Creative Idea Powerhouse

I’ve been following on the local e-commerce growing and path-making landscape. Personally I found it is easy for any supplier, corporate or merchant to built a virtual store-front, and announced that they are in e-Commerce and selling to its potential 1.5billions consumers online. It is so amazing that these people have a mindset that once their portal, store front are listed on the search engine like Google or Yahoo, the next thing there will be millions of people clicking through their store and make orders. Yes, it is so simple as 1-2-3 to be listed in Google, and any SEO company can give you value added services to be on first 3 page ranking too, with little investment you willing to pay. However, that’s just the marketing talk and to be very honest, I get the response from many virtual store owners feedback, it doesn’t sell.

In Taiwan or Japan, if you would like to be successful as a B2C or C2C merchant, there is a set of detailed courses for you to go through. The course cover from front page design, product photo appearance design, product keywords design, SEO, how to gain consumer’s trust … and they have a stack of facts and statistic to guide you on what consumers look for when come to online, and this value on education is what I see lacking still in local market. Even there are people giving talks, sharing knowledge on their personal experience, there is still lacking of environment that value these knowledge. We are still in the learning path where suffcient sacrifies and wastage investment in e-Commerce is needed until the industry is mature. Should I say this. Again and again I asked myself, which is the successful e-commerce site you aware in Malaysia that is really making big bucks? Yes you can blame that the Malaysia consumer market is relevant small where economic of scale may not be sufficient to kick a big brand, or our internet penetration rate is low, or even because our retail outlet rental rate is lower compare to Japan or HK or Taiwan causing that there are still many stores out there for people to have choice and perfer physical experiencial touch. Yes all these reasons are valid, valid enough for people to stay away from this big piece of cake. ASEAN market having more than 500mil people, an open untap market, high young generation that are ready to enter the market and soon to be the largest spending machanism to continue growing the countries’ GDP.

The challenge for e-Commerce not ready in Malaysia due to IT or penetration issues? For credit card, the 3D authorisation method is good enough and strong to protect merchants and consumers, the broadband infra is ready (in fact I don’t see how fast you need your broadband connection to be to place an online oder), we have high penetration rate for internet access, and yes, 3G and Wimax does help, e-commerce technology and platform, webpage design service is available widely and cheaply (in fact you can hire a part time freshie to get you a page for very very Reasonable cost to invest, with full shopping cart function, payment gateway etc.). If the government will put some effort to enforce cyber law and take real action to follow through the online trading fraud, and create a trustable trading environment, will this help?

By far, this is just the first step e-Commerce challenge for B2C. There are still many more challenges await ahead for those who are study for potential investment into this 1.5bil consumer market. Logistic, payment gateway, security, IT infrastructure scalability, and many more issues still remain a challenge to explore. Take an example on logistic challenge, Amazon announced its 14th record holiday season, with 72.9 items ordered every second, up from 62.5 last year. How many resources are needed to be in placed to process this huge orders spike during holiday season? nearly 73 orders coming in every one second when the clock tick once. The entire supply chain, the IT capacity to process all these, and payment gateway to verify, QC to ensure right item is shipped to the right person with lowest error (imagine 1% return rate due to human error in a day will cause more than 63,000 items rejected and the cost of this error in logistic itself will result losses of $630k a day)

The day that orders peaked was on December 15th, when 6.3 million items were placed into Amazon’s checkout carts. That number was up 17 percent from the peak order day in 2007 (December 10). With five fewer shopping days this season, orders shipped peaked at 5.6 million on a single day, up 44 percent from last year. Some of the best-selling items this year included Eyeclops night vision stealth goggles, the Nintendo Wii, Razor scooters, Samsung 52-inch LCD HDTVs, The Dark Knight DVD, and the Twilight Saga books by Stephanie Meyer. Amazon says it was able to ship 99 percent of all holiday items in time for Christmas.

How does this year compare to seasons past? Barclays analyst Doug Anmuth provides the following comparisons:

Peak items ordered on a single day

2008: 6.3M
2007: 5.4M
2006: 4.0M
2005: 3.6M
2004: 3.6M

Items ordered per second

2008: 72.9
2007: 62.5
2006: 46.3
2005: 41
2004: 32

Peak items shipped on a single day

2008: 5.6M
2007: 3.9M
2006: 3.4M
2005: 2.7M
2004: 2M+

When you start to pickup latest news, the is only one headline that never goes away, the global recession, and ecomonic crisis. Somehow, something that is conflicting with this big headline, is the e-Retailing and online shopping industry is keep releasing the exciting news about the growing sales and revenue during this coming Christmas. Perhaps online shopping and e-commerce is one of the industry that is ‘Yet’ to be impacted peaceful heaven.

Market Research firm comScore figure shows that United States’ Cyber Monday sales has rising for 15% compare to Y2007, reaching US$846mil in revenue. For United States, the overall spending on e-Retailing (online shopping) has topping $887million in Dec 9th, making it the highest record in the history for a single day transaction. Compare to any other industry in US currently, the e-Retailing empire is the holy grail for the retailing industry.

According to Karin von Abrams, analyst from online research firm eMarketer also pointed out from the research conducted by Deloitte 14th Annual Christmas Retailing report, the e-retailing in UK is still a profitable business compare in the overall retailing industry. Deloitte also predicted that the total spending for online purchasing gifts, foods and presents will reaching $8.65billion, a 10% growth compare to last year.

Even the CEO of Google, Eric Schmidt also announced during his recent interview that, from the trending of the keyword search, it can foresee that the consumers nowsday are relying on the search engine to search for promotions and best price.

