1. Tsutaya.vs. Rakuten M-Commerce: Leveraging Retail Sales through the Mobile Platform May Su Aung – msaung@iuj.ac.jpmsaung@iuj.ac.jp Bryan Copeland – bcpld@iuj.ac.jpbcpld@iuj.ac.jp

2. TSUTAYA: Profile Net Sales: 3,043 million ¥ Ordinary Income: 579 million ¥ Net Income: 436 million ¥ * TOL – Tsutaya Online ** Estimated, year ended March-to-March, 2006 fiscal year; based on $1 = ¥132.06 Corporate Headquarters Tokyo Established1983 (TOL - 1999) Employees/TOL * 100 Subscribers/TOL * 18.55 million Wireless technology i-Mode Movie Mail, TOL (mobile) LinkShare Parent companyCulture Convenience Club Ltd (CCC includes Tsutaya and TOL)

3. Approach to Mobility How does Tsutaya do it? In 1994, CCC built a sizeable customer database Maintain a dynamic, always-on picture of individual entertainment tastes and preferences and personalize product offerings by combining data with mobility via i- Mode service. How does it all work for the consumer? TOL*, Tsutaya’s wireless i-Mode site, email consumer whenever the next release of the brand which consumer bought last time is available (or notify about clearance sales) *Case Study -- Tsutaya, a Tokyo Video Store, Goes Mobile: http://www.cioinsight.com/c/a/Past-News/Case-Study-Tsutaya-a-Tokyo-Video-Store-Goes-Mobile/

4. Business Strategy Store Development Strategy Bringing the 3000-Store Vision to Reality –The market radius for its retail locations: a 10 minute customer destination –They envision the potential to develop and open 3,000 stores in Japan by assuming that one TSUTAYA location exists for every 40,000 citizens.

5. Enhanced IT to Support Store Operations The CCC has developed a number of information technologies (IT) –To support operations, including the (AMS) –To analyze daily and hourly product movement at each store –To execute rental product orders at franchise headquarters on behalf of franchisees. The CCC connected all stores to franchise headquarters with a knowledge-sharing system called TSUTAYA NAVI, an IT platform for creating & sharing insights to support the resolution of store operating concerns.

6. Clicks & Mortar (C & M) To generate synergies between physical TSUTAYA in-store services and the Internet entertainment portal (TOL). Provide a Marketing function: TSUTAYA online, retail customers and TSUTAYA stores are directly connected via Internet. This connection, both pinpointed and immediate, provides a marketing function that other companies do not possess.

7. Monthly Sales & Membership

8. Member Growth (Customer Acquisition Strategy) 60% of 19-year-olds in Japan are "active Tsutaya members”

9. Market Share (FY2005) Share % in parentheses: Unit billion yen

10. RAKUTEN – Profile Corporate Headquarters Roppongi Hills, Tokyo Year founded1997 (RA - 2003) Employees/RA200 Subscribers/RA17.3 Million * Wireless technology i-Mode (DoCoMo partnership) EZWeb, Yahoo! Rakuten Auctions, Portal shops Parent companyIndependent Net Sales: 33,636 million ¥** Ordinary Income: 6,937 million ¥** Net Income: 3,731 million ¥** * ALL Raktuen Divisions ** ALL Rakuten Divisions; Estimated, year ended March-to-March, 2006 fiscal year; based on $1 = ¥132.06

11. Rakuten – Mobile Strategy Eyeing mobile auction market Partnership with NTT DoCoMo on RakuokuRakuoku Spin-off of Rakuten Auctions on the Mobile DoCoMo has a 40% stake (4.2 billion 円 ) Case Analysis – Rakuten Ichiba: http://www.slideshare.net/icestorm/case-analysis-rakuten-ichiba-presentation

12. Rakuten – Mobile Storefront

13. Rakuten – Financial Highlights Travel Bookings via Mobile Phone

14. Rakuten – Business Model

15. Rakuten – Operating Margin

16. Rakuten – Mobile Future Pushing Rakuten Auctions on the Mobile Tie-up talks with Tokyo Broadcasting Systems, Inc. (TBS); Internet TV negotiations M-commerce, focused on: –Recommendation technology –Captivating Contents –Product-placements –Ad Relevancy –Increased Auction traffic/sales