Rakuten Belanja Online

» see rakuten.co.id as it lived, on the wayback machine

~ the last words ~

Rakuten Belanja Online sits in the part of internet history I can describe accurately and cannot remember at all. Indonesian e-commerce between 2011 and 2016 was a genuinely enormous fight with more capital in it than most of what I was using at the time, and none of it produced a single thing that reached me in Ankara. That is the normal condition. Most of the internet is local, and the handful of services that go global are the exception people keep mistaking for the rule.

Rakuten has been the largest e-commerce company in Japan for a long time and its model is not Amazon's. It runs a marketplace where merchants build and operate their own storefronts, with the platform collecting fees instead of holding inventory in a warehouse. This works extremely well at home, where the pages are dense and loud by design and shoppers expect some kind of relationship with the person selling to them.

In 2011 it entered Indonesia through a joint venture with PT Global Mediacom, part of the MNC Group, one of the largest media conglomerates in the country. On paper the reasoning was sound. Indonesia had the population and the smartphone growth curve, and the local partner owned television stations, which meant the new marketplace could be advertised into the country cheaply from day one.

~ the record ~

~ how it landed ~

It did not work. The Indonesian market in those years was being contested by Lazada with Rocket Internet's money behind it and by Tokopedia with SoftBank's, both of them entirely prepared to lose money for a decade in order to buy the position. Rakuten was not. It is a profitable Japanese public company whose shareholders expect a real answer about when a foreign subsidiary turns a profit, and the answer coming back from Jakarta was not one anybody wanted to read out.

The merchant-storefront model fit badly too. It assumes sellers who will put effort into maintaining a shop on your platform and buyers comfortable completing an online payment. Indonesia in 2013 ran heavily on cash on delivery, and an enormous share of trade was happening through instant messaging and classified listings rather than through anything that resembled a checkout page.

~ what got buried with it ~

Rakuten announced the withdrawal in february 2016 and closed the site on 1 march. Customers were told to spend their accumulated points by 29 february, which is the small administrative detail that makes a shutdown feel real. A currency the company invented for itself, given an expiry date on the way out the door.

The retreat was regional rather than Indonesian, and Rakuten shut its Southeast Asian marketplaces together before refocusing on Japan and on assets it had bought elsewhere. The market it walked away from went on to be worth vastly more than it was in 2016. It went to the companies that were willing to sit through a decade of losses, which is the one thing a disciplined profitable company is structurally unable to do.

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