in the U.S. we're used to Amazon's unquestionable dominance. Nearly 50 percent of e-commerce transactions in the United States take place on the platform, while the runner up eBay only holds about 6 percent of the market. But in Japan, it's a different story. Though the country is Amazon's second largest international market, here the e-commerce giant is locked in a tight competition for market share with homegrown Japanese company Rakuten.
2016 was the tipping point when actually Amazon started to finally take over market share. Last figures I saw was Amazon has about 25 percent market share and Rakuten is closer to 20 percent. A third player, Yahoo Japan, also holds about 9 percent of the market. Yahoo Japan launched in 1996, Rakuten launched in 1997, and Amazon entered the market in 2000. For years, Rakuten's knowledge of the local economy and wide suite of products helped it maintain its market lead. But recently, Amazon's focus on price and convenience, superior logistics capabilities, and fast shipping has propelled it into first.
Amazon Prime, I believe, in Japan is one of the cheapest in the whole world. And for that you get access to Amazon Prime Now, which can give you free delivery in two hours in certain areas of Japan, particularly in larger cities. Rakuten doesn't have a shipping service like Prime. And while it's working to build out its own shipping and fulfillment centers, right now these logistics are handled by third party companies. So some consumers are turning to Amazon for quicker and cheaper delivery, not to mention access to the vast amount of online content that a Prime subscription provides.
The layouts of the two sites are also very different. While Rakuten presents a busy front page with many links and featured products, Amazon's site is simpler and more targeted. Amazon is really built around search. So you go in there and you search for a specific product and those products will come up, whereas the Rakuten website allows you to browse through a variety of products, similar to the experience that you would have in a department store. The user interface on Amazon is quite good for very specific daily use products. Higher value items tend to be seen to be bought through Rakuten.
Analysts believe the platform's differences mean it's unlikely that either will dominate the market anytime soon. With its shopping mall model, Rakuten appeals to consumers used to traditional brick and mortar retail. Each seller has their own highly customizable landing page. Product descriptions are extensive, appealing to consumers who want to dig in and do their research. So if you're a Rakuten merchant, you can have your product page as long as you want. And some of these pages are more than 10 meters long. So Rakuten has for a long time said, we are the champion of freedom for the merchant, for them to communicate to consumers how they want. Whereas Amazon seems to stick to a very regimented way of displaying product information. Hart says Japanese consumers also appreciate the superior look of Rakuten's packaging. Japanese customers value receiving a nicely wrapped present for example, or something that's been handled with extreme care. And so for items such as birthday gifts, anniversary gifts, they may actually prefer to buy that through Rakuten.
In addition to e-commerce and fancy packaging, Rakuten offers a whole ecosystem of products and services referred to in Japan as the Rakuten World. And once a customer is absorbed into this world, the company's robust loyalty points program means they're highly incentivized to stick around. So they have about 100 million membership, of 130 million population in Japan. And we have a very very strong, the most popular point program in Japan. So that's our approach. Our membership and our reward program. Rakuten offers more discount points the more services you use. So they are the number one credit card in Japan. So if you use their credit card when you shop, you get additional discounts. If you use their mobile phone service, then you will get additional discounts on your shopping. And if you were to use their online security service, you would get additional discounts on their service. So they've created a bundling strategy to give value to consumers.
Rakuten operates the country's largest online bank, offers a streaming service that competes with Netflix, home-sharing that competes with Airbnb and owns messaging app Viber. The company is launching its own wireless network, and in a push for global recognition sponsors the Golden State Warriors and Barcelona Football Club. It expanded into the U.S. e-commerce market as well and acquired cashback site Ebates in 2014. You talk to a typical Japanese consumer in Japan, they may have six or so Rakuten apps on their phone. The strength of Rakuten is not what we're kind of a single service company, but we are providing various different values through our memberships. So I think that is going to be our strength. As for Yahoo Japan, it stays competitive as Japan's clear leader in consumer auctions, and its e-commerce wing has a partnership with Softbank, so mobile phone subscribers get discounts for using Yahoo Shopping. Alls to say, though Amazon leads the market for now, it can't take its position for granted. To keep up, the company has rolled out its own points based loyalty program. It also recently introduced Amazon Pay, a cashless payment service similar to what Rakuten and Yahoo already offer.
Both Rakuten and Yahoo have moved very aggressively into both credit cards and now cashless payments . Financial services would be the obvious thing that Amazon is not really doing at scale. As for Rakuten's future strategy, Matthew says he envisions the company continuing to build out its logistics capabilities, creating its own shipping and fulfillment centers to compete with Amazon. But ultimately, Hart doesn't believe that Rakuten should be too worried about Amazon's increasing presence in the country. I don't see within the foreseeable future that Rakuten is going to be massively disrupted by Amazon. They have a very deep understanding of the local consumer. I see more Amazon having to change to accommodate Rakuten's way of doing business in Japan than vice versa.
