Rakuten is one of a growing number of Japanese brands aiming to become as recognisable internationally as they are at home. But it now risks becoming known for the wrong reasons. The Environmental Investigation Agency (EIA) recently exposed thousands of ads for ivory, whale and dolphin meat on its site.
To its credit, the firm has since stopped the sales of whale and dolphin meat following an International Court of Justice order preventing Japan from whaling. But it continues to sell ivory.
Things have looked much better. Rakuten is a dominant e-commerce brand at home, and has a more progressive approach than many Japanese firms. But the company’s support of contentious industries indicates it may be out of touch with international sentiment, and it is not clear whether it is ready to become a truly global platform.
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DIAGNOSIS 1
From a communications perspective, Rakuten has shown little proactivity in addressing the protests, which is a missed opportunity and potentially a ticking brand time bomb. My advice for Rakuten is to drop the offending items completely, and create and announce clear and progressive legal and ethical policies about what is for sale on its sites. Setting aside societal concerns, even if sales of these items are lucrative today, they amount to a small fraction of the site’s overall US$4 billion turnover. Rakuten has invested in international business expansion by acquiring properties such as Buy.com, Viber, and a stake in Pinterest. If international influencers target Rakuten, its expansion risks being blocked. The reputational risk, and management time and attention required to navigate through this thicket is not worth the effort and the distraction. |
DIAGNOSIS 2
When a company owns the local market, as Rakuten does in Japan, it can breed a false sense of security. I’m not sure whether Rakuten appreciates what an emotionally charged issue this is outside of Japan. The initial Guardian story alone triggered nearly 1,800 social shares. Now, with the recent ruling by the International Court of Justice forcing Rakuten’s hand, the company has finally put a stop to the selling of whale meat. It is revealing to look at Rakuten’s official statement: “In accordance with the ruling... Rakuten today asked merchants to cancel sales of whale meat products on [its] marketplace. [It] has also requested these merchants to remove all related items from their online shops within the next 30 days.” It chose ‘clinical’ over ‘empathy’. Again, it’s tough for a brand to connect with consumer values across the world. Still, Rakuten will need to shift from clinical to empathetic communications to succeed in this branding marathon. |
Rakuten is discovering that when you decide to go global, the rules change. Even if the sale of whale meat and some pre-1947 ivory is legal in Japan, offering the contentious products has unleashed a vocal group of activists worldwide. No company or nationality likes to be told what to do, but standing its ground based on Japanese laws and cultural standards could cause Rakuten to be perceived as an unethical brand and hamper its global ambitions.
Expanding a brand from the home field to global markets is not a journey for the squeamish. Whether this single episode has damaged the Rakuten brand misses the point. Nourishing a global brand is a marathon, not a sprint. Does the company have the necessary mentality, infrastructure and communications expertise?
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