by Mark Chillingworth

CIO Profile:’s Francesco de Marchis plays the global game

Feb 26, 20125 mins
IT LeadershipIT StrategyRetail Industry

See also: CIO Profile: Francesco de Marchis’s technology roadmap

Cambridge has seen many leave its colleges and courts to seek adventure and tackle great feats.

Authors, scientists, economists and mathematicians alike have moved on from this corner of East Anglia to change the shape of the world we live in, and the University’s Scott Polar Research Institute bears the name and the spirit of one of Britain’s greatest adventurers.

On the outskirts of the city in Histon another group of pioneers are setting themselves the task of conquering the Amazon.

Being a Japanese-owned, British-born company they are too well mannered and cultured to talk so aggressively, but the leadership team at admit they are chasing the UK’s number-one online retail spot, which right now is occupied by American giant Amazon.

Their CIO, Francesco de Marchis, is a typical resident of this great city: he’s an Italian working on a big project that could have major ramifications not only in this green and pleasant land but far beyond.

Play, founded in Jersey in 1998, is currently the seventh largest online retailer in the UK.

In September 2011 it was acquired by the large Japanese online retailer Rakuten Group, and De Marchis says Rakuten’s mission, values and best practices for team management and IT integration are currently being adopted by its new UK arm.

Play’s Cambridge base, branded Web Works, is the operational centre from where IT, HR and finance all operate.

De Marchis is more than upbeat about Play post-acquisition as we meet.

“The Rakuten approach is usually not to change the organisational structure and they come and help you leverage their expertise.”

Play is the last and biggest of three acquisitions the Japanese company has made in Europe following buyouts in France and Germany.

“Play has the largest potential. Now they are investing a lot and they have an aggressive road map and the main thing is to change our business model to theirs. Play is a technology company, not just a retailer,” says De Marchis, who was involved in the buyout alongside the CEO and CFO.

In fact it was one of his first tasks upon joining Play.

One thing that impressed De Marchis about Rakuten was its modern outlook which he found different from many Japanese companies.

There are high-profile women in the management team, and all staff in Japan are fed at work on the firm.

In the UK Play pays for staff dinner once a month and on the day CIO visited the queue for the mobile fish and chip shop was certainly long.

A year ago Rakuten adopted English as its company-wide language of business and De Marchis is full of praise for the company’s ambitious culture, which includes global summits for its CIOs.

The challenge that Play and Rakuten face is a daunting one.

Amazon — as far-reaching as its geographic namesake — offers every breed of consumer goods you can think of and sustains a wide ecosystem of retailers and traders.

“It is no secret that Rakuten Group is aiming to become the number-one online retail company. Whoever is holding that space is a Rakuten target,” De Marchis says. He believes that now Play is part of a bigger food chain, it can challenge.

“We are now not alone in the big battle with Amazon. And for the customer the more competition there is, the better the service they will get.”

It won’t just be buyers that benefit, he says: as Play moves to the Rakuten model, goods and service providers will benefit and some are keen to see Play succeed.

“Music studios want Play to become a bigger player as they are worried about Apple and Amazon.”

The key for Play is to have a unique offering that will set them apart from Amazon, and De Marchis believes that the Rakuten model is that vital factor.

“Play is implementing the Rakuten Business Model. Hiroshi Mikitani, the chairman and CEO said in an interview: ‘We are more of an alliance-oriented company than Amazon. We want to establish relationships with retailers, rather than seeing one company dominating everything’.”

Competition has always been fierce, and successful business models are soon imitated.

De Marchis explains that from launch Play offered free delivery across the UK: something that Amazon soon copied.

“So we had to have a new structure and Rakuten came along at the right time. Their model is completely different from the marketplace that Amazon operates. We don’t compete with our sellers, we help them to be more profitable, which includes setting up a ‘university’ for them.

“We are building an ecosystem around a points system, not that different to Nectar. That ecosystem will make us more appealing to retailers and we already have big chains like Disney involved. This means that as a retailer you will not lose your identity in Play because what we are building is like a shopping mall.”

De Marchis is very passionate about this analogy and imagines the community of retailers that the Play mall will bring together, from global toy stores to an organic egg farmer who is already seeing success from his blog-style site on Play.

“A lot of retailers are unhappy with the aggressiveness of Amazon. We are trying to make shopping online more of a pleasure. On the technology side that means nice easy navigation,” he explains.

“The retailers will need to have their own logistics and then they will agree an SLA with Play. In Japan Rakuten removes shops that don’t comply, so there is a lot of effort pushed onto the shops themselves. But we are going to offer special deals for the distribution firms. We are also going to work with the high street to get out of this recession: our model is not just for the pure online retailer.