Forbes’ Top Companies for Innovation 2016 & Rakuten

Rakuten Creates $100m Fintech Fund

I recently read an article posted by Hiroshi Mikitani (CEO of Rakuten) on his LinkedIn page regarding Rakuten being voted one of the top companies for innovation in 2016 by Forbes. The fact that the top 10 is dominated by American firms made me a bit sceptical of how accurate this list may be (a quick bit of googling shows that I am not alone in thinking this) but I was also surprised to see Rakuten on the list at number 17.

This is not to say that Rakuten is not innovative at all. As a company that is centered around e-commerce, it is exactly the type of firm I would expect to be flourishing in 2016. Hiroshi Mikitani is known as one of the great disruptors of the Japanese corporate scene, having co-founded Rakuten back in 1997 and overseen it grow into the giant that it is today. The article cites the steps that Rakuten has taken which are recognised as innovative, such as the integration of financial technology with e-commerce, and introduction of a loyalty points system. These first two points are two things that we do take for granted now, but Rakuten was certainly ahead of the curve, having introduced these initiatives back in 2001. The final point mentioned, which was a controversial change at the time was the ‘Englishnization’, or the transition to using English as the company’s sole language despite the company being mostly based in Japan. I do agree with his view that English has become a requirement in today’s world, and makes sense given that Rakuten is looking to become a much bigger player on the global stage. I also think that for the type of company that Rakuten is, this initiative makes sense – the company needs to remain as flexible as possible to respond to changes in an increasingly volatile global market.

However, putting these thoughts aside, this initiative was implemented back in 2010 and so is not recent. The most recent innovative development cited in the article is the opening of a lab in Belfast this year which is to facilitate the exploration of the how fintech and e-commerce can synergise more effectively. The main focus of this lab is Blockchain, which is the technology behind Bitcoin. The aforementioned could well be an exciting and lucrative prospect, but is this alone enough for Rakuten to be ranked 17th this year? The inclusion of Rakuten inside the top 20 is even more surprising to me, given that firms such as Baidu and Tencent were ranked 29th and 48th respectively.

P.S As I was writing this article, the news was breaking that Rakuten is now the new sponsor of Barcelona FC. This is of course great news for raising awareness of the company globally. Whilst Rakuten has made great efforts to boost its international presence in the last few years, it is hard to say whether this has turned into greater market share. I hope that this can be leveraged appropriately to maximise the benefit for Rakuten going forward.