Relying solely on the five senses—sound, sight, smell, taste, and touch—appears to be insufficient in today’s technological world. For businesses to improve their visibility and management, technology is the only solution one can think of beyond the five senses. To help businesses observe, manage, and monitor strategies, marketing campaigns, and many other related technological needs, Rakuten SixthSense- a business unit of Rakuten India, which is a part of Japan-based conglomerate Rakuten Group comes into play.
Rakuten India’s revenue from operations increased by 18.08% to Rs 737.50 crore in FY23 from Rs 624.56 crore in FY22. The company’s net profit rose by 37.08% to Rs 86.09 crore in FY23 from Rs 62.80 crore in FY22, as per regulatory filings accessed by business intelligence platform, Tofler. In a conversation with BrandWagon Online, Amit Srivastava, vice president-sales and general manager, Rakuten SixthSense talks about the company’s focus on Business to Business (B2B) industry besides investing in newer technologies in this continuously evolving world, among others. (Edited Excerpts)
How does Rakuten SixthSense fit into Rakuten Group’s success, and how does it align with the conglomerate’s diverse portfolio of businesses?
SixthSense is a part of Rakuten Group’s B2B (business-to-business) initiative that we initiated about two and a half years ago. Rakuten Group is a fairly large conglomerate, with revenue close to about $18 billion globally. We are engaged in multiple different businesses, primarily focusing on B2C (business-to-consumer) space. E-commerce has been our primary business, and then we ventured into Fintech. So, we have a digital bank, insurance, and credit card services. In fact, we are the number one credit card issuer in Japan. We are also one of the leading payment systems. So, about one-third of our business is focused on banking and finance-related services. Additionally, about one-third of our business is in communication. We started our telecom operations, becoming a mobile operator in Japan. Just like Reliance Jio, we were the first to introduce 5G network services in the world. This segment includes not only telecommunication but also other communication products like Viber. Viber is a social media messenger platform, quite similar to WhatsApp, offering services like social media messaging, calling, and Voice over Internet Protocol (VoIP). Across the globe, we have a fairly large number of users, about 1.1 billion users using Viber worldwide. That sums up the overview of Rakuten Group.
We represent Rakuten India, which is the largest technology centre for the group. Rakuten India primarily focuses on developing software products and providing support to our group companies. As part of that, we own certain IPs, with observability being one of the areas we specialise in. Our observability solutions aim to monitor and manage Information Technology (IT) operations effectively and efficiently. We started this business about two and a half years back in September 2021.
How does your technology help businesses in their marketing strategies?
So, broadly speaking, any business operating today relies heavily on IT systems. It’s crucial to ensure that these systems, along with the applications it support, are consistently up and running smoothly. One aspect involves maintaining the integrity of IP applications and systems. However, equally important is ensuring the accuracy of data. For instance, imagine running a marketing campaign targeting specific user profiles or demographics. If the data used for this campaign isn’t up-to-date or available when needed, it could result in missed opportunities, such as losing the window to launch a sales event such as Singles’ Day for an e-commerce company.
This underscores the importance of having reliable and available data, which is an integral part of our observability strategy. Rakuten SixthSense addresses this by focusing on three main areas. Firstly, it monitors and provides insights into the application infrastructure and technical IT aspects, swiftly identifying and resolving any issues that arise. Secondly, it ensures the availability, reliability, and consistency of data, crucial for effective business operations and decision-making. If something does go wrong, it facilitates quick diagnosis and resolution.
Thirdly, SixthSense takes a proactive and predictive approach, leveraging AI capabilities to anticipate potential issues before they occur. By analysing signals and patterns, it helps businesses forecast and mitigate future challenges. This is made possible by advancements in AI, such as generative AI, LLMs, and transformers, which enable rapid understanding and interpretation of data.
Which sector holds the greatest significance for your company in terms of technological impact and business operations?
While we operate in the banking, finance, media, and telecommunications sectors, our focus extends beyond specific domains. The essence lies in understanding that IT is ubiquitous and essential across various industries, whether it’s manufacturing, pharmaceuticals, or banking. Disruptions in sectors like banking, media, e-commerce, and retail highlight the critical role of technology in driving business operations. For instance, banking operations heavily rely on functional applications for transactions and payments, while media and e-commerce businesses thrive on seamless application performance for user engagement and transactions. Each sector is important to us.
What strategies is the company employing to sustain its revenue growth momentum?
