Joshua Wright comments

I work on the IT industry and have some interesting insights: Here is the thing, Amazon has been trying to push its Prime to sellers for many years as well. Prime equals free shipping for customers. It worked pretty well and the majority of the customers on Amazon are happy with it, even with higher prices. Rakuten needs to follow the same path for market growth or it will slowly lose to Amazon which the Rakuten president is realizing. Eventually the end consumer (me and you) is bearing the higher prices as every product will have the shipping fees included. It works for most items for sure. What the merchants are complaining about is that the order value for each customer will drop significantly because customers don't have to reach a certain amount anymore to get free shipping, let's say 20,000 jpy. They will just buy what they need and checkout. This is good for Rakuten as the checkout rate will increase but for the merchants the order value will drop. Also when consumers buy from Amazon they are looking for something specific. There is no relation between the merchants on Amazon and the customers think they are buying directly from Amazon not realizing that many items are from smaller merchants. Rakuten on the other hand is a mall with many stores within, customers visit these stores and checkout within. Stores have direct customer relation and can market the customer directly for retention. The merchants complaining are probably the ones selling in a high density market with 10k SKUs or more where every yen is fought for. Adding the shipping costs to the product is going to make the market very nasty. Sellers on the higher end or niche market will simply add the costs and move on.