Good afternoon, and thank you for waiting, and welcome to Rakuten's first quarter financial results meeting. Due to the COVID-19 pandemic, we decided to have this meeting for both media investors and analysts as a countermeasure against the COVID-19. I hope that you would kindly understand the situation. At 15:00, the short financial results were disclosed. You can check the file with presentation documents from our corporate site page for investors. Now, what I'm going to do is speak up first. Hiroshi Mikitani.
Yes.
Good afternoon. Kenji Hirose.
Masayuki Hosaka.
Yoshihisa Yamada.
Tareq Amin.
Hyakuno Kentaro.
Yasufumi H irai.
Makoto Arima.
Kazunori Takeda.
Hiroshi Takasawa
Koichi Nakamura.
Komori Noriaki.
Noriaki Komori.
These 12 executives will be present for their presentations, so please first take a look at the video clip.
Every Monday morning, over 14,000 Rakuten employees in Japan come together for a conference called Asakai.
Good morning, everyone, and welcome to Asakai.
As part of countermeasures for the coronavirus, Asakai has shifted completely online.
Marketing services.
Even under the current environment, Rakuten's domestic and global businesses and offices continue to perform strongly.
The coverage looks very good. Performance is excellent.
We are working on the action items, and the result number of purchases is growing so significantly.
What we decided in terms of strategy has been transforming the cinema at home into a relief tool.
Because India runs 24 by 7 as a service for over 25-30 different Rakuten global businesses, we had to make sure that the soft-knock, fraud and app services monitoring, which are going to be done 100% from home, is very, very seamless.
In a panic.
Miki also shared global trends and insights, as well as allotting time for employees to directly ask him questions.
I think Rakuten Mobile is one of the most.
Solar. Round.
Various initiatives are held regularly to promote the physical and mental well-being of employees, such as stretch sessions.
Next, Takuya right.
As well as tips from employees on homeschooling. In addition to Asakai, Rakuten initiated an online training program for its 750 new employees that includes a 30-minute session on the company's philosophy with Miki every day. Rakuten means optimism in Japanese. With challenge comes opportunity. Rakuten, with its employees from diverse backgrounds and desire to empower people and society through innovation, will continue to work together towards a brighter future.
Let's do it.
Now, first, I'd like to invite Mr. Mikitani to give us their considered results.
Now, under the coronavirus pandemic, we decided to hold the meeting in such a way. Therefore, I'm speaking to you from my home. You've just seen the video clip. That's how we are working in a company. We're having quite proactive in promoting social distancing and work from home. In fact, that has advanced to a great extent to achieve about 97% work from home. We have seen progress in the financial department as well. Now, I'd like to move on to Q1 highlights. Consolidated revenue was up 18.2% year-on-year. Global GTV was up 23.7% year-on-year. Especially, I'd like to highlight the domestic e-commerce GMS growth. Compared to Q4 2019, we are seeing accelerated growth, 9.8% up.
For April, there will be explanation later on, but shopping e-commerce GMS growth was up 57.5% year-on-year. On the other hand, mobile business and logistics businesses are the areas that we made investment actively, and as a result, the non-GAAP operating income or loss, actually, that was operating loss recorded JPY 18.1 billion in Q1. At first, we realized that our strength has to do with the diversified ecosystem. For instance, we saw the fintech revenue growth of 22.9% and non-GAAP operating income up 14.7%. Core business revenue growth was 13.8% year-on-year, except for travel. The sector that is hugely impacted by COVID-19, for such area, we are reallocating people to other growing sectors. For mild patients as well as asymptomatic patients, we are offering accommodations using resources available from the travel sector. Thereby, continue to support society in such a way.