For the initial 25 years, Rakuten Group’s focus and growth initiatives were exclusively consumer-centric, with all services tailored for consumers. However, about two and a half years ago, we took a significant step by venturing into the B2B sector. Drawing upon the insights gained from operating in 70 diverse businesses over 25 years, we believe that our experiences could be applied to the B2B space. One key area of focus is observability, ensuring the efficiency of large-scale IT operations to deliver value to users. Our commitment to strengthening the B2B portfolio, particularly with Rakuten SixthSense, remains steadfast.
Looking ahead, our expansion strategy for Rakuten SixthSense is global in scope. We are actively investing to extend our reach globally, collaborating with existing customers and expanding our teams beyond India. The foundation for Rakuten SixthSense as a business is poised for significant expansion, fueled by our growing presence in the global market.
SixthSense is part of the Rakuten ecosystem. How does this affiliation benefit Indian business, and are there any plans to leverage Rakuten’s global reach?
Certainly, we are continuously seeking opportunities for expansion and enhancement of our offerings. We initially targeted India as a market due to the cultural and business similarities shared with Japan. Over the past few years, our focus has been on India, and we have made significant progress in this region. Now, we are directing our investments and attention towards the North American market. We believe that this market could benefit greatly from solutions like ours, especially given the ongoing challenge of finding innovative solutions at the right cost.
Regarding how Rakuten Group and its success contributed to this endeavour, it’s important to note that Rakuten Group represents a diverse business ecosystem. In India’s B2C space, we have a track record of pioneering innovations, such as our early ventures into payment solutions and digital banking. Leveraging our deep understanding of consumer businesses and customer needs, gained from our experiences in Japan and other markets, we aim to apply these insights to our operations in India.
While I’m not authorised to disclose specific details at the group level, I can say that Rakuten Group is continually evaluating opportunities to introduce its other offerings to the Indian market. Additionally, our ongoing investments in the startup ecosystem demonstrate Rakuten’s strong belief in the potential of the Indian market.
How does your company leverage AI and ML to help businesses drive better outcomes?
The entire Rakuten ecosystem revolves around its membership programme, wherein transactions across all 76 different businesses earn points in the Rakuten rewards ecosystem. Whether you’re purchasing items from our e-commerce site, recharging your mobile, paying utility bills, or booking tickets, every transaction contributes to Rakuten rewards. These points can be used across various services within the ecosystem. To facilitate this seamless experience, we maintain a common data ecosystem, ensuring efficient utilisation of data while complying with legal regulations.
Our supervisory teams, primarily based in Bengaluru , are instrumental in building data solutions for our businesses globally. This ensures that the data collected is utilised ethically and effectively to enhance services for our consumers. AI plays a significant role in this process. For instance, when a person makes a purchase, they may notice associated recommendations on their e-commerce site. We have delved deeper into this realm by developing a social graph and investing in AI-driven correlations. This allows us to offer personalised suggestions based on individual preferences and behaviours.
For instance, if you purchase a bed, you might also be interested in refurnishing your home or buying complementary items. By analysing patterns, we can suggest relevant services. AI is extensively utilised in building this social graph, image attribution, and semantic search capabilities.
Semantic search is particularly crucial for catering to the preferences of the younger generation, such as Gen-Z, who seek specific references rather than generic search terms. Additionally, linguistic diversity, especially in countries like India and Japan, necessitates voice-enabled interfaces tailored to various dialects and languages. AI plays a pivotal role in this area, and we are committed to investing heavily to ensure a seamless experience for our users.
What specific challenges do Indian businesses face with their technology stack? How does your company help them overcome those challenges?
We’re currently witnessing a surge in new technologies, from Gen AI to cloud services and microservices. Businesses are rapidly adopting these innovations, leading to the emergence of new infrastructures and data management systems. However, while these technologies offer immense potential, they also pose challenges in adapting and maintaining the tech effectively.
Despite the influx of new technology, IT budgets remain constrained, forcing businesses to allocate significant funds to maintaining existing systems rather than investing in innovation. To address this issue, we’re focused on providing efficient, full-stack observability solutions that empower businesses to optimise their monitoring processes. By proactively identifying and resolving issues, we enable organisations to reallocate resources from maintenance to innovation.
Additionally, we’re tackling data-related challenges that hinder business scalability and operational efficiency. Our solutions enable businesses to predict and prevent issues before they occur, leveraging AI technologies like cognitive AI to drive proactive and predictive maintenance strategies.