Rakuten CEO Defends Mobile Venture, Bets Big on AI with Exclusive User Data

Rakuten's Mobile Venture: A Strategic Move for AI Development

Hiroshi Mikitani, the billionaire founder and CEO of Rakuten Group Inc., has staunchly defended the company's controversial foray into Japan's competitive mobile market, despite four years of consecutive losses. Mikitani argues that the telecom arm, which has amassed over 8 million users, is pivotal for Rakuten's future growth through artificial intelligence (AI) 1

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The Power of Exclusive User Data

Mikitani emphasizes the significance of the data collected from Rakuten's mobile users, describing it as "extremely powerful" 1

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. This exclusive dataset is expected to play a crucial role in training AI systems that will benefit various aspects of the conglomerate's operations. The CEO's vision extends beyond competing with tech giants like OpenAI or Google, focusing instead on building "a more vertically integrated, specialized AI" 1

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Cross-Platform Synergies and AI Applications

Rakuten has observed that users of its mobile network tend to be more engaged with the company's other services. These customers spend almost 50% more on Rakuten's online shopping mall and show increased activity across its credit card, travel, banking, and brokerage operations 4

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. This cross-platform engagement provides Rakuten with a rich, diverse dataset for AI training.

AI-Powered Innovations on the Horizon

The company is poised to leverage its AI capabilities in innovative ways. One upcoming project is the launch of an AI assistant designed to serve as a travel and shopping agent for customers 4

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. This initiative demonstrates Rakuten's commitment to applying AI technology to enhance user experiences and potentially create new revenue streams.

Data-Driven Competitive Edge

Rakuten's strategy aligns with a broader trend in the e-commerce industry, where companies are increasingly relying on vast troves of customer data to power AI-driven recommendation engines and personalized shopping experiences. As traditional data sources become exhausted, businesses like Rakuten are exploring innovative data collection methods to maintain a competitive edge 4

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Expanding Ecosystem: Rakuten+

In a related move to enhance its e-commerce offerings, Rakuten recently introduced Rakuten+, a membership program specifically created for designer brands. This initiative aims to connect high-end brands with select, highly engaged Rakuten members, offering access to the platform's most loyal and active shoppers of designer fashion 4

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The Mobile Gambit: Short-Term Pain for Long-Term Gain?

While Rakuten's mobile venture has been a financial burden, weighing on the company's profitable online shopping mall and finance operations, Mikitani remains confident in its long-term potential. The CEO's unwavering stance suggests that Rakuten views the short-term losses as an investment in building a robust, data-rich ecosystem that will fuel its AI-driven future 1

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As Rakuten continues to integrate its various business arms and harness the power of AI, the company's bold strategy in the mobile sector may prove to be a pivotal move in reshaping its position in the competitive digital landscape.