For mobile business, we finally launched service on April the 8th. We are seeing the acceleration of base station build-out. This is going to be elaborated later on. Now, moving on to the next page. As I explained earlier, in the case of the group, it consists of three components for medium to long-term business growth. First comes core business. That centers around Rakuten Ichiba and others that is solidly founded for such a business. The revenue was up 13.8% year-on-year, operating income up 3.1%. There are some areas like Rakuma and Rakuten Netsuper that is in the growth phase. The revenue was up 21.8% year-on-year. The mobile logistics that are considered as investment-phase businesses, the revenue is growing quite successfully. Although we are making huge investment in those areas still.
More specifically, when we consider the impact of COVID-19, Rakuten Ichiba, Rakuten 24, Rakuten Books, Rakuten Seiyu Netsuper, for those sectors, we are seeing strong growth despite the pandemic. For digital content like Kobo, Rakuten TV Europe, for example, they're seeing growth both in revenue as well as the number of users, Rakuten Securities. Forex transactions are noteworthy for their growth in Rakuten Mobile. The service has launched, and we are seeing the growth in service as well as operation together with an increasing number of subscribers. Rakuten Energy, this again is the area where revenue is growing thanks to growth in household. On the other hand, Rakuten Travel, unfortunately, I have to say that inbound travelers as well as domestic travelers, these are the areas we see major setback. Other sports like Rakuten Eagles and the Vissel Kobe football, their games are yet to be started.
We hope that their official game will start in June. Because of that, they are suffering major setback. However, recently, Lyft made an announcement about restructuring their business and placing focus on their core business. Therefore, we expect that their revenue structure would improve. As to Rakuten Card, we are seeing an increasing number of subscribers, although the offline transaction volume is declining. Unlike other card companies, the internet-based transaction plays an important role, and therefore, that is why they managed to maintain it as a flat. As I said earlier, domestic EC, including Rakuten Ichiba, is, of course, influenced by COVID-19, but we have some differences compared to others. We are seeing growth in various categories, including healthcare, sanitary products, daily goods, among others. Growth is seen in other areas as well. Therefore, overall, we have achieved 57.5% growth compared to previous year.
Among them, what is called the 39 shops, that is, the uniform shipping is introduced among more than 80% of merchants. Therefore, for them, we have seen the growth of 28.7 percentage points compared to those merchants without that system. In fact, users like the system, some say that they decided to use Rakuten Ichiba rather than others. Now they do not have to worry about shipping fee. Also, they are planning to spend more than JPY 3,980. We received such positive comments, and therefore, we are giving explanation continuously to other merchants as well so that uniform shipping would be introduced across the board among all the merchants. On the other hand, as I said earlier about digital content business, that includes Rakuten Kobo in Europe and Canada, Japan as well. It is growing in Q1 alone. We had the increase of 2.2 million users.
Volume 1, audiobook of Harry Potter, is distributed free of charge. Thanks to the publisher and author, it is enjoying the good growth. Hardware is something that worried us, but now that plants in China resumed their operation, we expect digital books as well would grow further. As to Rakuten TV, mainly in Europe, we saw an increase of monthly active users of more than 500,000. In Rakuten Viki, in Q1, registered users were added with another 2.1 million. Rakuten Viber, we are seeing growth, including Eastern Europe. Now, we are faced with the new normal, and we have to adapt ourselves to what is called the new normal. 89% consider that the work from home is taken as something positive. Only 2.3% consider it as something negative. We saw an increase in productivity.
three percent of employees think that way, and 36.8% think no change. Personally, I also consider that the amount of work that I am currently handling is three times more than before. You might wonder what I was doing before, but probably due to the fact that I do not have to commute, that I can spend more time for work efficiency improvement, as well as taking a look at the office layout and so on. Those exercises would further lead to improvement in efficiency. Also, we anticipate the Tokyo Olympic Games, so that we have been preparing for work from home even before this pandemic spreading, and therefore, that worked quite advantageously for us. As to logistics, we are working on this.
