Rakuten Mobile to Cut Retail Outlets by 20%

Japanese technology conglomerate Rakuten Group plans to shut down 20% of its mobile retail outlets across the country as part of its cost-cutting measure, bringing its 1,261 stores down to 1,000.  

Despite its fast expansion, the tech company struggles to reach its profitability goals this year. This is amid losing a net worth of $2 billion in the first nine months of 2022. 

Since discontinuing its zero-yen plan, which provides free data for its light users, the company has experienced a significant decrease in customer traffic at its stores. This also left a significant drop in its user total from over 5.8 million subscribers to less than two million at the end of September 2022. 

"We aim to increase points of contact with consumers and further improve recognition," a representative from Rakuten explained. He also added that the company currently has 280 different post offices in Japan and plans to distribute flyers to 20,000 other post offices to push for online sign-ups. 

Connections through employees such as relatives and acquaintances have also been one of the methods Rakuten is currently using to attract new customers. 

Kenji Fukuyama, an analyst at UBS Securities in Tokyo, told Nikkei Asia that although the Japanese tech company said that its customer figures have returned to a net increase, "it will be extremely difficult to achieve the profitability goal."

In March 2021, the company made a deal with Japan Post Group to offer account sign-up counters for Rakuten in post offices and use its delivery network services for marketing campaigns.  

The eCommerce giant showed much promise when it first entered the Japanese telecoms market in 2020, launching mobile services using its greenfield Open RAN-based network.