Rakuten Linkshare has recorded a 52% year-on-year growth for its UK operation during the first quarter of this year. The growth wasn’t the only good news for parent company Rakuten – it has also secured the leading share of an $100million investment in social media website Pinterest.
Pinterest is valued at $1.5billion, and the money for the latest $100m round of investment comes from Rakuten as well as existing backers Andreessen Horowitz, Bessemer Venture Partners and FirstMark Capital plus angels. The investment will primarily be used to improve Pinterest’s service and broaden its community globally, but Rakuten’s involvement heralds the beginning of a strategic partnership with an eye on developing the internet service company’s operation in Japan and Rakuten’s other 17 global markets.
Rakuten’s UK arm has already eclipsed expectations. Its Q1 2012 year-on-year profit growth increase of 52% easily surpassed Forrester Research’s UK e-commerce growth prediction of 11%, which was given as part of the analyst’s European Online Retail Forecast: 2011 to 2016 report. Rakuten also outperformed forecasts in the US, and by quite a wide margin. According to Forrester’s US Online Retail Forecast: 2011 to 2016, overall e-commerce is expected to grow by 12% in 2012. Rakuten LinkShare Network improved on the prediction, with same store sales increasing 31% year-on-year in the first quarter.
Continuing worldwide growth will be a priority for the company, and Rakuten appears to be thinking outside of the box when searching for new methods of doing so. CEO Hiroshi Mikitani is trying to move away from the traditional online retailer approach. “While some may see e-commerce as a straightforward vending machine-like experience, we believe it is a living process where both retailers and consumers can communicate, discover, and curate to make the experience more entertaining,” he declared.
The dawn of social commerce?
Rakuten will be hoping that it can somehow use Pinterest to enable social commerce, particularly as the site is already lauded for its volume of referrals within certain retail categories. Various ideas and functionality used in the social-sharing site could be transitioned to e-tailers – for example, imagine a more visual presentation of products with a focus on social sharing.
Rakuten Linkshare’s latest growth announcement prompted the company’s chief executive, Yaz Iida, to discuss a breaking down of country borders. Pinterest’s global appeal could help to achieve this goal should Rakuten harness its technology for specific local operations such as those provided by Rakuten Linkshare. ““Around the globe, we’re seeing online shopping evolve from a regional transaction-oriented experience into a worldwide marketplace that goes beyond borders,” he said.