Tsutaya .vs. Rakuten
M-Commerce: Leveraging Retail Sales
through the Mobile Platform
May Su Aung – msaung@iuj.ac.jp
Bryan Copeland – bcpld@iuj.ac.jp
TSUTAYA: Profile
Corporate
Headquarters
Tokyo
Established
1983
Employees/TOL*
100
Subscribers/TOL*
18.55 million
Wireless
technology
i-Mode
Movie Mail, TOL (mobile)
LinkShare
Parent company
Culture Convenience Club Ltd
(CCC includes Tsutaya and TOL)
Net Sales: 3,043 million ¥
Ordinary Income: 579 million ¥
Net Income: 436 million ¥
* TOL – Tsutaya Online
** Estimated, year ended March-to-March, 2006 fiscal year; based on $1 = ¥132.06
(TOL - 1999)
Approach to Mobility
How does Tsutaya do it?
• In 1994, CCC built a sizeable customer database
• Maintain a dynamic, always-on picture of individual
entertainment tastes and preferences and personalize
product offerings by combining data with mobility via iMode service.
How does it all work for the consumer?
• TOL*, Tsutaya’s wireless i-Mode site, email consumer whenever the
next release of the brand which consumer bought last time is
available (or notify about clearance sales)
*Case Study -- Tsutaya, a Tokyo Video Store, Goes Mobile:
http://www.cioinsight.com/c/a/Past-News/Case-Study-Tsutaya-a-Tokyo-Video-Store-Goes-Mobile/
Business Strategy
Store Development Strategy Bringing
the 3000-Store Vision to Reality
– The market radius for its retail locations: a 10 minute
customer destination
– They envision the potential to develop and open 3,000
stores in Japan by assuming that one TSUTAYA location
exists for every 40,000 citizens.
Enhanced IT to Support
Store Operations
• The CCC has developed a number of information
technologies (IT)
– To support operations, including the (AMS)
– To analyze daily and hourly product movement at each store
– To execute rental product orders at franchise headquarters
on behalf of franchisees.
• The CCC connected all stores to franchise headquarters with
a knowledge-sharing system called TSUTAYA NAVI, an IT
platform for creating & sharing insights to support the
resolution of store operating concerns.
Clicks & Mortar (C & M)
• To generate synergies between physical TSUTAYA in-store services
and the Internet entertainment portal (TOL).
• Provide a Marketing function: TSUTAYA online, retail customers and
TSUTAYA stores are directly connected via Internet.
• This connection, both pinpointed and immediate, provides a
marketing function that other companies do not possess.
Monthly Sales & Membership
Member Growth
(Customer Acquisition Strategy)
• 60% of 19-year-olds in Japan are "active Tsutaya members”
Market Share (FY2005)
Share % in parentheses: Unit billion yen
RAKUTEN – Profile
Corporate
Headquarters
Roppongi Hills, Tokyo
Year founded
1997 (RA - 2003)
Employees/RA
200
Subscribers/RA
17.3 Million*
Wireless
technology
i-Mode (DoCoMo partnership)
EZWeb, Yahoo!
Rakuten Auctions, Portal shops
Parent company
Independent
Net Sales: 33,636 million ¥**
Ordinary Income: 6,937 million ¥**
Net Income: 3,731 million ¥**
* ALL Raktuen Divisions
** ALL Rakuten Divisions; Estimated, year ended March-to-March, 2006 fiscal year; based on $1 = ¥132.06
Rakuten – Mobile Strategy
• Eyeing mobile auction market
• Partnership with NTT DoCoMo on Rakuoku
• Spin-off of Rakuten Auctions on the Mobile
• DoCoMo has a 40% stake (4.2 billion 円)
Case Analysis – Rakuten Ichiba: http://www.slideshare.net/icestorm/case-analysis-rakuten
Rakuten – Mobile Storefront
Rakuten – Financial Highlights
Online Auction Market Share
• Travel Bookings via Mobile Phone
Rakuten
16%
Other NetPrice
2.9%
0.1%
Yahoo! Japan
81%
Mobile Auction Market Share
Rakuten
18%
Yahoo! Japan
17%
Other
1%
NetPrice
64%
Rakuten – Business Model
Rakuten – Operating Margin
Rakuten – Mobile Future
• Pushing Rakuten Auctions on the Mobile
• Tie-up talks with Tokyo Broadcasting Systems,
Inc. (TBS); Internet TV negotiations
• M-commerce, focused on:
–
–
–
–
–
Recommendation technology
Captivating Contents
Product-placements
Ad Relevancy
Increased Auction traffic/sales