There hasn’t been much known movement from Rakuten in the blockchain loyalty space for quite some time, until the recent announcement regarding a new partnership with blockchain-centric Techrock.
Rakuten is Japan’s largest, and the world’s third largest, ecommerce marketplace platform with over 90 million registered users, 10.000 employees, and yearly global revenue of over 1 trillion yen.
Rakuten have announced a partnership with Chinese company Techrock who use blockchain technology built on Hyperledger in two aspects of their business. On one hand, they use their unique blockchain-based anti-counterfeit technology, which incorporates smart labelling NFC, to verify and create a permanent record of a products authenticity. On the other, Techrock offers a loyalty program for customers who use the service to purchase authentic products.
Techrock’s labelling technology ensures that products are real – the customer can verify this with an app on their phone, and once they do so, they earn their reward points at the same time. The rewards can be used to purchase more goods in the WeChat store, which encourages customers to keep using Techrock.
What the CEO’s have to say about the partnership:
“Techrock’s anti-counterfeit technology allows Chinese consumers to
verify they have received a genuine Rakuten product, giving a unique value
advantage for cross-border ecommerce. Together with Techrock, we can further
develop blockchain traceability and work towards cross-ecosystem integration of
our platforms’ loyalty points.”
– Ye Jianyou, Global Trading & Flagship Section / Vice Senior Manager of Rakuten
“We’re very excited to be able to provide millions of
Chinese consumers with Rakuten’s high-demand, quality Japanese products, and
work together to improve cross-border ecommerce as it exists now.”
– Alex Busarov, Co-founder & CEO of Techrock
Rakuten has long had an interest in blockchain companies and blockchain loyalty, but this partnership really only touches on blockchain loyalty for them in an elementary way. Given past announcements, we did expect something more robust from Rakuten in this space. However, there are two very strategic outcomes which should act as a stepping stone for something larger:
1. Build presence in the Chinese market:
Rakuten is looking to expand its reach in China, where it is far from the leading retailer Alibaba who have also been reported to be investigating use cases for blockchain technology within supply chain.
Techrock’s partnership with Rakuten means that Chinese customers can purchase from Rakuten without having to worry about fakes. This has been a real problem in the Chinese market with some reports finding that more than 90% of the food sold in China is faked in one way or another, and with products like health supplements and baby formula this can be a matter of life and death so Chinese consumers are willing to pay a premium for certainty of authenticity.
Whilst this is absolutely a global issue, not just an issue in China, China is the largest market for companies like Techrock that can deliver this certainty where consumers will happily purchase from Rakuten online given the loss of trust in local vendors. The Rakuten and Teckrock partnership can ultimately support the demand whilst also giving Rakuten access to customer via WeChat which is a very hard channel for non-Chinese companies to penetrate.
2. Expose customers to blockchain loyalty
This will be the first time many of Rakuten’s customer base will be exposed to blockchain rewards. This can act as a cost-free trial for Rakuten where they can analyse the behaviours of their consumers to blockchain loyalty programs and use these learnings to shape their own blockchain loyalty play which may also be integrated across the Teckrock ecosystem as eluded to by the Rakuten CEO. If and when Rakuten launch their own program, their customers would have had exposure to this type of program design, be cryptocurrency owners and understand the benefits of blockchain loyalty, thus increasing the likelihood of success of their own native cryptotoken.
Initially, I thought this news was uninspiring, given the previous hype and potential of Rakuten to run a successful blockchain loyalty program due to their size and scale. However, I now see this as a strategic move which will expose Rakuten’s customers to the benefits of blockchain both in supply chain and blockchain rewards prior to fully committing to the launch of their own token, whilst also giving them access to the Chinese market.
This is just another little step towards full blockchain traceability, consumer insights, and integration of a blockchain loyalty solution for Rakuten. Hopefully it’s not too long between announcements next time.
Stacey Lyons is the Marketing Director at Loyalty & Reward Co, a leading loyalty management consulting agency based in Sydney. Stacey has years of experience within loyalty, marketing and eCommerce across multiple channels and business models. Most recently, Stacey has been managing the investor, member and retailer communications for blockchain loyalty company EZToken Rewards.