Rakuten.com

Rakuten.com was an online retail marketplace based in San Mateo, California. It began in 1997 as Buy.com, founded by Scott Blum, with an unusually aggressive low-price strategy focused initially on computers and electronics. Rather than relying only on product margins, the business sought additional revenue from advertising, warranties, equipment leasing and other ancillary services. During its first full year, Buy.com reported $125 million in sales of goods and services, a performance that was widely noted for exceeding the first-year sales record previously associated with Compaq. The company expanded beyond computers into software, books, movies, music, video games, sporting goods, apparel, footwear, health and beauty products, and other merchandise. Its growth was supported by substantial investment from SoftBank in 1998 and 1999. Buy.com completed an initial public offering on Nasdaq on February 8, 2000, pricing its shares at $13 and seeing them reach $37.50 during the first trading day. The company subsequently suffered from the collapse in technology and internet-company valuations, fell below Nasdaq's minimum share-price requirement, and was delisted. In 2001, founder Scott Blum reacquired the company for $23.6 million and returned it to private ownership. Buy.com continued to pursue scale through low prices, free shipping and a widening product catalog. In 2002, it publicly positioned itself against Amazon.com, including through a promotion promising books priced below Amazon's cost and free shipping without a minimum order. It also launched Buy.com Magazine, a consumer publication about computers and electronics that was later converted to a digital format. In 2008, Buy.com entered a major partnership with eBay and became one of the marketplace's largest sellers. Its own marketplace expanded from approximately 2.3 million listed products in 2007 to about 5 million in 2009. Rakuten acquired Buy.com in May 2010 for $250 million in cash. The acquisition gave the Japanese e-commerce group a U.S. entry point and access to Buy.com's reported customer base in the United States and Europe. On January 31, 2013, Buy.com was formally rebranded as Rakuten.com Shopping, commonly presented as Rakuten.com. The new marketplace emphasized individual merchants, customizable virtual storefronts, seller-controlled merchandising and direct communication between merchants and customers. Unlike earlier versions of Buy.com, the rebranded site was populated entirely by third-party merchants. Rakuten also pursued related U.S. e-commerce capabilities through its 2014 acquisition of Ebates.com, an online cashback and coupon service. Rakuten.com announced a partnership with Bitnet in 2015 to support bitcoin payments. Despite these initiatives, Rakuten discontinued its U.S. marketplace operation. In August 2020, customers were notified that Rakuten.com/shop would stop accepting orders on September 15, 2020. The marketplace is therefore a defunct brand and service, although Rakuten Group continues to operate other businesses and brands.

Buy.com was established in 1997 by Scott Blum as an internet retailer initially centered on computers and related equipment. Its business model relied on selling selected products at very low prices, sometimes below cost, while seeking revenue from advertising, warranties, equipment leasing and other services. The company broadened its assortment quickly and entered categories including software, books, films, music, games, sporting goods, apparel, footwear, and health and beauty products. In 1998 and 1999, Buy.com raised $120 million from SoftBank. The funding supported expansion before the company went public on Nasdaq in February 2000. Its offering was priced at $13 per share, and the stock reached $37.50 on its first day. The company later lost value during the downturn in internet and technology stocks, failed to maintain Nasdaq's minimum share price and was delisted. In February 2001, its U.K. operation was sold to John Lewis, which repurposed the underlying technology for a transactional website. In November of the same year, Blum reacquired Buy.com for $23.6 million and took the business private. The private company continued to compete through broad selection, low prices and shipping promotions. In 2002, it challenged Amazon's retail proposition with a campaign asserting that Buy.com could offer a better buying option, alongside a below-cost book offer and free shipping without a minimum purchase. Buy.com also introduced a quarterly magazine about computers and electronics; the publication later became digital. A second attempt to return to public markets was filed in 2005 but was ultimately withdrawn in 2007. Buy.com's marketplace scale grew substantially in the late 2000s. A 2008 agreement with eBay allowed the company to sell millions of products through eBay, making Buy.com one of that platform's largest sellers. Its marketplace product count increased from roughly 2.3 million in 2007 to approximately 5 million in 2009. Rakuten acquired Buy.com in May 2010 for $250 million in cash. The purchase was intended to help Rakuten develop a U.S. e-commerce presence and compete internationally with companies such as Amazon and eBay. Rakuten rebranded the business as Rakuten.com Shopping in January 2013. The revised marketplace placed greater emphasis on independent merchants, customizable storefronts, seller promotions and direct merchant-customer communication. Rakuten expanded its U.S. consumer-commerce strategy by acquiring Ebates.com in 2014 and by partnering with Bitnet in 2015 to support bitcoin payments. The U.S. marketplace did not achieve a lasting operating position, however. Rakuten announced in August 2020 that Rakuten.com/shop would stop taking orders on September 15, 2020. The marketplace subsequently became defunct.

• 2020

  U.S. marketplace closure

  [1]Rakuten.comen.wikipedia.org

  Rakuten.com/shop stopped taking orders on September 15, ending Rakuten's U.S. marketplace service.

• 2015

  Bitcoin payment partnership

  [1]Rakuten.comen.wikipedia.org

  Rakuten.com partnered with Bitnet to accept bitcoin as a payment option.

