How Rakuten Built a Tech Empire by Breaking the Rules

0:02 If you think about the human brain versus internet network.

0:07 Not all of what we do can be replaced by AI.

0:12 He’s thinking about the future.

0:15 And that’s no surprise.

0:17 He built Rakuten by betting on it long before others did.

0:22 Everybody thought internet is going to be popular,

0:24 but nobody will make any money from it,

0:26 but I thought, it's just a matter of time.

0:28 But his boldest gamble wasn’t about technology, it was cultural.

0:32 You ordered your Rakuten employees to switch to English or face demotion.

0:40 Was a bit aggressive In Japan’s corporate world, the move was revolutionary.

0:45 So, you're seeing the real payback coming?

0:47 Big time.

1:02 "Happy New Year" Mickey Mikitani has led Rakuten

1:07 since founding the company nearly three decades ago.

1:11 At the start of every new year,

1:13 Rakuten executives from around the world gather at its

1:17 Tokyo headquarters for the annual gathering known as the Asakai.

1:21 It’s a moment to reflect on the business

1:23 and set the strategy for the year ahead.

1:28 And it all begins here—inside this red

1:32 brick building—where the multi-billion-dollar company first took shape.

1:37 Just steps away stands the Atago Shrine.

1:40 Every year, Mikitani and his leadership team climb

1:44 its 86 stone steps— known as the “steps

1:48 to success.” It’s a tradition that has come to define how he starts the year.

1:54 The first very, very small office happened to be in front

1:58 of this shrine and so we started to come here.

2:02 At that time, this shrine was not that popular for a new year's ceremony.

2:07 But now so many people, because, you know,

2:10 they have seen the growth of Rakuten group, I think.

2:13 So, this has always been a yearly tradition for you?

2:15 Exactly.

2:16 Make it sure that we make the approach for the year.

2:20 And you want to kick it off on a good start.

2:21 Exactly.

2:22 Start off on a good note.

2:24 Yeah, refresh yourself and you know, fresh start.

2:28 The ritual ends with a group photo.

2:31 And then, the media scrum…where Mikitani now stands

2:35 as one of Japan’s most influential business voices.

2:39 But rewind more than two decades, and the picture looked very different.

2:44 When he first launched Rakuten Ichiba,

2:46 few believed the internet could build a real business At that time,

2:51 many people were not so convinced internet business

2:54 is going to be very profitable, very big.

2:56 But I was convinced that eventually it was going to come.

2:59 So, I thought about many different businesses,

3:02 and I decided to go for B to B to C marketplace.

3:06 At that time, what we call internet shopping mall,

3:09 was not really considered as a successful business model.

3:13 Almost all the internet shopping mall were failing, but we had a different idea.

3:19 Your different idea was to focus on small merchants.

3:24 What was the response from these small merchants, these small businesses?

3:27 Well, nobody was actually really buying so much from the internet.

3:31 So, it was really, really difficult to convince them to join a platform.

3:35 Some of the merchants even didn't have a personal computer,

3:39 they didn't have internet access.

3:41 It sounded like you have to educate them?

3:43 We went to this electronic shop with the merchants, buy a personal computer,

3:49 bought a digital camera, and we told everything to them.

3:52 It was fun, but it was very difficult.

3:55 Japan in the late 90s wasn't exactly

3:58 known for digital risk taking, or online ventures.

4:02 Did you ever worry you were building something that the market wasn't ready for?

4:06 Everybody thought internet is going to be popular but nobody

4:09 will make any money from internet business at that time.

4:12 But I thought, you know, it's just matter of time.

4:16 And he was right.

4:18 More than two decades later,

4:20 Rakuten Ichiba remains the company’s biggest revenue driver.

4:24 But competition is intense, from Amazon Japan and Yahoo!

4:28 Japan Shopping.

4:29 To stay ahead, Rakuten built an ecosystem,

4:33 rewarding customers with loyalty points across its services,

4:36 from credit cards to travel and mobile.

4:39 Is there anything out there that could

4:41 pose a threat to your E-commerce business?

4:44 No, I think it's kind of proven.

4:46 Of course, we have very serious competitors,

4:49 but it's a very, very different service.

4:51 So, we are an aggregation of 60,000

4:55 entrepreneurs selling many different kinds of product.

4:58 Of course, some are the big companies.

5:00 So, the approach is totally different.

5:01 We focus on recreating a very good experience for the people, again,

5:08 who are interested in not only buying product,

5:11 but wanted to have a very good experience.