We are seeing an increase in the number of logistic facilities that have accomplished automation and hope that with the advent of this pandemic, this initiative will further spread for automation. Next slide, please. What kind of contribution are we trying to make as a contribution to society with Rakuten TV? Free content distribution is one, and ABCmouse as an education tool is offered. As to Rakuten Mobile, Rakuten UN-LIMIT 2.0 now includes an increase of the partner area for usage from 2 to 5 GB and instead of 128 kilobits per second, now even when you go beyond that limit, you can still enjoy the speed of 1 megabit. For partners, for Rakuten Travel, we are trying to achieve a faster payment cycle. Also, in a time-limited fashion, a fee waiver in Europe and restaurant in Japan and in Europe.
Real-time takeout service started, donation as well, the charity activities that's being promoted. On the part of Rakuten Travel for mildly ill patients as well as asymptomatic patients, we offer rooms, and more than 100,000 rooms are ready for them to stay. Now, more specifically, can I have page 13? I'd like to touch on mobile business. With mobile business, we are now considered as the number four player in mobile business as MNO. We have fully virtualized technology, first in kind in the world, together with construction of radio stations. With fast customer acquisition and efficient investment, it's something that I'd like to mention. There used to be a concern whether we could start this business with the originally planned investment level.
First of all, technology, we learned after launch that increasing bandwidth or capacity, because we are totally independent from hardware, thanks to full virtualization, by increasing virtual machine, we can increase capacity of network as much as we want. IP version 6 virtualization technology, a first in kind in the world, is quite significant. That would be good enough to stand against the explosive growth of the data consumption. Rakuten Ichiba, Rakuten membership are there as a basis for acquiring customers online, even when we cannot use the physical shops, together with the construction of fully virtualized base stations and investment. That is what was originally planned budget. Actually, the base station construction is advancing more than expected, and therefore, the timing of spending is faster than we expected. This is going to be explained later on from a virtual machine of what was considered.
Now, we have the first technology that is container-based technology, a very flexible and fully scalable platform is something that we are going to evolve into. Another major characteristic is that if you press the green button, then RCS could be initiated. That is an IP-based, software-based communication capability. Even when you are flying an airplane, you will not suffer disruption of short message. You can use it as short messages or for SNS as well. That is the kind of service that we are offering. From summer and onward, UCC, that is the another stage that we are going to evolve into. With that, the communication platform would evolve into a new platform. Therefore, as we are talking to major carriers in the world, in the first two years, as we realized full virtualization technology, that really took the world by surprise.
That results in a major differentiation competitive advantage, as we have been stating from some time ago. Rakuten Mobile would achieve success in Japan and then evolve into a platform globally. From now on, 5G is something that we are seriously working on, the hardware as well. We have developed hardware together with our partners. The cost there is far smaller than originally or conventionally considered. Once service started, many new subscribers are first comers when it comes to Rakuten Group ecosystem services. Therefore, once they become users of the ecosystem, the value could be expanded even further. As I said earlier, Rakuten UN-LIMIT 2.0, that is, the price that we would charge is less than half of existing MNOs, and for the first year, that will be free.
The network scaling up, that is, if you take a look at the daily data communication, for instance, a Rakuten Mobile network, the communication has grown by three times. The choice as much as what is usually used by the conventional hardware for the green communication button, that is, RCS-based communication. As I said earlier, of course, we want to further increase subscribers. Because we started as an internet-based company, even when offline physical stores are closed, we are less damaged by that because we can continue to receive subscription via internet. eKYC is going to be introduced, and as a result, there will be more smooth sign-up online. As to base station construction, originally, we planned to achieve 3,432 radio stations, but now we have 4,738 that are already on air. Those radio stations with contracts signed will soon achieve 10,000 radio stations.
