Japanese e-commerce titan Rakuten is diving head first into the food delivery wars. One of the largest companies in Japan, Rakuten announced in May that it would launch an Uber Eats-like service called Rakuten Realtime Takeout, which would work within its Rakuten system and give customers points to use through the company’s many services.
But Rakuten is late to the punch on its own turf. UberEats has been the dominant force in Japanese food delivery since at least 2018 when we looked at the state of food delivery apps and found that the company had about 127,800 restaurant partners across 25 countries. Today, Uber has 13,282 currently open locations across Japan. In the five-and-a-half months since Rakuten Realtime Takeout launched, the company has only 1,693 currently open partners in comparison.
Food delivery has taken off during the pandemic and has been a crucial point of defense for companies like Uber, which have pivoted almost completely towards food delivery as its flagship ride sharing services have slowed down dramatically. Since 2018, the industry has also been consolidated; Uber acquired Postmates for $2.65 billion in July and Just Eat acquired Grubhub for $7.3 billion just a month earlier. Rakuten is looking to jump in while the iron is hot and establish a food delivery service that can take advantage of COVID-19 to rise to prominence even beyond the pandemic.
Below, we’ve provided a map pinpointing all of Uber Eats and Rakuten Realtime Takeout’s partnered restaurants in Japan
Despite having fewer locations than Uber, Rakuten’s service has several advantages over its international incumbent. First is its integration with other Rakuten services. Since at least 2009, Rakuten has often been called “The Amazon of Japan,” and not without good reason. The e-commerce conglomerate is involved in online shopping, media, sports, investment and more, just like how Amazon has a leg in what feels like every industry possible here in the United States.
In its press release announcing the service, Rakuten said customers will be able to use an existing Rakuten ID to order and pay for meals and get points to use across its multiple services. By bringing it directly into the fold, Rakuten may be able to convert a significant portion of its users - there is no need to make a new account for something like Uber if you don’t already have one since Rakuten already has your information on hand.
The other tent pole for long-term, post-COVID success is Rakuten’s focus on rural areas and city outskirts. Our map shows that the majority of Uber’s partnered restaurants exist in clusters around major cities like Tokyo, Osaka, Fukuoka and Nagoya. Rakuten is focused on these areas as well, but it’s notable how far out of the cities some of its partners are. Rakuten also has a particular head start in the northern half of Honshu island, with several locations outside of major cities north of Tokyo. Uber does, however, have more locations in the northern cities of Sendai and Niigata.
One of Rakuten’s weakest areas, however, is Kyushu, Japan’s third-largest island and the one closest to continental Asia. Uber has a significant hold over seven major cities on the island, including Fukuoka. By comparison, Rakuten appears to have only 20 locations in the area.
By spreading out to rural or non-metropolitan areas which Uber hasn’t touched, Rakuten gains at least some advantage by being those consumers’ only option for food delivery. It is not, however, significant enough to hold a candle to Uber’s massive hold on the market.
Rakuten’s saving grace may be its brand recognition, cross-service integration and built-in consumers, and even though COVID is causing the delivery sector to grow rapidly, the Realtime Takeout service has only existed since May - that’s just five months compared to Uber’s several years in the Japanese market. Rakuten is likely to keep expanding its partnered locations in an effort to truly compete with Uber, but they could be fighting a losing battle just by being so late to the game.
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