Uber, Rakuten tie-up highlights Japan's evolving mobility marketーNHK WORLD-JAPAN NEWS

Key Concepts

• Cross-industry alliances: Partnerships between companies from different sectors to expand business ecosystems.
• Rakuten Points: A loyalty program in Japan where consumers earn and spend points on various purchases, influencing shopping behavior.
• Rakuten Ecosystem: A broad network of over 70 services offered by Rakuten, including e-commerce, banking, and travel, serving over 100 million customers.
• Mobility Platform: Services related to transportation, such as ride-hailing and delivery.
• Uber Japan: Uber's operations in Japan, which differ from other markets due to regulatory restrictions on private driver dispatch.
• Ride-sharing regulations: Strict rules governing ride-hailing services in Japan, impacting business expansion.
• Food delivery: Uber's significant business in Japan, which has expanded to include deliveries from supermarkets, convenience stores, and drugstores.
• "One Platform" Strategy: Uber's approach to serving consumers across all touchpoints with integrated delivery and mobility services.

Uber and Rakuten Partnership: Expanding Ecosystems and Enhancing Consumer Value

Main Topics and Key Points

The YouTube video transcript details a significant partnership between US ride-hailing firm Uber and Japan's e-commerce giant Rakuten. This collaboration is framed as a strategic move to expand business ecosystems beyond traditional territories and create new value for consumers.

• Nature of the Partnership: The alliance is described as the "latest move in cross-industry alliances," aiming to build a "stronger alliance ecosystem." Heads of Uber Technologies and Rakuten Group announced the partnership, emphasizing it as a foundational step for a more robust future collaboration.
• Loyalty Program Integration: A core component of the partnership is the integration of Rakuten Points. Users of Uber's taxi and delivery services will now earn Rakuten Points. This initiative is intended to attract new customers and strengthen the business ecosystems of both companies.
• Data Utilization: Both companies plan to leverage the data gathered from this partnership to improve their respective services.
• Significance of Points in Japan: The transcript highlights the centrality of points in Japanese consumer culture. Consumers can earn, save, and spend points on a wide array of goods and services, from everyday items to high-end appliances, often receiving discounts on future purchases within the same loyalty system. Businesses utilize these points as a mechanism to influence consumer shopping destinations.
• Rakuten's Extensive Ecosystem: Rakuten's ecosystem is vast, encompassing over 70 services ranging from e-commerce to banking and travel, and it serves more than 100 million customers. Uber's entry into this ecosystem is seen as an honor, acknowledging Rakuten's integral role in the daily lives of Japanese people and businesses.
• Benefits for Users: The partnership aims to bring Rakuten and Uber users closer. Uber riders and Uber Eats customers can link their Rakuten IDs to automatically earn Rakuten Points for every trip or delivery.

Uber's Operations and Adaptations in Japan

• Uber Japan's History: Uber has been operating in Japan since 2018. However, its primary service differs from other markets; instead of dispatching private drivers, it focuses on dispatching regular taxis.
• Regulatory Challenges: Ride-hailing services face strict restrictions in Japan, which has historically made it difficult for Uber and similar companies to scale their operations.
• Government Easing of Regulations: Since the previous year, the Japanese government has relaxed rules on ride-sharing services, particularly in areas where taxi availability is limited.
• Kaga City Tie-up: As an example of adaptation, Kaga City in Ishikawa Prefecture formed a tie-up with Uber last year.
• Dominance of Food Delivery: Currently, Uber's largest business in Japan is not rides but food delivery. This sector has experienced rapid growth, extending to deliveries from supermarkets, convenience stores, and drugstores, with significant expansion during the COVID-19 pandemic.
• Strategic Adaptation: Uber is actively finding ways to adapt to the challenging Japanese market, where its core ride-hailing business is heavily regulated, and is making inroads across the country.

Uber's Business Manager's Perspective

An interview with Uber's business manager reveals further insights into the strategic goals of the Rakuten partnership:

• Ultimate Goal Beyond Points: The partnership's objective extends beyond mere point accumulation.
• Mobility Expansion: Uber is expanding its mobility services into 47 prefectures by mid-December, aiming to be ubiquitous for Japanese consumers.
• Understanding Consumer Behavior: The manager emphasizes the importance of understanding the "point culture" in Japan and how Japanese consumers shop.
• Affordability: A key consideration is making Uber's products and services more affordable through collaboration with Rakuten.
• Uniqueness of the Japanese Market: The Japanese business market is characterized by the time it takes to expand, build a business, and establish trust with customers.
• "One Platform" Strategy: Uber's strategy is to operate as a "one platform," offering both delivery (restaurants and retail) and mobility services to serve consumers at "every touch point." The goal is to grow as a unified platform.

Legal and Adaptational Landscape

• Need for Legal Changes: For customers to fully access all the services enabled by these technologies, Japan still requires some legal reforms.
• Proactive Adaptation: Despite the need for legal changes, companies are not waiting. They are actively adapting and opening up niche markets to secure a solid foothold.

Conclusion

The partnership between Uber and Rakuten signifies a strategic evolution for both companies in the Japanese market. By integrating Rakuten's robust loyalty program and extensive ecosystem with Uber's mobility and delivery services, they aim to enhance consumer value, foster loyalty, and navigate the unique regulatory and cultural landscape of Japan. Uber's adaptation, particularly its focus on food delivery and its "one platform" strategy, demonstrates a commitment to sustained growth in a market that demands flexibility and a deep understanding of local consumer behavior. The collaboration underscores the trend of cross-industry alliances as a means for companies to expand their reach and create new avenues for business.