Tsutaya .vs. Rakuten
M-Commerce: Leveraging Retail Sales through the Mobile Platform
May Su Aung – [email protected] Copeland – [email protected]
TSUTAYA: ProfileTSUTAYA: 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
Corporate Headquarters
Tokyo
Established 1983 (TOL - 1999)
Employees/TOL* 100
Subscribers/TOL* 18.55 million
Wireless technology
i-ModeMovie Mail, TOL (mobile)LinkShare
Parent company Culture Convenience Club Ltd(CCC includes Tsutaya and TOL)
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: 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 – ProfileRAKUTEN – ProfileCorporate 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-ichiba-presentation
Rakuten – Mobile Storefront
Rakuten – Financial Highlights
• Travel Bookings via Mobile Phone
Mobile Auction Market Share
NetPrice64%
Yahoo! Japan17%
Rakuten18%
Other1%
Online Auction Market Share
Yahoo! Japan81%
Rakuten16%
NetPrice0.1%
Other2.9%
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