In view of that, the challenges that we are faced with is about construction of base stations in big cities. However, it has been progressing quite successfully. Therefore, by March 2021, we hope to cover 70% of the population with our network. Now, moving on to logistics. Next slide, please. Based on the merchant, we would like to provide a fast and quality service to our users. This is the reason why we incorporated the one-delivery service. At the moment, as for Rakuten EXPRESS, the population coverage has reached 62%. For example, the Makoto Haiso, the delivery items at one time across RSL merchants or Oki-hai drop-off service have been enhanced. As for the logistics locations, facilities, we will be introducing Ichikawa, Nagareyama in Chiba and Sagamihara in Kanagawa from 2020. Next, please.
As for payment, going beyond this period, we don't want to use or touch cash. Cashless, I think, is going to accelerate. If you look at the Rakuten Group, I think we are the only group which has credit card, debit card, e-money, as well as QR code, barcode, and point cards. We are very strong on all these platforms, payment methods. We are able to provide diverse payment methods. This is going to be unified under one application so that convenience will grow. In particular, unfortunately, restaurants and small boutiques, I think they are having a hard time. However, having said that, Rakuten Pay has been affected, but Rakuten Edy is being launched in supermarkets in the suburbs. Implementation of Rakuten Edy function has been going very well. We are increasing the number of Rakuten Edy users.
Within the Rakuten Pay, Rakuten Edy has been introduced, which means that the number of new Rakuten Edy users are also increasing. Next, please. As it says here, the year-on-year growth was +42.1%. This is the summary. The group membership is 1.4 billion. Annual points issued was 320 billion points. There are over 70 plus services. The Rakuten service, I think, have both the plus and the minus. Regardless of what the situation is, we can see strong and stable growth. We have life insurance and non-life insurance. We are increasing business online. As for Rakuten Bank, sign-up is more than 5,000 a day. When we bought e-bank, this was a number that we could not imagine. That can be said for the other businesses. We have tremendous agility. The biggest issue, well, is sports.
Unfortunately, we have been affected significantly because sports have been canceled. As for overseas, first of all, in Taiwan, we have bought the brand in Taiwan. The brand recognition is going up in an unprecedented manner. People in Taiwan know the Rakuten brand. It's 77.5% in Taiwan. In the U.S., it's 62%. In Spain and France, the brand recognition is going up. Also in Canada. This brand awareness is very good. We would like to reflect that in business. The France and Germany e-commerce are doing very well. In particular, in France, the major, I think they are looking at Amazon and are moving away from Amazon to sign up with Rakuten. Many of the merchants in France are switching from Amazon to Rakuten. That concludes the presentation from my side. I'm sorry that it was rather lengthy. Thank you for your patience.
Next, Mr. Hirose's CFO will make a presentation.
Good afternoon. I am the CFO, Hirose. I'd like to give you the summary of the consolidated results. Mikitani already gave you the numbers. Revenue was for Q1 2020, JPY 331.4 billion, up 18.2% year-on-year. Non-GAAP operating income was minus JPY 18.1 billion. I'm sorry. If you look under that, the mobile logistics and other investment business, if you look at the non-GAAP operating income against JPY 16.1 billion in Q1 2019, it was JPY 24.3 billion in Q1 2020. The profitability for a core business is doing well. IFRS operating income was minus JPY 24.1 billion. The difference from the non-GAAP operating income, it has to do with the stock option as well as amortization, which was about JPY 600 million. Next page, please. This is the core business revenue operating income.
For core business, non-recurring, and future growth investments, the core business is doing well. The investments have gone down significantly against the previous year, but that is the reflection of lift business. Future growth investments, we will continue to invest in these businesses. This is the operating income breakdown. Last year, in Q1, it was if you start from JPY 5.3 billion, you can see that the operating income has been very good. It was JPY 5.3 billion in Q1 2019 operating income, which was JPY 8.4 billion. Mobile business and other investments excluded, it was JPY 8.4 billion year-on-year. Now, the investments for the future, because of the rebranding last year, it has turned to a positive. For mobile, it was minus JPY 25.1 billion. As a result, the Q1 2020 operating income, excluding loss from investment business, was minus JPY 14.7 billion.
