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Rakuten

From Wikipedia, the free encyclopedia
This article is about the US e-commerce website. For its Japanese parent company, seeRakuten.
Rakuten /shop
Company typeSubsidiary
IndustryInternet
FoundedSeptember 12, 1997;27 years ago(1997-09-12)[1]
FounderScott Blum[2]
FateShutdown in 2020 by Rakuten
HeadquartersSan Mateo, California,U.S.
Area served
Worldwide
Key people
Hiroshi Mikitani
ProductsRetail
ServicesOnline shopping
ParentRakuten, Inc.
Websiterakuten

Rakuten /shopwas ane-commercemarketplace based inSan Mateo, California.Previously known asBuy,it was founded in 1997 by Scott Blum. In 2010, it was purchased by Japanese companyRakuten,and rebranded as Rakuten.[3]This business was shut down by Rakuten in 2020.[4]

History

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Buy (1997–2010)

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Buy originally sold only computers, at below cost, intending to bring in revenue through advertising and ancillary services such as sales of warranties and equipment leases, before expanding into numerous other categories, including software, books, videos and games.[5]The company sold $125 million worth of goods and services in 1998, its first full year, beatingCompaq's 1984 record for most first-year sales.[6]

After raising $120 million from Japanese tech companySoftBankin 1998 and 1999,[6]founder Scott Blum sold a portion of his stake to SoftBank in 1999 shortly before Buy 's $195 million initial public offering in early 2000.[7]On February 8, 2000, Buy went public at $13 per share and rose to $37.50 per share that day, its peak price.[6]Mr. Blum still owned approximately 48% of the company at the time of the IPO. Stock values dropped in the year following Buy 's initial public offering, and it was delisted from theNASDAQ Stock Marketfor failing to maintain a stock price above $1 per share.[6][7]In February 2001, the UK arm of buy was sold to the UK department storeJohn Lewis,[8]and the technology was repurposed to create a new transactional website for the John Lewis chain. In November 2001, Blum reacquired Buy for $23.6 million (about 17 cents per share), and took the company private.[6][7]

In 2002, Buy went beyond selling solely electronics, movies and music, adding more soft goods to their catalog, such as sports equipment, apparel, shoes, health and beauty products. It was at this time that Blum placed a full-page ad inThe Wall Street JournalpromisingAmazoncustomers that Buy would prove to be the better buying option. This statement came shortly after Buy announced a 10% below Amazon cost on all books sold on the site and free shipping site-wide, with no minimum purchase required. At the time, Amazon had 25 million customers, approximately five times as many as Buy.[9]

In March 2002, Buy announced its first issue ofBuy Magazine,providing information about the latest electronic devices and computers, with four issues per year and a circulation of five million. The magazine was later converted into an all-digital publication.[10]

On January 25, 2005, Buy filed to go public again,[7]before withdrawing those plans in May 2007.[11]

Buy officially launched a partnership witheBayin April 2008, striking a deal to sell millions of items on eBay.[12]Buy would quickly become the largest seller on eBay.[3]Many independent sellers were upset that, unlike other sellers, Buy was allowed to sell on eBay without paying listing fees.[13][14]

From 2007 to 2009, the number of products for sale in Buy 's marketplace grew from 2.3 million to 5 million, positioning it as the number two e-commerce site behind Amazon.[12]

Rakuten purchase and rebranding (2010–2020)

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In May 2010, Buy was acquired byRakuten, Inc.,the largest e-commerce retailer in Japan,[3][15]for $250 million in cash.[16][17]This was considered Rakuten's attempt to enter the American e-retail market,[16]and to compete globally with e-commerce competitors such as Amazon and eBay.[3]At the time, Rakuten in Japan had 64 million members,[16]and Buy had 14 million customers, mostly located in the US and Europe. Half its products were sold directly to customers and half were sold through other e-commerce businesses using its online store.[3][16]

On January 10, 2013, Rakuten announced the official rebranding of Buy to Rakuten Shopping,[18]which became effective on January 31, 2013.[19]On the site, rebranded as Rakuten, there were a series of unique virtual storefronts for shoppers to browse and connect online,[17]with the focus on providing high quality, unique merchandise, and a shopper- and merchant-friendly experience.[15]Each seller within Rakuten 's marketplace could customize their page's layouts, photos and promotions, and can communicate with customers directly.[15]With the rebranding, the site was populated entirely by individual merchants, whereas previous iterations of Buy had just a portion of the site devoted to independent sellers.[20]Rakuten also launched e-commerce sites in Germany, Brazil, France, China, Thailand, Malaysia, Indonesia, Taiwan, South Korea, Austria, Russia, Canada and the United Kingdom.[15][21][22]

On September 9, 2014, Rakuten announced the purchase of San Francisco–based online rebate siteEbatesfor $1 billion in cash. The acquisition of Ebates, a website that allows customers to earn cash back when shopping online with over 2,600 retailers, gave Rakuten additional presence in the US e-commerce market, as well as a way to offer items such as online e-coupons.[22][23]

In March 2015, Rakuten partnered with Bitnet to acceptbitcoinas payment.[24][25]

On August 12, 2020, Rakuten sent an email to its customers stating that it would be closing its US operations as of September 15, 2020: "Rakuten's United States marketplace service located at Rakuten /shop will stop taking orders from September 15, 2020".