5:14 You did something that seemed

5:16 a cultural revolution in traditional corporate Japan.

5:19 You ordered your Rakuten employees to switch

5:23 to English within two years or face demotion.

5:28 Was a bit aggressive It was very aggressive.

5:31 What prompted the move?

5:32 Internet is global competition in this connected world.

5:38 So sooner or later, we will face international competition,

5:42 domestically and outside of Japan too.

5:45 So, we have to benchmark our global competitors, not our domestic competitors,

5:49 and we have to learn from best practices from all over the world.

5:54 The second, is how to secure talented engineers and just

5:59 hiring the pool from Japanese engineers is quantitatively not big enough.

6:04 For example, now, 70% of engineers we hire in Japan are non-Japanese.

6:09 Most of them do not speak Japanese.

6:12 And then, you know, I just want to make

6:15 it sure that everybody can communicate with one single language.

6:17 We cannot do with Japanese, we cannot do with Chinese.

6:20 It has to be English.

6:21 How painful was the process making English the company's official language?

6:26 Did you receive any opposition?

6:28 Did people think you were crazy at first?

6:30 It took much longer than two years to be very honest.

6:34 We adjusted our deadline several times and helped

6:38 the people who are struggling as much as we can.

6:42 For example, at the very end, I told them, you know, in the morning,

6:46 they can come to office and just study

6:48 English and can start working from after lunch.

6:51 We helped them to go to some English schools,

6:54 and almost every single person cleared our target goal for standard test.

7:00 So, you're seeing the real payback coming Big time.

7:04 Mikitani’s next big bet was telecom.

7:07 In 2019, he launched Rakuten Mobile,

7:10 rolling out full-scale service just a year later.

7:14 But instead of building a conventional network, Rakuten tore up the playbook,

7:19 creating the world’s first fully virtualized,

7:22 cloud-native mobile system, deployed at a national scale.

7:27 It was a huge risk you took.

7:29 No one has ever done this.

7:31 There were performance issues at the start.

7:34 You faced huge criticism from your investors.

7:37 Your mobile business suffered through years of losses,

7:41 but you stuck to your guns.

7:42 Why?

7:43 Well, it has been always like

7:45 that, from the day when we started E-commerce business,

7:47 when we bought our online travel agent, when we started credit card,

7:51 even the introduction of the point program to the internet.

7:55 Everybody has been always skeptical.

7:58 You had the gut feeling.

7:59 I had a gut feeling.

8:00 Of course, You could pull it off.

8:02 Not only gut feeling, I had a scientific proof in the lab that it works.

8:08 And many people say, even if it's a work on a lab,

8:11 if you go to the real world, it is not going to work.

8:13 But I say, no-no-no-no, it's going to work.

8:15 It's going to work.

8:16 Maybe it's going to be a little bit lower performance at the beginning,

8:20 but you know, we can improve it.

8:22 Now our network performance is way better than our competitors.

8:26 Five years after its 2020 launch,

8:30 Rakuten Mobile is reaching an inflection point.

8:35 In December 2025, it crossed 10 million subscribers.

8:40 A major milestone in Japan’s fiercely competitive telecom market.

8:44 But the company still trails industry

8:47 giants like NTT Docomo, KDDI, and SoftBank.

8:50 Still, the heavy investment is starting to pay off.

8:54 In 2025, the mobile unit delivered its first full-year EBITDA profit,

8:59 a key milestone in its operating performance.

9:02 And as Rakuten looks ahead,

9:05 Mikitani is turning to the next frontier: artificial intelligence.

9:09 Though he’s not convinced it will replace every job.

9:12 If you think about the human brain versus internet network,

9:17 the human brain has 8 billion brain cells,

9:21 connect with 2 trillion synapse network, and it's digital.

9:26 Obviously, if you think about how many computers are connected,

9:30 how many semiconductors are connected to the internet, it's billions.

9:35 So eventually it should make sense that not all

9:40 of what we do can be replaced by AI.

9:44 But I think I'm not a 100% full believer AI will be able to replace what we do.

9:50 Maybe they can do 90% of what we do.

9:54 Sometimes 90% is good enough.

9:56 To what extent will AI also make a big transformation on your bottom line?

10:00 My bottom line is huge.

10:01 If you think about, already we have achieved

10:04 10% operational efficiency improvement utilizing AI last year.

10:07 We're going to do 10% next year.

10:09 But if you can improve our operation efficiency by 20%,

10:13 marketing efficiency by 20%,

10:14 I think we will be able to maybe increase our profit by 50, 60%, easily.

