FY2020 Second Quarter Consolidated Financial Results August 11, 2020 Rakuten, Inc. Consolidated Results 1 Q2/20 Results Highlights Consolidated revenue: +13.4% YoY Global GTV: +12.6% YoY Domestic E-Commerce GMS growth: +15.2% YoY －Shopping E-commerce GMS* growth +48.1% YoY GAAP OI: JPY 3.3bn due to sale of OverDrive － Non-GAAP OI: JPY -32.6bn due to mobile business and logistics investment Rakuten diversified ecosystem enabled solid growth －FinTech: Revenue growth +19.5% YoY, Non-GAAP OI +24.2% YoY －Businesses such as travel were negatively impacted by COVID-19, but showing gradual recovery Mobile business: Achieved 1mn applications * Shopping E-commerce = Ichiba + 1st party (Fashion, Books, Rakuten24 (Direct), Net super + Open EC(Rebates, Checkout) + Rakuma 2 Q2/20 Business Summary 1. Strong Business Growth Amidst the Pandemic 2. Investing to Capture EC Growth Opportunities -Change of consumer behavior -Logistics and quality improvement activity 3. Steady MNO customer acquisition 4. RCP (Rakuten Communications Platform) strategy 5. Strength of Rakuten Ecosystem 3 1. Strong Business Growth Amidst the Pandemic 4 Business Strategy for Future Growth Revenue +9.4% YoY ■Q2/20 Revenue / OI OI +1.2% YoY Core Businesses*1 (excl. Rakuten Travel) Revenue +15.1% YoY OI +19.8% YoY Growth Investment Phase Phase Businesses*2 Businesses*3 Revenue Revenue +64.7% YoY +27.2% YoY *1 Includes Ichiba, Travel, Rakuten Rewards (Ebates), Card, Bank, Life Insurance, etc *2 Includes C2C and 1st party businesses, etc *3 Includes investment in Rakuten mobile and logistics business, etc. 5 How Rakuten Captures Changing Consumer Behavior Changing consumer behavior Field Impact Ichiba: GMS↑/ Number of new and returning purchasers, Online Shopping orders↑ Shopping EC Q2/20 GMS: +48.1% YoY Securities: Q2/20 Rev+29.3% YoY/ OI+62.1% YoY Online Banking Life Style Stock, FX transactions↑ Cashless Pay ↑ ↑ Shift to online for Card: Credit Card Shopping GTV Share GTV Share social distancing Digital Rakuten TV: Active Users +3.9mm QoQ Entertainment Rakuten VIKI: Registered Users +3.7mm QoQ Online Education Rakuten Kobo: Revenue↑/ Registered Users +1.9mm QoQ Work Style Rakuten Mobile: Strong growth in online applications. Achieved 1mm applications Work From Home Mobile / 5G More data and Communication Style connectivity Increase in data consumption Rakuten Viber: Unique IDs +16.5mm QoQ Online group communication 6 Q2/20 COVID-19 Impact on Domestic EC Shopping E-commerce*GMS +48.1% YoY * Shopping E-commerce = Ichiba + 1st party (Fashion, Books, Rakuten24 (Direct), Net super + Open EC(Rebates, Checkout) + Rakuma 7 Shopping E-commerce*1 Purchasers Expand Strongly Q2/20 Q2/20 New Purchasers Returning Purchasers*2 +63.1% +80.9% YoY YoY *1 Shopping E-commerce = Ichiba + 1st party (Fashion, Books, Rakuten24 (Direct), Net super + Open EC(Rebates, Checkout) + Rakuma *2 Returning Purchasers: Purchasers who purchase after more than a year. 8 20% 10% * * Source: METI, Statistical survey of specified service, 15% 5% Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Rakuten Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Credit Card category. Company disclosure. Q3/15 Q4/15 Rapidly Expanding Card Shopping GTV Share Card Shopping Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Rakuten Q1/19 Q2/19 Company A Company Company B Company Q3/19 Q4/19 Card Q1/20 Q2/20 Shopping GTV Shopping in Credit Card Credit in No.1 9 Recent Milestones in FinTech Rakuten Card Rakuten Bank Rakuten Securities holders Accounts Accounts mm mm 20 9 4mm 4.4mm 2005 Jun/2020 2009 Jun/2020 2003 Mar/ Jun/ 2020 2020 10 Rakuten Group in a Strong Position to Capture Cashless Shopping GTV Growth Outperform the Market Rakuten Group: Strong Position to Capture Cashless (YoY) YoY Positive Rakuten Card Other Rakuten Services Total GTV* 0％ Credit Card 8.5 Industry trillion JPY YoY Negative Apr/20 May/20 Jun/20 *METI, Statistical survey of specified service, Credit Card category *METI, Point Reward Project for Consumers using Cashless Payment, GTV for Oct 1, 2019 ~Apr 13, 2020 11 2. Investing to Capture EC Growth Opportunities 12 Strategies for Capturing E-commerce Consumer Demand Goal ・Merchant Growth =Growth of Rakuten Ichiba Strategy ・Improve user convenience ・Enhance cost and ・Increase fulfilment center coverage operational efficiency Issue and efficiency of own delivery for merchants ・Expand logistics and last mile delivery ・Introduce uniform shipping to capture E-commerce demand for worry-free shopping growth under the pandemic experience ・Provide safe and reliable service to users ・Logistics support for Ichiba merchants 13 Expansion of Logistics Centers Chiba:Narashino Opened on June 15, 2020 Osaka:Hirakata Hyogo:Kawanishi, Amagasaki Kanagawa: Chuorinkan First half of 2021 Chiba: Ichikawa, Nagareyama