REX: Rakuten Instalment Options Hit Success

FACTS

• During the recent One to One Monaco event, the e-commerce leader Rakuten insisted on their successful instalment option and the impact it had on the group’s strategy.

• Rakuten teamed up with Cofidis Retail on crafting 2 new solutions:
  • 4xCB (option for splitting payment in 4 instalments)
  • A credit offer, splitting transactions up to €3,000 into 5, 10 or 20 payments
• Goal: increase the number of instalment options via adding new payment facilities.
• Results:
  • 4xCB:
    • Average cart increased 6 times
    • new customers with 4xCB vs card payments
    • intent to reuse the service
  • With credit solution:
    • Average cart increased 7 times
    • Recurring purchases: 1.7 per year
    • 85% customer satisfaction
• The service implemented jointly with Cofidis Retail was later included in Rakuten’s ecosystem. For each instalment-based purchase, the group pays an additional percentage to their members. This generated:
  • A two-fold increase in order volumes
  • 50% increase in average cart

Rakuten in 2018:

• 16.6% increase in turnover (to €8.8Bn)
• +28.4% net income (to €1.1Bn)
• 17,000 employees in 30+ countries
• Marketplace: over 1.3Bn members

CHALLENGES

• Adapted payment solutions. The payment step is key in the purchasing process. According to a survey by Applause, 87% of customers drop their shopping cart if this process takes too long or is overly complex. Just like other Marketplace, Rakuten has to provide their merchants with various means of payments.
• Securing customer loyalty. Acquiring and retaining customers was one of their first goals when Rakuten implemented their instalment options. These customers are increasingly demanding and expect a wide range of payment solutions. Instalment options are means to acquire more customers.

MARKET PERSPECTIVE

• The e-commerce giant speed up the pace in addressing the payment sector and comes up with multiple initiatives in line with their customers’ needs. In September 2018, they launched Rakuten Card Payment with Points Service, enabling members to use their loyalty points for paying bills as well as other services from their website.
• Other major e-commerce players opted for Cofidis Retail to feature payment facilities. Since last November 2018, Amazon has been allowing their customers to split their payments in up to 24 instalments, in partnership with Cofidis. And their list of partners also includes PayPal and Rue du Commerce.