Rakuten means “optimistic” in Japanese. And that’s a fitting word for Rakuten Inc. executive Yaz Iida’s outlook on the Japan-based e-commerce operator’s future in the U.S.

Rakuten is a business titan in Japan. Its biggest venture, its Japanese marketplace Rakuten.co.jp or Rakuten Ichiba, accounts for one-third of e-commerce transactions in Japan. Rakuten Group, meanwhile, owns 40 businesses in the country ranging from financial services to insurance to the Rakuten Eagles, a professional baseball team.

Seeking to extend its e-marketplace business domain outside its home country, Rakuten acquired U.S.-based online marketplace Buy.com in 2010 for $250 million and began operating it as Rakuten.com in the U.S. But after four years it hasn’t yet been able to take much market share from U.S. competitors Amazon.com Inc. and eBay Inc., says Iida, CEO of Rakuten Marketing and who this month became president of Rakuten USA Inc.

“We acquired Buy.com to try to replace the same model we have in Japan,” Iida says in an interview with Internet Retailer. “Our presence so far has been very small and not big enough to make an impact in the U.S. to compete against Amazon and eBay.”

Iida, however is convinced a fresh acquisition will help it make more headway stateside. In October Rakuten acquired Ebates for $1 billion. The San Francisco-based e-commerce loyalty and affiliate site offers cash rebates to customers who buy products ranging from diamond studs to dishwashers from such retailers as Wal-Mart Stores Inc. Nordstrom Inc. and even Rakuten.com direct competitor Amazon.com.

“I’m not saying we are getting out of our original (e-commerce marketplace) business model,” Iida says. “But to scale business we need eBates in conjunction with our marketplace.” To support its U.S. growth plans, Rakuten also is building a U.S. headquarters in Silicon Valley in the next six months, Iida says.

In 2013 Ebates’ 2.5 million active members spent over $2.2 billion shopping through Ebates from over 2,600 retailers. Merchants pay Ebates each time a member makes a purchase, and Ebates then splits the commission with the shopper. Iida says the number of U.S. Ebates merchants now stands at 3,500 and that 2014 annual sales through the site will top $3 billion. He says Rakuten, No. 2 in Internet Retailer’s Asia 500, expects U.S. Ebates shoppers to spend more than $10 billion annually through the site within five years.

Rakuten’s most recent Q3 earnings report illustrate the impact of the Ebates acquisition. Sales in Japan on Rakuten’s platform grew 11.3% to reach 479.5 billion yen ($4.1 billion) from 430.8 billion a year earlier ($3.65 billion). Meanwhile, overseas gross merchandise sales on Rakuten’s global marketplaces grew 9.2% to reach 32 billion yen ($270 million) from 29.3 billion ($250 million) a year earlier. But revenue from just-acquired Ebates amounted to more than double that sales volume at 73.8 billion yen ($630 million). That helped Rakuten achieve a 27.2% Q3 year-over-year increase in total global e-commerce sales to 585.3 billion yen ($4.97 billion) from 460.14 billion yen ($3.90 billion).  

With its Ebates loyalty play, Rakuten is trying to replicate the success of Rakuten’s Japanese loyalty program called Super Points. In Japan, Rakuten is anchored around Rakuten Super Points, Seichu Mastada Kobayashi, managing executive officer and director of Rakuten, tells Internet Retailer.

“Japanese consumers are big fans of loyalty programs, which offer numerous ways to save as you spend, and can influence shopping habits,” he says. Rakuten Super points, which launched in 2003, enables shoppers to earn rewards points at the some 42,000 stores on the Rakuten Ichiba online shopping mall, as well as on the various services offered by Rakuten Group. For example, consumers can earn Super Points in bricks-and-mortar stores by using the Rakuten Card credit card and when they pay using using Rakuten Edy e-money, an online payment service similar to PayPal.

In October this year, Rakuten launched the R-Point Card Service in Japan, an offline extension of the Rakuten Super Points program which allows members to use their Rakuten Super Points for purchases in physical stores throughout Japan. When fully rolled out, the service will be available at approximately 12,600 stores nationwide, Kobayashi says.

Iida adds he hopes the Ebates model of earning cash back to spend at thousands of retailers across the web will resonate with U.S. shoppers more than many traditional loyalty programs that require shoppers stick with one retailer or brand.

“Our vision is to become a global marketplace where consumers can buy anything and everything from everywhere and where consumers will keep coming back,” he says.

And Rakuten’s plans don’t end with the U.S. The company has been keeping busy with global acquisitions to drive businesses throughout the world, says Iida, who has worked for Rakuten in several roles for nearly a decade.

The Viber app, which it bought for $900 million in February, paying $1 per user for its 900 million users across the globe, is a mobile messaging app similar to What’s App in the U.S. and is strong in Europe, Asia and Israel, Iida says.

Iida sees a “whole range of scenarios” for incorporating Viber into other parts of Rakuten’s ecosystem. “The key is we have access to millions and millions of mobile users,” he says. “In some countries people don’t even use a PC. We can reach more consumers via this messaging app—where they are coming online first.”

Mobile traffic is a big part of Rakuten’s business in some other markets. In Taiwan, for example, Rakuten says about 50% of Rakuten Taiwan Ichiba’s web site traffic came from mobile devices, in March 2014.

Rakuten has also invested in Internet services with the acquisition of global eReader and e-books platform Kobo, which offers 3.4 million titles in 68 languages, and with the purchase of Singapore-based video streaming service Viki in 2013 for $200 million.

Rakuten also wants to drive marketplace sales in Southeast Asia in countries like Thailand which it entered in 2009, Indonesia (2011), Malaysia (2012) and Singapore (at the start of 2014).

“Japanese products are popular among Asian countries, and we are trying to encourage cross-border shipping,” Iida says.

According to eMarketer, Asia-Pacific will become the leading region for e-commerce sales in 2015, representing 33.4% of the total global online sales, compared with 31.7% in North America and 24.6% Western Europe.

Rakuten is also at an advantage in Asia as shoppers across Asia are more similar to those in Japan than online consumers in the U.S., Iida says. “U.S. consumers prefer efficiencies,” Iida says. “If you go to Amazon.com and you know what you want you can buy it very easily. In Asia shoppers want the story behind the product and to discover the product, even if it’s toothpaste.” Hence, Rakuten’s tag line: Shopping is entertainment.

While shopping might be entertainment according to Rakuten, when it comes to its business, Rakuten is sticking with optimism.

“Our goal is to become the number one Internet services company in the world,” Kobayashi says. “This may sound ambitious, but Rakuten means optimistic in Japanese, and this is a goal we’ve got our hearts set on.”

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