E-Commerce Giant Helping the Little Guy?

As the head of Rakuten, the world’s third largest e-commerce company, Hiroshi Mikitani claims to have no qualms about taking on Amazon, according to an article recently published in CNN Money.

Rakuten has gone on a buying spree in recent years, purchasing the Canadian e-reader company Kobo, investing in $100 million in Pinterest, and expanding its presence in the US with Buy.com.

Amazon = Vending Machine

But what makes it different than Amazon? Rakuten avoids warehousing, instead relying on what CNN Money calls the “B2B2C” business model. Instead of getting involved directly in the selling process, Rakuten provides an e-commerce platform that connects merchants to consumers.

“How does Amazon work? It’s just a giant vending machine. Product centered,” Mikitani was quoted in the CNN Money article. “They create a huge catalogue. You sell on there, but if it sells well, Amazon will then be your competitor.”

What’s unclear is whether Mikitani’s merchant-centered approach will catch on with consumers. Will they choose a small seller listed on Buy.com? Or will they choose the low price and reliability of Amazon?

You can read more about Hiroshi Mikitani at cnn.com.

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