10:22 Mikitani didn’t just build a Japanese tech company— he

10:25 set out to turn Rakuten into a global brand.

10:28 And one of his most unconventional strategies was sport.

10:32 It started at home— with baseball’s Tohoku Rakuten Golden Eagles.

10:38 Then expanded into football with Vissel Kobe.

10:42 Before going global— with FC Barcelona and the NBA’s Golden State Warriors.

10:47 Well, I think sports is very important thing for the community.

10:53 It's like a drama without scenario, right?

10:56 It's like drama without a scenario.

10:58 Yeah.

10:59 It will bring emotion, sometimes bring people together.

11:02 So, I think if you can use sports to represent our philosophy.

11:07 So we are very picky about who we, you know partner with.

11:11 It's obviously very efficient marketing to get recognition of our brand,

11:16 domestically and globally.

11:17 Do these high-profile sports brands give you the, the visibility,

11:21 the global visibility, Of course That Rakuten needs?

11:24 Yeah, yeah.

11:25 Many people recognize Rakuten because of their past Barcelona sponsorship,

11:30 Golden State Warriors, main sponsor.

11:32 All these people in the Silicon Valley,

11:34 they recognize us because they always came

11:37 to the Chase Center and they see Rakuten everywhere.

11:41 You've been called a disrupter.

11:43 You've been called a contrarian.

11:45 Some even call you a maverick.

11:48 It sounds like you enjoy being a troublemaker,

11:51 and you really like to shake things up.

11:54 No.

11:54 Is that true?

11:55 No.

11:55 No,no,no,no.

11:56 I don't think so.

11:58 I do not hesitate to go against conventional wisdom.

12:02 Even if there is some kind of negative

12:05 reaction to whatever we do, whatever we say,

12:10 you know, if we believe we have a justice, you know, we are not going to be shy.

12:15 You know, I've been doing some digging and talking to people.

12:18 Is it true that Hiroshi Mikatani is the sort of person where,

12:21 if you tell him not to do it, he will go ahead and do it anyway?

12:26 I don't think so.

12:27 No?

12:28 No,no,no,no.

12:29 For example, the mobile business,

12:31 I had a chance to get into a mobile business several times in the past,

12:38 but I discussed with many people, and then we passed.

12:41 As a visionary and founder and entrepreneur

12:44 of over 70 businesses within Rakuten Group,

12:47 how exactly do you lead your 30,000 employees?

12:51 It's the job of the leader is basically, stick the flag.

12:57 Okay, this is what we want to do, business-wise and also socially.

13:01 So that social mission is number one priority.

13:04 What about making money?

13:05 Making money is a means to do it.

13:07 It’s not the ultimate objective for you?

13:09 No, no, no, not for me.

13:12 For shareholders, yes, and I work for shareholders, so I have to do it.

13:18 But obviously you need to make a continuous investment.

13:21 If you just want to maximize our short-term profit today,

13:25 I can do it immediately, right?

13:27 Not invest in the future, maybe we can double our profit easily.

13:31 But that's not good.

13:32 So, what do you tell your shareholders?

13:34 Wait, wait, the payback is coming?

13:36 Don't know, it's already coming.

13:37 The value is going up.

13:39 If you think about total market cap, including debt,

13:43 I think it's way over when we started Rakuten Mobile business.

13:48 People who believe in it, believe in it.

13:51 People who want to have a short-term profit, maybe they should buy other shares.

13:54 What inspires you, what drives you?

13:56 I really believe again, the power of entrepreneurs.

14:01 Japan has an institutional power, but not enough entrepreneur power.

14:07 So, the goal is to really prove a Japanese

14:13 entrepreneur company can become a globally respected company.

14:18 If you can achieve this goal,

14:20 that's going to have a huge influence into the Japanese people.

14:23 And where do you see the future of Rakuten?

14:25 Where do you see the company 10 years from now?

14:27 So Rakuten is going to be the new generation leader of Japanese private sector.

14:35 Give the money back to the society, but we're going to keep growing.

14:39 If you think about the growth of Japanese GDP in US databases,

14:44 we are negative for last 20 years.

14:48 Despite the fact that we are making best car,

14:52 best cameras, best mini manufacturing machines,

14:55 very good pharmaceutical product.

14:57 Why is that?

14:58 It doesn't make sense.

15:00 So, I hope we will be able to change the direction.

15:04 Miki San, thank you so much for talking to me.

15:06 Thank you, thank you very much.