Rakuten Ventures Beyond E-Commerce into Agriculture

In News

As the owner of the largest e-commerce site in Japan, Rakuten provides many online services including online retail, hotel booking, and banking and payment services. Founded in 1997, Rakuten has expanded its services outside of Japan through various acquisitions and joint ventures. The company now has more than 10,000 employees worldwide.

In recent years, Rakuten has seen shifts in its practices such as retrenching some of its employees. The company has also closed its operations in UK, Spain, and many other countries in Europe. Southeast Asia marketplaces are now closed with approximately 150 staff members laid off.

A new shift

Despite these restructuring processes, Rakuten has recently made an unlikely business move by investing in Telefarm. The seven-year-old company is a provider of remote farming services to promote organic farmers in Japan. While Rakuten previously ventured into related industries such as finance and mobile services, investing in Telefarm is a brand new move altogether.

New farmers in Japan are facing obstacles such as finding the right investment or facing unstable revenues. The challenges that established farmers face are securing a stable sales channel and the shortage of successors. The industry is currently in a declining state and farmers are facing many challenges. Factors that contribute to the declination includes Japan’s aging population, shortages in labour, and the amount of arable land.

Potential in agriculture

Rakuten is set to explore and develop new services for the agriculture industry, particularly relating to organic farming and organic products. Part of the functions of Telefarm is to connect consumers with farmers through the internet. Consumers can remotely cultivate organic vegetables, providing a stable revenue and sales channels. Rakuten’s venture into this industry would help in providing more reliable and sustainable services based on their expertise in online shopping.

Restructuring a business may be a hindrance to growth, but for some it can lead to opportunities that expand beyond the initial brand idea.

 

Image credit: Payment Week

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