Dispatches from the Digital Revolution

Will Rakuten score the first point against Amazon in the Japanese ereader battle?

Having been on the Rakuten beat since November of last year when the Japanese Internet retailer purchased Kobo for $315 million, I find myself constantly—and pleasantly—surprised by the company’s international expansion.

Rakuten infiltrated my life in 2009 when I was still working in Japan. Using Rakuten Travel, my coworkers and I booked two nights at a bayside hotel named “The Manhattan.” The hotel was near the conference we would be attending. Perhaps due to the off-season or a timely promotion, the price did not correlate to the luxury of the experience. I was in utter awe.

As I surveyed the evening cityscape curving around Tokyo Bay from Splendid, the Manhattan’s top-floor lounge, I thought about the tedium surrounding government work and how nice it was to have earned a few days of distance. I thought about the strangeness of being seated in front of the mahogany reception desk and offered tea, which was then served in a fine china cup. I thought about the splendid view from Splendid. I did not think about the company that had quietly facilitated my moment of indulgent contemplation.

While Rakuten is a household name in Japan, back then it barely made a blip on my foreigner’s radar, but within the past few years its international visibility has increased in leaps and bounds. Even Rakuten’s internal adjustments reflect this desire to go global. In May 2010 it introduced an English-only policy for company communications and two years later CEO Hiroshi Mikitani has declared the “Englishnization” policy to be a success—this is a progressive move for a company surrounded by businesses which are still locked in cultural and linguistic insularity.

Back home, Rakuten breaks the mold. But how strong is it really? Not only does it intend to go global, it’s also going up against Amazon, the Goliath of ecommerce, in the battle for ereader territory. The first battle will be for the home market.

According to the Asahi Shinbun, one Japan’s main newspapers, Rakuten will release its own ebook reader (a Kobo device) in late July, scoring the first point against Amazon, which did not launch its Kindle Touch in April, as was first expected. Mikitani told Asahi Shinbun:

As a Japanese company, we cannot lose to overseas rivals […] With Kobo devices, we will be able to export Japanese content. The Japanese publishing industry will become a huge content industry […] Rakuten will sell the Kobo Touch reader not only through its Rakuten Ichiba online shopping mall but also at major electronics retailers […] The Kobo Touch will be the first e-book reader in Japan to use the EPUB data format, which is becoming a global standard. follows up with details on content:

With the support of its parent-company Rakuten, Kobo will offer a robust lineup of Japanese titles, including novels, essays, business and comic books, in addition to the 2.4-million titles available in Japan. The Kobo Japanese catalogue will contain a wide assortment of titles by year end, including exclusive content only available through Kobo. Consumers can read their Kobo eBooks and graphic novels anytime, anyplace they choose with the Kobo Touch.

While I can’t jump to conclusions about how Japanese consumers will receive the Kobo Touch, I feel that the country’s publishers would be more open to working with home team Rakuten than its international rival—after all, they turned up their noses at Amazon once over pricing. Although Amazon continues to court them, with few gains, they’ll probably do it again.


This entry was posted on July 5, 2012 by in Business, News, Technology and tagged , , , , , .

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