Controversy

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In May 2013, some users started complaining about alleged fraudulent charges on credit cards after using their cards on Rakuten. In some cases, it was alleged that the victims' names, social security numbers, dates of birth and credit card information were used to open accounts at other online vendors.[26][27]In response, Rakuten issued a statement that the company had undertaken significant measures to validate the security of the site, and that a third-party technical forensics investigation found no wrongdoing on their end.[28]

References

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  1. ^"Rakuten WHOIS, DNS, & Domain Info - DomainTools".WHOIS.Retrieved2016-08-05.
  2. ^Richard Fletcher,"Buy is sold to its founder",The Telegraph,August 12, 2001.
  3. ^abcdeClaire Cain Miller,"Buy Makes Its Biggest Sale Yet: Itself",The New York Times,May 11, 2010.
  4. ^"Rakuten is shuttering the online shop formerly known as Buy".TechCrunch.Retrieved2021-03-17.
  5. ^Nee, Eric (1999-03-29)."Meet Mister Buy(everything)".Fortune.Retrieved2008-02-27.
  6. ^abcdeQuentin Hardy,"The Death and Life of Buy",Forbes,January 21, 2002.
  7. ^abcdSarah Lacy,"Back to the Future at Buy",Bloomberg Businessweek,January 25, 2005.
  8. ^"John Lewis snaps up buy",BBC News
  9. ^Wolverton, Troy (25 June 2002)."Buy vows to undersell Amazon books".CNET.Retrieved7 February2013.
  10. ^"Buy Launches Buy Magazine".The Write News.Writers Write, Inc. 1 March 2002.Retrieved7 February2013.
  11. ^Dean Takahashi,"Japan’s Rakuten acquires e-commerce site Buy for $250M",VentureBeat,May 20, 2010.
  12. ^abRenfrow, Jacqueline (1 March 2009)."Buy Grows Up in a Hurry".Response Magazine.Retrieved7 February2013.
  13. ^Brad Stone,"Buy Deal With eBay Angers Sellers",The New York Times,July 14, 2008.
  14. ^Renee Oricchio,"Et Tu EBay?”Inc.,July 15, 2008.
  15. ^abcdOmar Akhtar,"Rakuten: The biggest e-commerce site you haven’t heard of",Fortune,March 22, 2013.
  16. ^abcdToto, Serkan (20 May 2010)."Buy Gets Acquired by Japanese E-Commerce Giant Rakuten For $250 Million".TechCrunch.Retrieved7 February2013.
  17. ^abJay Alabaster,"Rakuten, Japan’s ‘Amazon,’ launches U.S. brand, the former Buy",PC World,February 2, 2013.
  18. ^"Rakuten Buy Relaunches as Rakuten Shopping".rakuten.10 January 2013.Retrieved12 February2013.
  19. ^Allison Enright,"Rakuten rolls out a new name and new seller fees",internetretailer, January 31, 2013.
  20. ^Laura Heller,"Buy to Become a Marketplace-only Site, Hopes to Take on Amazon",dealnews,January 28, 2013.
  21. ^Ina Steiner,"Rakuten Global Branding Continues with UK Marketplace Launch",ecommercebytes, October 23, 2014.
  22. ^abSarah Perez,"Rakuten Buys Ebates For $1 Billion",TechCrunch,September 9, 2014.
  23. ^Mark Scott,"Rakuten of Japan to Buy Ebates, a U.S. Rebate Site, for $1 Billion",The New York Times,September 9, 2014.
  24. ^Takashi Mochizuki,"Rakuten Starts Accepting Bitcoin",The Wall Street Journal,March 16, 2015.
  25. ^Jon Russell,"Rakuten To Put Its Bitnet Investment To Work And Accept Bitcoin Worldwide",TechCrunch, March 17, 2015.
  26. ^Superville, Denisa."Bogota police warn website users of suspicious charges".NorthJersey.Retrieved6 June2013.
  27. ^Northrup, Laura."Here's Everything We Know About The Rakuten/Buy Credit Card Breaches".Consumerist.Retrieved6 June2013.
  28. ^Laura Northrup,"Rakuten Is Taking Credit Card Fraud Complaints Very Seriously",Consumerist,June 10, 2013.
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