2016 was the tipping point when actually Amazon started to finally take over market share. Last figures I saw was Amazon has about 25 percent market share and Rakuten is closer to 20 percent. A third player, Yahoo Japan, also holds about 9 percent of the market. Yahoo Japan launched in 1996, Rakuten launched in 1997, and Amazon entered the market in 2000. For years, Rakuten's knowledge of the local economy and wide suite of products helped it maintain its market lead. But recently, Amazon's focus on price and convenience, superior logistics capabilities, and fast shipping has propelled it into first.
Amazon Prime, I believe, in Japan is one of the cheapest in the whole world. And for that you get access to Amazon Prime Now, which can give you free delivery in two hours in certain areas of Japan, particularly in larger cities. Rakuten doesn't have a shipping service like Prime. And while it's working to build out its own shipping and fulfillment centers, right now these logistics are handled by third party companies. So some consumers are turning to Amazon for quicker and cheaper delivery, not to mention access to the vast amount of online content that a Prime subscription provides.
The layouts of the two sites are also very different. While Rakuten presents a busy front page with many links and featured products, Amazon's site is simpler and more targeted. Amazon is really built around search. So you go in there and you search for a specific product and those products will come up, whereas the Rakuten website allows you to browse through a variety of products, similar to the experience that you would have in a department store. The user interface on Amazon is quite good for very specific daily use products. Higher value items tend to be seen to be bought through Rakuten.
Analysts believe the platform's differences mean it's unlikely that either will dominate the market anytime soon. With its shopping mall model, Rakuten appeals to consumers used to traditional brick and mortar retail. Each seller has their own highly customizable landing page. Product descriptions are extensive, appealing to consumers who want to dig in and do their research. So if you're a Rakuten merchant, you can have your product page as long as you want. And some of these pages are more than 10 meters long. So Rakuten has for a long time said, we are the champion of freedom for the merchant, for them to communicate to consumers how they want. Whereas Amazon seems to stick to a very regimented way of displaying product information. Hart says Japanese consumers also appreciate the superior look of Rakuten's packaging. Japanese customers value receiving a nicely wrapped present for example, or something that's been handled with extreme care. And so for items such as birthday gifts, anniversary gifts, they may actually prefer to buy that through Rakuten.
In addition to e-commerce and fancy packaging, Rakuten offers a whole ecosystem of products and services referred to in Japan as the Rakuten World. And once a customer is absorbed into this world, the company's robust loyalty points program means they're highly incentivized to stick around. So they have about 100 million membership, of 130 million population in Japan. And we have a very very strong, the most popular point program in Japan. So that's our approach. Our membership and our reward program. Rakuten offers more discount points the more services you use. So they are the number one credit card in Japan. So if you use their credit card when you shop, you get additional discounts. If you use their mobile phone service, then you will get additional discounts on your shopping. And if you were to use their online security service, you would get additional discounts on their service. So they've created a bundling strategy to give value to consumers.
Rakuten operates the country's largest online bank, offers a streaming service that competes with Netflix, home-sharing that competes with Airbnb and owns messaging app Viber. The company is launching its own wireless network, and in a push for global recognition sponsors the Golden State Warriors and Barcelona Football Club. It expanded into the U.S. e-commerce market as well and acquired cashback site Ebates in 2014. You talk to a typical Japanese consumer in Japan, they may have six or so Rakuten apps on their phone. The strength of Rakuten is not what we're kind of a single service company, but we are providing various different values through our memberships. So I think that is going to be our strength. As for Yahoo Japan, it stays competitive as Japan's clear leader in consumer auctions, and its e-commerce wing has a partnership with Softbank, so mobile phone subscribers get discounts for using Yahoo Shopping. Alls to say, though Amazon leads the market for now, it can't take its position for granted. To keep up, the company has rolled out its own points based loyalty program. It also recently introduced Amazon Pay, a cashless payment service similar to what Rakuten and Yahoo already offer.
Both Rakuten and Yahoo have moved very aggressively into both credit cards and now cashless payments . Financial services would be the obvious thing that Amazon is not really doing at scale. As for Rakuten's future strategy, Matthew says he envisions the company continuing to build out its logistics capabilities, creating its own shipping and fulfillment centers to compete with Amazon. But ultimately, Hart doesn't believe that Rakuten should be too worried about Amazon's increasing presence in the country. I don't see within the foreseeable future that Rakuten is going to be massively disrupted by Amazon. They have a very deep understanding of the local consumer. I see more Amazon having to change to accommodate Rakuten's way of doing business in Japan than vice versa.
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