In Q1, it was JPY 6.2 trillion, up 32.7% year-on-year. This is the membership value up until March. Starting in April, more contribution is expected. This is the membership value trend for Q1. Rakuten Securities, Rakuten Card, Rakuten Ichiba are seeing increase in users. The revenue has also gone up, as well as the LTV. Those have contributed. It has increased from JPY 4.7 trillion to JPY 6.2 trillion. Now, cross-use is also expanding. In Q1, it was up 72.3%. In addition to the increase in active users, we are seeing an expansion of the cross-use ratio. Quite briefly, this was my presentation on the financial results. Thank you.
It was the presentation on the financial results. From this point on, we would like to move on to the Q&A session.
The first question is from Citigroup, Mr. Tsuru. He has three questions.
The first question is the Q2, the communication or mobile business revenue. Can you please elaborate on that? Also, the results for Q1 and the investment for facilities for full year. The third point is the number of subscribers that you have acquired in April. Did it increase, or is it flat, or has it decreased? As for the revenue, as far as the mobile results are concerned, MVNO is the main core revenue. Also, options related to MNO or the device sales. Rakuten Communications as well, whatever that we had in the past. That is the source of the sales. Rakuten MNO, the revenue source, the commission, or for those people with multiple lines, that is from those customers. We are slightly worried that there might be some loss incurred there.
As for investments or CAPEX, rather, we had an original plan, which is being implemented ahead of schedule. The cost has been properly contained. Depreciation, I think, is depreciation cost is going to increase in Q2 from Q1. In any case, if we talk about mid to long term over the next few years, how much coverage can we get for antennas to decrease the roaming area? Those are going to be some of the variables where we will calculate the profitability as well as the revenue. The third question about the sign-up. Sign-up was already explained by Mr. Mikitani. At the moment, it is as planned. Mr. Hiroshi's comment, I want to substantiate the terminals on MNOs. Rakuten Mobile MNO compatible terminals are being bought by the consumers. Those sales will be reflected as well.
Just to substantiate, how do you look at these numbers and breakdowns? Huawei or Ericsson, Nokia, the tools from these companies have been minimized. We have a virtual network, which means that this is not going to be limited to Japan alone. We would like to take this platform out of Japan. The Amazon sales may also have their revenue source in the same way. We would also be aiming towards that. The difference with AWS is that you need antennas. When you bring it out of Japan to overseas, that will be explained by Tareq in his section after this. In any case, this mobile business, first year, the break-even point is about 7 million users. Until we reach that point, we will see a substantial deficit. The question is, how quickly can we reach that point?
The Japanese business is extremely important. If millions of people are moving on this platform, I talked about containerization. The business will be made into a container and will be used overseas. Japanese corporations, for the first time, will become the main player for the communication platform. Simply stated, the Japanese mobile business, of course, the cost structure is much cheaper or is extremely cheap. Maybe it is two-thirds or one-half. The Rakuten cost is so much cheaper. The offline stores have been closed down. There is like a 20% or 30% minus. That is not a major problem. The important point here that we would like you to focus on is how flexible and how scalable the networks Rakuten Group has built its network.
The potential of this business is not limited to Japan, but the whole world is focusing or is looking at our business. I hope the investors can understand that. Thank you very much.
The second question was CapEx. What was the CapEx in Q4? And what is the expectation for the full year? That was the question. Thank you.
This is Hirose speaking. I'd like to respond to your question. The asset growth, from this year, the balance sheet was attached in the appendix. Please look at the tangible assets and the fixed assets. For the quarter, on a cash basis, about JPY 50 billion-JPY 60 billion investment is something that we are planning at any rate for us, as was mentioned earlier. First and foremost, we would like to start up the antenna. That's the first priority.
