Rakuten: To Stay or Not To Stay In The UK?
(8 pages of text)
Case (Pub Mat)
In 2016, Rakuten, the largest e-commerce company in Japan, was at the crossroads of its UK operations. After 2008, Rakuten had accelerated internationalization, mainly by acquiring local e-commerce companies. In the foreign markets, Rakuten leveraged its e-commerce platform model, with which it had achieved huge success in the Japanese e-commerce market in the 2000s. In 2011, it acquired UK-based e-commerce company, Play.com. At that time, Play.com faced challenges in the local e-commerce market because of strong competitors, especially Amazon and eBay. Rakuten tried to boost the competitive advantage by adopting its e-commerce model. However, attracting local users and merchants in the UK market proved difficult for Rakuten. Should Rakuten continue its European expansion program? What should the company do in the UK market and with Play.com in particular? Should Rakuten stay in the United Kingdom?
This case is suitable for a variety of undergraduate- and postgraduate-level courses on strategic management, international business, and digital management. After working through the case and assignment questions, students will be able to
- review global competition in e-commerce;
- understand the characteristics of an internet-based platform business model;
- explore challenges that internet-based platform businesses face in foreign market entry; and
- develop a market ecosystem in foreign markets.
Japan; United Kingdom, Large, 2016
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