Rakuten Inc., Japan’s largest e-commerce company, said Friday that it posted a double-digit jump in full-year revenue while its bottom line suffered on higher costs and a high comparative base.
Net profit for the 12 months ended Dec. 31 fell 37 percent to 44.44 billion yen, or $368.9 million at average exchange rates for the period. Operating profit for the year slid 11 percent to 94.69 billion yen, or $785.9 million. Sales rose 19.2 percent to 713.56 billion yen, or $5.9 billion.
“The world economy…continued to stay on a gradual recovery track, although attention must be paid to factors including normalization of U.S. monetary policy, uncertainty over the future outlook of the Chinese economy, and the impact of the falling crude oil prices. The Japanese economy continued its gradual recovery with the effects of various policies amid continuous improvement in the wage and employment condition,” the company said.
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The majority of Rakuten’s business comes from Japan but the company has stepped up its international presence in the past year with the acquisitions of Viber and Ebates in 2014.
Rakuten’s Internet services segment, which includes its e-commerce activities in Japan and abroad, saw its annual sales climb 21.5 percent to 362.75 billion yen, or $3.01 billion.
“[T]he Rakuten Group actively worked on strategies to open up the Rakuten ecosystem, enhanced services for smart devices, promoting marketing which utilizes big data, implementing measures to improve user satisfaction, and enhancing services for overseas consumers among other initiatives in its core domestic e-commerce services,” the company said, adding that domestic e-commerce services revenue grew 7.8 percent.
Rakuten said Ebates “contributed significantly to the growth” of its performance.
The company said it is targeting 1.7 trillion yen, or $14.11 billion at current exchange, and 300 billion yen, or $2.5 billion, in non-generally accepted accounting principles operating income by 2020 as part of its new strategic plan with an emphasis on international expansion.
“Transformation of the business model for e-commerce will include a greater focus on customer satisfaction and a quality experience in Japan, where Rakuten is the market leader; development of the ecosystem model in Taiwan; acceleration of cross-border trading in East Asia; an open e-commerce strategy led by Ebates in the United States; and introduction of C2C mobile services across the globe,” the company said.
Rakuten said it plans to close its “early model” e-commerce marketplaces in Singapore, Malaysia and Indonesia but it will look for new opportunities in Southeast Asia and it will maintain its regional Asian headquarters in Singapore.