• 2014

  Ebates acquisition

  [1]Rakuten.comen.wikipedia.org

  Rakuten acquired cashback service Ebates.com, adding rebate and coupon capabilities to its U.S. strategy.

• 2013

  Rakuten.com rebrand

  [1]Rakuten.comen.wikipedia.org

  Buy.com Shopping was officially renamed Rakuten.com Shopping on January 31.

• 2010

  Rakuten acquisition

  [1]Rakuten.comen.wikipedia.org

  Rakuten acquired Buy.com for $250 million in cash.

• 2008

  Major eBay selling partnership

  [1]Rakuten.comen.wikipedia.org

  Buy.com began selling millions of items through eBay and became one of its largest sellers.

• 2002

  Expansion beyond electronics

  [1]Rakuten.comen.wikipedia.org

  Buy.com broadened its merchandise assortment and launched a consumer technology magazine.

• 2001

  Return to private ownership

  [1]Rakuten.comen.wikipedia.org

  Scott Blum reacquired Buy.com after its delisting and returned the company to private ownership.

• 2000

  Initial public offering

  [1]Rakuten.comen.wikipedia.org

  Buy.com completed its Nasdaq IPO on February 8, 2000.

• 1998

  First full-year sales milestone

  [1]Rakuten.comen.wikipedia.org

  Buy.com recorded $125 million in goods and services sales in its first full year of operation.

• 1997

  Buy.com is founded

  [1]Rakuten.comen.wikipedia.org

  Scott Blum founded Buy.com as an online retailer initially focused on computers and electronics.

A broad online marketplace built around aggressive pricing, convenience, free shipping, merchant storefronts and, after Rakuten's acquisition, a more seller-centric shopping experience.

• Online retail store · 1997

  Buy.com

  The original Buy.com retail operation sold computers and electronics at highly competitive prices before expanding into software, books, entertainment, games, sporting goods, clothing, footwear, health and beauty products, and general merchandise. Its commercial model combined product sales with advertising and service-related revenue.

• Online marketplace · 2013

  Rakuten.com Shopping

  The Rakuten-branded successor to Buy.com operated as a marketplace for individual merchants. Sellers could customize storefront layouts, images and promotions, while customers could browse merchant-specific shops and communicate directly with sellers. The service was part of Rakuten's attempt to establish a larger U.S. marketplace presence.

• Consumer technology publication · 2002

  Buy.com Magazine

  Buy.com Magazine was introduced as a quarterly publication covering new computers, electronic devices and related technology. It was distributed at substantial scale and later transitioned from a print-oriented format to an all-digital publication.

• 2013

  Allegations of fraudulent payment-card activity

  Users reported alleged unauthorized credit-card charges and claimed that personal information, including names, Social Security numbers and dates of birth, had been used to open accounts with other online vendors. Rakuten.com said it had taken substantial security measures and reported that a third-party forensic investigation found no wrongdoing by the company.

  Source

Read more

• 2002Better Buying Option campaign

  United States

  Buy.com used a full-page Wall Street Journal advertisement to tell Amazon customers that it could provide a better buying option. The campaign accompanied claims involving books priced below Amazon's cost and free shipping without a minimum order.

  Outcome. The campaign reinforced Buy.com's low-price and convenience positioning, although it did not displace Amazon as the leading U.S. online retailer.

  Source

• 2020

  Close the U.S. marketplaceStrategy

  Background

  Rakuten decided to discontinue the Rakuten.com/shop marketplace operation in the United States.

  Action taken

  Customers were informed that the service would stop accepting orders on September 15, 2020.

  Aftermath

  Rakuten.com became a defunct marketplace brand and no longer operated as a U.S. online shopping destination.

  Source

• 2015

  Introduce bitcoin payment capabilityProduct launch

  Background

  Rakuten.com explored alternative digital-payment infrastructure as part of its online-commerce strategy.

  Action taken

  The marketplace partnered with Bitnet to accept bitcoin as a payment method.

  Aftermath

  The partnership represented an experiment with cryptocurrency payments, but the marketplace was later shut down.

  Source

• 2013

  Rebrand and shift to a merchant marketplaceStrategy

  Background

  Rakuten wanted to align the acquired U.S. operation with its broader marketplace identity and differentiate it from a conventional retailer carrying its own inventory.

  Action taken

  Buy.com was renamed Rakuten.com Shopping, with the site focused entirely on individual merchants and customizable virtual storefronts.

  Aftermath

  The service adopted a more seller-centric identity, emphasizing merchant-controlled content, promotions and customer communication.

  Source

• 2010

  Acquire Buy.comM&A

  Background

  Rakuten sought a stronger foothold in the U.S. e-commerce market and an international platform that could complement its Japanese online retail business.

  Action taken

  Rakuten acquired Buy.com for $250 million in cash.

  Aftermath

  Buy.com became the foundation for Rakuten's U.S. marketplace effort and was later rebranded as Rakuten.com Shopping.

  Acquisition consideration. $250 million cash (May 2010)

  Source

1. 1Rakuten.comen.wikipedia.org