we don't have a luxury orientation, so we will more likely turn towards mainstream products. If we wanted to launch into luxury, it would probably have to be with a different brand name and website.
FNW: Like JD.com and Alibaba have done recently?
OM: Yes, absolutely. [Luxury] is an industry in which, above all, brands don't want to attract customers through price. While we on the other hand developed in a world where price is vital. We could easily [feature] labels like Lacoste or Tommy Hilfiger, but we won't be able to go as far as Gucci or Prada. Rakuten is testing a luxury goods marketplace. The test is being carried out in Asia alone, and doubtlessly it would extend to America in the first place, before coming to Europe.
FNW: Is there room for another luxury e-tailer in Europe?
OM: It's something we are looking closely at, we're asking ourselves the question. It's an interesting question to ask, notably because Europe remains the heart of fashion. And Rakuten is well aware of that. Let’s bear in mind that the group reached out to a mass-market audience by sponsoring the FC Barcelona football club. But at the same time, we want to reconcile this with a more upmarket approach. And since football players are fashion influencers, this has also been written into our agreement with FC Barcelona, to allow us to tap young fashion consumers.
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