Mobile Business Strategy: Tsutaya .vs. Rakuten
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Mobile Business Strategy: Tsutaya .vs. Rakuten



Mobile Business Strategy final presentation on Rakuten .vs. Tsutaya, two of Japan's retail giants and their mobile strategies.

Mobile Business Strategy final presentation on Rakuten .vs. Tsutaya, two of Japan's retail giants and their mobile strategies.



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  • The wireless Internet has failed to catch on in every part of the world except Japan. WAP: It was supposed to put mobile phone users on the Internet in the U.S. and Europe. However has had a slew of problems, including slow access and even slower adoption. i-Mode service: introduced in Feb. 1999 by Japan’s mobile telecom giant NTT DoCoMo Inc.- and now being used by Tsutaya- has attracted more than 30 million subscribers, or about one-fourth of Japan’s population. Japan has one of the highest mobile phone usage rates in the world--- one mobile for every 2 people----- and the most advanced mobile telecommunications infrastructure. It may take a while for the US
  • AMS: Area marketing System (AMS)
  • They analyze the data and TSUTAYA member

Mobile Business Strategy: Tsutaya .vs. Rakuten Mobile Business Strategy: Tsutaya .vs. Rakuten Presentation Transcript

  • Tsutaya .vs. Rakuten M-Commerce: Leveraging Retail Sales through the Mobile Platform May Su Aung – [email_address] Bryan Copeland – [email_address]
  • TSUTAYA: Profile
    • 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
    i-Mode Movie Mail, TOL (mobile) LinkShare Wireless technology Culture Convenience Club Ltd (CCC includes Tsutaya and TOL) Parent company 18.55 million Subscribers/TOL * 100 Employees/TOL *
    • (TOL - 1999)
    Established Tokyo Corporate Headquarters
  • 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 i-Mode 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:
  • 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 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 Independent Parent company i-Mode (DoCoMo partnership) EZWeb, Yahoo! Rakuten Auctions, Portal shops Wireless technology 17.3 Million * Subscribers/RA 200 Employees/RA 1997 (RA - 2003) Year founded Roppongi Hills, Tokyo Corporate Headquarters
  • 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:
  • Rakuten – Mobile Storefront
  • Rakuten – Financial Highlights
    • Travel Bookings via Mobile Phone
  • 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