Excellent Development of Internet Services-Sector of Rakuten
In domestic e-commerce services, the mainstay of Internet services, the Rakuten Group is aiming for further growth in gross merchandise sales and revenue by working on various initiatives, including sales promotion activities to cultivate loyal customers and win new customers, promotion of cross-use of services, promotion of the introduction of a common free shipping (shipping included) threshold and further opening up the Rakuten Ecosystem. Services such as the Internet shopping mall “Rakuten Ichiba” and “Rakuten 24”, which sells medical supplies and daily necessities, etc. by online shopping, have continued to see further growth in transaction volume even compared with the previous fiscal year when the Rakuten Group benefited from the effects of the COVID-19 pandemic which gave a boost to the businesses. This was because these measures successfully led to the retention of customers who began using the services against the backdrop of increased demand for online shopping following the growth in “stay-at-home consumption”. In the online travel booking service, Rakuten Travel, despite a decrease in transaction volume due to the impact of the continued temporary suspension of the "Go To Travel" program caused by the re-emergence of COVID-19, the gross merchandise sales in domestic e-commerce services exceeded ¥5 trillion in the fiscal year ended December 31, 2021. In other Internet services including overseas Internet services, continuous measures to improve cost efficiency and recovery of consumer behavior helped improve the performance of businesses that have been affected by the pandemic. In addition, the Rakuten Group recorded ¥27,827 million in valuation gains on securities related to investments in FinTech-related companies in the investment business. The Company has completed the succession of all but part of the rights and obligations in connection with its logistics business to JP Rakuten Logistics, Inc., a joint venture with Japan Post Co., Ltd., which became an associate of the Company accounted for using the equity method in the third quarter ended September 30, 2021. Accordingly, part of income (losses) of the logistics business, which was recorded in the Internet Services segment until the second quarter ended June 30, 2021, is recorded in share of income (losses) of investments in associates and joint ventures from the third quarter ended September 30, 2021. As a result, revenue for the Internet Services segment rose to ¥1,003,382 million, a 14.7% year-on-year increase, while segment profit stood at ¥107,548 million, a 166.2% year-on-year increase.
(Millions of Yen)
Fiscal Year 2020 Fiscal Year 2021 Amount Change YoY % Change YoY
Segment revenue 874,806 1,003,382 128,576 14.7%
Segment profit 40,396 107,548 67,152 166.2%
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