Rakuten Group(RKUNY) - 2019 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue increased by 13.3% year-on-year, reaching 306 billion yen, with expectations to exceed 20 trillion yen in Global GDP [27][31] - Operating income for the last three months was 32.6%, with non-GAAP at 3.2% [31] - Membership value increased by 21.3% year-on-year, currently at 5 trillion yen, with a target of 10 trillion yen [26][35] Business Line Data and Key Metrics Changes - Domestic EC (E-commerce) grew from 9.4% to 14.5% year-on-year [17] - FinTech saw explosive growth in new accounts, reaching 28 million accounts, with Rakuten Bank receiving about 4,000 new applications daily [21][22] - Rakuten Card achieved a growth rate of 26.5%, significantly outpacing the industry average of 10% [22] Market Data and Key Metrics Changes - Rakuten's brand recognition in Japan is number one, with a target of reaching 70% recognition in the U.S. by the end of the year [15] - The introduction of a new shipping charge threshold is expected to drive growth by approximately 15% [20] Company Strategy and Development Direction - The company is focusing on launching Rakuten Mobile with a three-step approach to ensure network stability [4][5] - Emphasis on creating an intelligent network platform through mobile edge computing, aiming to revolutionize the mobile network industry [11][12] - Plans to enhance branding and establish closer relationships with the fashion industry through initiatives like Rakuten Fashion Week [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the successful launch of Rakuten Mobile, which is expected to be a game-changer in the industry [6][7] - The company aims to leverage its existing membership value and expand its FinTech services to dominate the market [22][35] - Management highlighted the importance of data-driven services to compete effectively against major players like Google and Amazon [25] Other Important Information - Rakuten Medical is undergoing Phase III tests and has received the Sakigake Designation for its innovative products [14] - The company is expanding its logistics capabilities with new centers to improve delivery services [17] Q&A Session Summary Question: What are the expectations for the launch of Rakuten Mobile? - Management confirmed a three-step approach for the launch, focusing on stability and gradual scaling [4][5] Question: How is the company addressing the growth in FinTech? - Management highlighted the explosive growth in new accounts and the strategic importance of integrating banking services with credit and debit card offerings [21][22] Question: What are the future revenue targets for advertising? - The company aims to achieve 300 billion yen in advertising revenue by 2021, leveraging its data advantages [25]