Tsutaya .vs. Rakuten M-Commerce: Leveraging Retail Sales through the Mobile Platform May Su Aung –  [email_address] Bryan ...
TSUTAYA: Profile <ul><li>Net Sales: 3,043 million  ¥ Ordinary Income: 579 million  ¥   Net Income: 436 million  ¥   * TOL ...
Approach to Mobility <ul><li>How does Tsutaya do it? </li></ul><ul><li>In 1994, CCC built a sizeable customer database </l...
Business Strategy <ul><li>Store Development Strategy Bringing the 3000-Store Vision to Reality </li></ul><ul><ul><li>The m...
Enhanced IT to Support  Store Operations <ul><li>The CCC has developed a number of information technologies (IT) </li></ul...
Clicks & Mortar (C & M)  <ul><li>To generate synergies between physical TSUTAYA in-store services and the Internet enterta...
Monthly Sales & Membership
Member Growth (Customer Acquisition Strategy) <ul><li>60% of 19-year-olds in Japan are &quot;active Tsutaya members” </li>...
Market Share (FY2005) <ul><li>Share % in parentheses: Unit billion yen </li></ul>
RAKUTEN – Profile Net Sales: 33,636 million  ¥** Ordinary Income: 6,937 million  ¥**   Net Income: 3,731 million  ¥**   * ...
Rakuten – Mobile Strategy <ul><li>Eyeing mobile auction market </li></ul><ul><li>Partnership with NTT DoCoMo on  Rakuoku <...
Rakuten – Mobile Storefront
Rakuten – Financial Highlights <ul><li>Travel Bookings via Mobile Phone </li></ul>
Rakuten – Business Model
Rakuten – Operating Margin
Rakuten – Mobile Future <ul><li>Pushing Rakuten Auctions on the Mobile </li></ul><ul><li>Tie-up talks with Tokyo Broadcast...
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Mobile Business Strategy: Tsutaya .vs. Rakuten

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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

    1. 1. Tsutaya .vs. Rakuten M-Commerce: Leveraging Retail Sales through the Mobile Platform May Su Aung – [email_address] Bryan Copeland – [email_address]
    2. 2. TSUTAYA: Profile <ul><li>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 </li></ul>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 * <ul><li>(TOL - 1999) </li></ul>Established Tokyo Corporate Headquarters
    3. 3. Approach to Mobility <ul><li>How does Tsutaya do it? </li></ul><ul><li>In 1994, CCC built a sizeable customer database </li></ul><ul><li>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. </li></ul><ul><li>How does it all work for the consumer? </li></ul><ul><li>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) </li></ul>*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/
    4. 4. Business Strategy <ul><li>Store Development Strategy Bringing the 3000-Store Vision to Reality </li></ul><ul><ul><li>The market radius for its retail locations: a 10 minute customer destination </li></ul></ul><ul><ul><li>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. </li></ul></ul>
    5. 5. Enhanced IT to Support Store Operations <ul><li>The CCC has developed a number of information technologies (IT) </li></ul><ul><ul><ul><ul><li>To support operations, including the (AMS) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>To analyze daily and hourly product movement at each store </li></ul></ul></ul></ul><ul><ul><ul><ul><li>To execute rental product orders at franchise headquarters on behalf of franchisees. </li></ul></ul></ul></ul><ul><li>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. </li></ul>
    6. 6. Clicks & Mortar (C & M) <ul><li>To generate synergies between physical TSUTAYA in-store services and the Internet entertainment portal (TOL). </li></ul><ul><li>Provide a Marketing function: TSUTAYA online, retail customers and TSUTAYA stores are directly connected via Internet. </li></ul><ul><li>This connection, both pinpointed and immediate, provides a marketing function that other companies do not possess. </li></ul>
    7. 7. Monthly Sales & Membership
    8. 8. Member Growth (Customer Acquisition Strategy) <ul><li>60% of 19-year-olds in Japan are &quot;active Tsutaya members” </li></ul>
    9. 9. Market Share (FY2005) <ul><li>Share % in parentheses: Unit billion yen </li></ul>
    10. 10. 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
    11. 11. Rakuten – Mobile Strategy <ul><li>Eyeing mobile auction market </li></ul><ul><li>Partnership with NTT DoCoMo on Rakuoku </li></ul><ul><li>Spin-off of Rakuten Auctions on the Mobile </li></ul><ul><li>DoCoMo has a 40% stake (4.2 billion 円 ) </li></ul>Case Analysis – Rakuten Ichiba: http://www.slideshare.net/icestorm/case-analysis-rakuten-ichiba-presentation
    12. 12. Rakuten – Mobile Storefront
    13. 13. Rakuten – Financial Highlights <ul><li>Travel Bookings via Mobile Phone </li></ul>
    14. 14. Rakuten – Business Model
    15. 15. Rakuten – Operating Margin
    16. 16. Rakuten – Mobile Future <ul><li>Pushing Rakuten Auctions on the Mobile </li></ul><ul><li>Tie-up talks with Tokyo Broadcasting Systems, Inc. (TBS); Internet TV negotiations </li></ul><ul><li>M-commerce, focused on: </li></ul><ul><ul><li>Recommendation technology </li></ul></ul><ul><ul><li>Captivating Contents </li></ul></ul><ul><ul><li>Product-placements </li></ul></ul><ul><ul><li>Ad Relevancy </li></ul></ul><ul><ul><li>Increased Auction traffic/sales </li></ul></ul>

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