Business / Corporate

Rakuten faces backlash from cybermall tenants over free delivery plan

JIJI

Rakuten Inc.’s plans to scrap delivery fees for certain purchases on its shopping site are drawing harsh responses from tenants who complain the company’s move violates the antimonopoly law.

Some tenants at the Rakuten Ichiba cybermall plan to ask the Fair Trade Commission to investigate Rakuten’s move, alleging the company’s unilateral decision amounts to an abuse of its dominant position.

In January last year, Rakuten announced plans to introduce unified standards on delivery fees instead of allowing tenants to set them on their own.

In December, the company said purchases worth ¥3,980 or more, including tax, will be free of delivery fees, excluding those for frozen goods and some other items, starting March 18. For Okinawa Prefecture and remote islands, the threshold will be ¥9,800.

The introduction of free delivery is apparently designed to help Rakuten better compete with rivals such as Amazon.com.

“Fees and prices will become transparent, and there will be an increase in customers and customer traffic,” a Rakuten official said.

But tenants will be forced to pay for the costs of delivery. They complain that unless the costs are passed on to prices, there will be losses, but that customers will go away if prices are raised.

A Tokyo tenant that sells measuring tools currently makes purchases worth ¥8,800 or more free of delivery fees.

If the figure is lowered to ¥3,980, “our business will be unprofitable,” its 68-year-old president said. But the president says the company can’t stop using Rakuten because it relies on Rakuten Ichiba for 50 percent to 60 percent of sales.

Some tenants are preparing for collective talks with Rakuten to get the company to drop the free-of-charge delivery plans. About 300 tenants are ready to join the effort, sources familiar with the situation said.

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