Logistics beyond the click: the promise of fulfillment

France has a long tradition of seeing logistics as a minor and unrewarding task, epitomized by the famous quote attributed to Général De Gaulle: “L’intendance suivra”, meaning that the logistics will adapt to the strategy, and that its constraints should not be taken into account in the decision-making process. But regarding e-commerce, this could not be more wrong. And while this service may seem secondary with regards to what remains our core business at Rakuten’s — being an e-commerce marketplace — we believe, to the contrary, that it is in fact essential for us to deliver on our mission, and on our fundamental brand promise.

For small to medium-sized merchants that mostly run physical businesses, and that only recently decided to digitalize a part of their activity, such a fulfillment service is indispensable; because they are absolutely unable to manage the logistics that e-commerce requires beyond a certain volume. Everyone can build a merchant website, but what happens after the click?

Small merchants are not the only ones that absolutely need fulfillment services. Many B2C brands are increasingly selling directly to their customers, in complement to their traditional sales channels, through retailers. There is definitely a space for such direct sales to customers to develop — that match consumers’ aspirations to have a direct link with their favorite brands — but developing a direct B2C activity can be highly demanding: orders need to be fulfilled, and most brand owners have not been designed to do it themselves. Logistics are indispensable, and a trusted partner is necessary to deliver a great customer experience.

The problem is that so far, fulfillment services have been extraordinarily concentrated. Even more problematic: the dominant player for these fulfillment services, which was almost the only one to propose a full-fledged service covering all France, is also one of the largest e-commerce marketplaces. As a result, and due to different pricing mechanisms for external merchants and for its own platform, there was a distortion in competition which made it almost impossible for these merchants’ direct sales to be competitive.

At Rakuten, we have built our business on strong, trusting partnerships with the merchants that are part of our community. This trust is based on a simple fact: we never compete with the merchants that entrust us with their business! To the contrary, we support them in many ways, to help them grow through high-quality services, and to give them the best opportunities. During the pandemic in particular, when physical shops had to close down, we helped thousands of small merchants put a first foot in e-commerce. And, in general, we try really hard to empower them as much as possible. So, when we realized how hard it was for them to benefit from a fair fulfillment service, it was only natural for us to step in.

Last month, Rakuten France announced the launch of a new service: “Rakuten Fulfillment Network”, an order fulfillment service. For those not familiar with the specifics of e-commerce, ‘order fulfillment’ — or ‘fulfillment’ — is a comprehensive logistics service covering the collection, storage, packaging and shipping of electronic trade orders. Our fulfillment service has been designed around the same principles than the rest of our business:

• Inclusiveness: our fulfillment service is freely accessible to every player, regardless of the nature their activity.
• Fairness: our service is offered at the same price to all potential customers.
• Transparency: there are no hidden costs, no discrimination of any kind.
• Freedom of choice: our merchant partners can freely choose whether or not they want to rely on this fulfillment service.
•  Partnership: our service is built with, and delivered through a network of logistics companies, some of them small and local, other active on a larger scale.

By the way, these logistics partners with which we develop this service also greatly benefit from it: firstly, because we bring them additional business with new customers. But also because, in so doing, we help them digitalize their business; and this digitalization is indispensable for them to monetize under-used assets, such as warehouses that are structurally not full.

At Rakuten, we strongly believe that the way in which we do business is as important as the business itself. Whatever we do, we always follow the same guiding principles.

We rely on, and we support, local ecosystems, rather than destabilize them.

We connect the different players of our ecosystems (here, merchants and logisticians), and help them work together; and we simplify this part of the business, for everyone.

We operate in partnership with, not in competition with, our business counterparts.

We abide by our values of transparency, of simplicity, of fairness and inclusiveness. Strictly respecting these values is not secondary — no more than logistics are secondary to e-commerce.

And, last but not least, we are faithful to the objective at the core of our philosophy: to contribute to society by creating value through innovation and entrepreneurship.

This business that we are starting is the first of its kind in Europe. We are creating something new, and I am confident that it is what the market is expecting. Time will tell, and as always, we are optimistic!

Par Fabien Versavau, PDG de Rakuten France