Kanagawa: Sagamihara 14 Rakuten Super Logistics (RSL) contribution to Merchant’s GMS growth Q2/20 Average Monthly Merchants’ GMS YoY Reasons why RSL merchants can grow faster YoY difference +35.9 pt “Asuraku” Free up labor (Next day delivery) High quality Estimated delivery packaging time (Start end of 2020) Merchant average 70%+ of shipment “Matomete Haiso” from RSL Lower logistics cost (Send items in one box) (Planned) Merchants utilize Rakuten Super Logistics realize higher growth rate 15 Introduction of Uniform Shipping boosted Ichiba Growth Ichiba launched Uniform shipping for purchases over JPY 3,980 on March 18 Merchants including Users prefer to shipping fee (“39 purchase at “39 shops*”) GMS YoY Shops*” which drives Ichiba GMS grow strongly since growth it’s launch * “39 shops” = merchants including shipping fee above the threshold of 3,980 yen. In Japanese, “39” is pronounced as “Thank you.” 16 NPS*1 improvement vs Competition NPS improvement since Q3/18 (NPS absolute value) +9.9 points Company A Heavy users*2 NPS +0.03 points Light users NPS +6.7 points Company A Q3/18 Q2/20 -0.7 points *1 Net Promoter Score (NPS) Survey: Conducted by Rakuten through external panel *2 Heavy users of Rakuten include Diamond/Platinum rank. Heavy users of company A are paid members 17 3. Successful MNO Customer Acquisition 18 Accelerating Mobile Customer Acquisition Applications Exceeded 1 million Within 3 months of Launch Launch of Rakuten Mobile TV Commercial in July 83% of Japanese want mobile prices to be reduced*. Unlimited data and voice at half the industry price. No conditions. Japan’s mobile phone charges are too high No cancellation fee. * Calculate the opinions of smartphone users based on the data from the Consumer Affairs Agency “Results of a price monitor survey for January 2019 (preliminary report)”, 20 Base Station Buildout Ahead of Plan Target population coverage Jun/20 70% by March 2021 8,652 5,739 4,738 7,487 3,432 Accelerate deployment 5,739 Mar/20 Jun/20 Mar/21 Commitment to MIC Number of base stations on air 21 Rakuten UN-LIMIT User Satisfaction High Overall satisfaction 80.0% 20.0% Pricing plan simplicity 91.8% 8.2% Cost performance 89.2% 10.8% Flat rate data plan 85.4% 14.6% Communication speed 75.8% 24.2% Communication quality and stability 70.8% 29.2% Satisfied/Slightly satisfied Dissatisfied/Slightly dissatisfied * Source: MMD labo, June 2020 User survey after starting of “Rakuten UN-LIMIT” 22 Rakuten Mobile 5G Launch in Fall 2020 Efficient 5G roll out by software upgrade and antenna installation Development of 5G Core Agreement on joint development of Designated two R&D projects in the Stand Alone 5G core network with "Research and Development Project container technology for Enhancement of the bases for post-5G information and communication systems" 23 4. RCP (Rakuten Communications Platform) strategy 24 Next Generation Global 5G Leader Targeting the $1tn+ Mobile industry via Developed and Deployed World’s First Fully Virtualized Network Innovation Redefined how mobile telco networks are designed, built, operated “Rakuten…launched the first full- Significant reduction in CAPEX and OPEX due to virtualization, automation and scale virtualized network on April open architecture 8th… it may prove as momentous Traditional Site Deployment Rakuten Virtualized Site Deployment as Amazon’s launch in 2006 of its trailblazing cloud-computing Integrated RRH arm.” Economist April 8, 2020 Power + Antenna Power Board Rectifier & Battery GC Board DU BBU Rectifier & Cable & BBU Cabinet Antenna Battery RRU Jumper Rectifier & Battery AAU ～40% lower CAPEX ～30% lower OPEX RCP (Rakuten Communications Platform) Total Revenue of Network Cost of Mobile Operator Global Mobile Operators （% of Revenue） RAN Hardware & MEC Operation Core Network Software OPEX Reduction OpenRAN Open COTS based Automation & Innovation w/ ~-30% with RCP Architecture HW & SW MEC Design Operation by AI Open Core JPY 120Tn Cloud native compatible with Framework based on Optimal integration of edge, Innovative partnership with vRAN, separation of software standardized open hardware Adoption of automation and central DCs, and resources NEC on OpenCore and hardware, OpenRAN and software zero operation control architecture ~32％ Edge Data Center Central Data Center ~23% 4G LTE IP TransportIP OPEX RCP AUTOMATOR TransportIP RCP AUTOMATOR vDU vDU vDU vDU CU Front Haul Mid Haul CU vEPC FIBER FIBER vIMS - - Fiber UP Fibre Fiber CP Network Network CAPEX 5G mmWave RCP CLUSTER Internet RCP CLUSTER Operator Traditional RCP SUB-6 RU 2020 2024 Revenue NW Cost NW Cost Market Size JPY 30Tn-40Tn • Avoid lock-in by specific vendors • Quick adoption of additional services for network operation with marketplace type app store • Network optimization using AI as a basic function,