Rakuten Betting Its Online Shopping on Drones

Rakuten kicked of its 2017 through celebrating a new world record for the longest delivery carried out by a drone by Autonomous Control Systems Laboratory its research partner.

A container of hot soup was flown by a drone over 7 miles to a beach where surfers were located.

Rakuten CEO Hiroshi Mikitani is expecting drones to revolutionize deliveries. He wrote in a blog post recently that the capacity in the skies above is much greater than that of the roads under our feet.

This week Rakuten, together with AirMap based in California, teamed up, to develop new technology to manage Japan’s drone traffic.

The two hope to allow the drones to operate autonomously at low altitudes. Amazon, a global rival, is making a big push into deliveries by drones.

Rakuten does not like being known as the answer in Japan to the U.S. e-commerce giant. With over 14,000 employees and last year revenue of over $6.8 billion, it is becoming a tech giant itself on the scale of Alibaba and Google.

Mikitani is so committed to becoming global that English became the company’s official language during 2010. That moved shocked Japan’s corporate world, sparking public criticism. A fellow CEO said the plan was stupid.

Close to seven years later, CFO Yoshihisa Yamada says Rakuten is open, diverse and dynamic.

Making the official language English helped Rakuten hire foreigners, a huge advantage given the aging population of Japan and its shrinking number of workers.

The end result is a company culture blending corporate traditions from Japan with the mindset of Silicon Valley, said Yamada.

Rakuten takes the high quality, very customer based service mind of Japan and mixes it with the dynamic culture and little bit techie of Silicon Valley, said the CFO.

The executive who criticized the plan of Mikitani to make English the company’s official language was Takanbu Ito the former CEO of Honda. A few years ago, the Japanese automaker said it would switch by 2020 to English as its official language.

Rakuten has been very well known throughout all of Japan, but is little known elsewhere.

In 2014, Rakuten acquired Viber the messaging app for $900 million and recently invested in a pair of startups Lyft and Pinterest. It is planning a push into the world of artificial intelligence and connected devices.

In 2016, to increase its standing globally, Rakuten signed a sponsorship deal of millions of dollars with FC Barcelona one of the most successful football (soccer) clubs in the world.

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