All these happen in US and UK, where e-Retailing business is matured. What about in Malaysia? or South East Asia? My question to Malaysian is, can anyone help me to name the top 3 e-Retailing site in Malaysia beside Lelong.com? I’ve been abit upset to read from recent e-Retailing report on Asia and Malaysia, where the Top 3 most visited e-commerce website is 1.Ebay, 2. Amazon, 3. Apple.

For all Malaysian Technopreneurs out there who inventing, reinventing, manipulating, or changing the DNA of Amazon.com to become your killer online store, lets have some talks. I know you guys are good in developing tools, and you can build the next Amazon, Facebook, Youtube or Alibaba with helps of open sources network, the bottom line, are you able to market it, which I means seriously, doing it big enough to match the scale of Amazon, Rakuten, Zlio, Alibaba? Lets have some talks folks!

Search Engine rankings are a serious topic in today internet & e-Business world!

Finding ways to attract more visitors to your Shops is the basis for your success as a Shopkeeper. Let us therefore talk to you about ways to make your e-Shop’s product pages (or any other webpage, for that matter) more attractive for search engines.

1. An optimized page should contain at least 100 words. Don’t hesitate to let your imagination run wild when it comes to the description of your products, thus creating quality content. Keep in mind that the first 30 to 50 words of a page are essential for that page’s rankings.

2. Strategic keywords should be placed at the beginning of the page, preferably within the first paragraph. For even better results, it is also recommended to use the feminine and plural versions of these keywords.

3. Keywords are more effective when they are emphasized in the following ways :

- put the keywords in bold script

- create a hyperlink on important keyword

- create a bold hyperlink, in order to achieve maximal efficiency

4. Repeat the most strategic keyword three times in the product description page. The perfect keyword density index score (that’s the number of occurrences of the keyword divided by the number of words in the page) is about 3 %. Try to reach a density of 2 % to 5 % with your important keywords.

5. Use the right words for your links. The word used for your link must be highly relevant to the content of the website it links to. It is totally ineffective to use words such as “read more” or “click here” for your links. Furthermore, you should always choose words (i.e. text) for your links, instead of an image.

6. Aim at quality of content instead of quantity. The more interesting and original the content of your product pages on your e-Shop, the more people will point “naturally” to your website, without you having to create partnerships or link exchanges with those other sites. The more quality links point towards your shop, the better your shop’s ranking in the Search Engines. If you want to participate in link exchanges, you should choose content-oriented partnerships that will offer real added value for your visitors.

Enjoy and happy e-shopping..

I have finally complete the base case study on Rakuten Inc, and also its largest retail mall Rakuten Ichiba.
The company currently claim that they have exceed 40million registered members, and more than 25,000 merchants stores using their platform to sell online. Its e-commerce business unit achieve sales of 14.2bil Yen in Q1 08, and 15.4bil Yen in Q2,08 respectively, which turn to be approximately US$100mil per quarter. The group financial reports US$1.7bil net sales in 2007, with US$304mil in Net income during the same period (17.2%) which is an interesting figure for a e-Commerce company in Asia. In early 2008, Rakuten Ichiba joint ventured with Taiwan’s President Chain Store to found Rakuten Ichiba Taiwan as its first attempt to bring its cybermall business oversea. The JV formed a NT$174million giant and successfully captured 440 shops signed up and 160k members registered. The formation also help Japanese merchants to ‘export’ their products to Taiwan members, which claims to be a strategic move for Rakuten Ichiba global expansion.
However, when we compare these figures with Amazon.com, it is really interesting to know that Amazon is currently having 78mil active members, and gross sales of US$14.8bil. during the same Y2007 financial report. Amazon also has seller group (merchants) of 1.3million worldwide.

Due to recent project, I need to do a research on the Japanese giant e-Commerce Rakuten Inc. Its 2007 reporting net sales reached US$1.76 billion and Net Profit of US$304million (17.2% of Net Sales). It has total of 43.9million members under Rakuten Group (which 35.9million are from Malls business); and 22,396 merchants (stores). Under the leadership of its founder and CEO, Mr. Hiroshi Mikitani, the company has involves itself into multiple businesses such as Credit Card & Payment, Portal and Media, Telco, Securities and Travel industries.

I have gathered a short summary about this company to share with the entreprenuers in Malaysia:

5 secrets of Mr. Hiroshi’s Rakuten Success
1. Get things done (Kaizan concept)- continue learning and improvement from day to day – also the secret of Toyota Motors
2. Complete Professionalism- be the professional, the best in what you do in your industry – Jack Welch GE’s spirit
3. Hypothesize, Execute, Verify & Incorporate – visualize, and focus, then execute and corrective action
4. Customer satisfaction maximization - easy to say by many companies, even large corporations but when come to implementation, I still see many local companies take customers as secondary priority, where I have many bad experience on this.
5. Speed!, speed!! & speed!!! – this personally give me a big motivation to get onto action rather than plan plan plan….

Of course, the company itself also equip with most of the attributes to be a successful tech & web company, good working environment, free foods, continue learning & improvement culture,  and I have to admit that the most important thing over this is that they are putting customer as the first and most important priority all the time. They even have their Rakuten University to help customer to improve their e-commerce store, and a team of e-marketing experts to provide instant support and help when needed. Ask back our local website builder company, how many really putting the efforts on this? Time to change..

I will soon put up my whole paper about this company to share with you, meanwhile email me if you need to find out additional information about this company, or you have some insightful information to share with me drop me msg at eddie at ciph dot biz.

Rakuten.co.jp users come from these countries:
Japan95.1%
China2.6%
United States0.5%
South Korea0.3%
Taiwan0.2%