After that, for the accumulative investment amount, you may think that we are overspending. However, the investments we have made so far are for core, backhaul, and others. This comes first. This station will go up as we go. Therefore, so far, we are on track with the original expectation. Thank you. Next question, please.
The second question is from Mr. Nakagawa of Nomura Securities. He also has three questions. The first question is on advertisement to Mr. Arima. Under the COVID-19 environment, can you tell us about the ad business based on business or timing, etc., Mr. Arima?
Okay. May I just answer the first question? Generally speaking, yes, you see this slide. The ad business, of course, has had a negative impact from COVID-19.
Given that backdrop, the digital marketing overall is not doing well because commodities are not moving or people are not consuming. There is a negative impact for us, for Rakuten. Rakuten Ichiba is the merchants who are doing business on Ichiba, as well as manufacturers selling on Ichiba, the major merchants or customers. As Mikitani said, Rakuten Ichiba's sales is doing well. Following that trend, I should say that ad business is doing fairly well. Of course, daily goods, drinks, food, they are doing very well. Online education or learning business, that is also growing. On the other hand, automobile consumer type of products are not doing well, obviously. Thank you.
My second question is to Mr. Mikitani and Mr. Yamada. The number of subscriptions for Rakuten Mobile for the management side, can you give us your qualitative analysis? Are you satisfied with the results?
Basically, as I said before, we started from zero. You cannot do marketing at full throttle. You have to have a substantial amount of subscribers. You need to confirm that there is no problem there. TVCM has not been launched yet nationally. Campaigns are still in waiting. We have not launched that yet. It is very stable as of now. I think we need maybe a little bit more scalability where we can accept 100,000 subscriptions, applications a day. The second, third phase plans will be launched from now on. At this point in time, I would say that I am satisfied in the sense that we have achieved what we have planned to achieve. The data volume is twice or three times other competitors. In terms of scalability, I think we have been able to introduce tremendous differentiation. This is from a different perspective.
On Twitter, I am receiving positive and neutral comments as well as some negative comments. I am looking at the ratio breakdown of the Twitter comments. There is no 100% in this world, but the ratio of the negative comments is going down. It is like a very small fraction of what it used to be originally. Looking at that, as Mikitani said, I think we can do a much more aggressive marketing. The users will always be evaluating us on a daily basis. Of course, there is room for improvement. There are so many things we need to implement or we need to do. I think we have done what we had in mind already. Could you please show page 39? Rakuten Card holders is 19.64 million. Rakuten Bank accounts, 8.69 million accounts.
Rakuten Card is when we started, Rakuten Card, we were only getting about 50 acquisitions a day. It is about 10,000 now. That is how quickly it is increasing. In the same way, Rakuten Mobile, I think, is going to grow. That is the minimum projection. As a start, I mean, we have just started a journey. Rakuten Mobile, I believe, is operating very smoothly in a stable manner.
The third question is for Mr. Hosaka. Overseas Visa and overseas brands settlement show difficult financial results. In this situation, Rakuten Card is doing very well. What set you apart? For shopping, revolving payments, and cashing, what is the breakdown? Do you anticipate more reserves for non-performing loans and credit going forward?
If you look at the overall situation overseas, Visa and Master in April this year is down in terms of the payment volumes by 20-30% on a global basis. In that case, we haven't shared any information on the monthly April situation. As was alluded, we have been making a positive growth year on year in the month of April. Despite the state of emergency declaration compared with other companies, we believe that our card is doing very well even in this situation. Also, as you can see from this chart, the shopping volume as well as the balance and as well as the number of members, as Mikitani said, 10,000 per day is the pace of a new acquisition today. The card business is doing still very well. This is the shopping, revolving, and cash advance balances up to March.
We were growing double digit every month. Payment volume is flat year over year or slightly up year on year. After April as well, the balance is likely to go up positively. We can secure substantial earnings from this. As you can see on the appendix, the non-performing doubtful account allowance for January-March, the overall cost for non-performing loan is down, actually. Up until the end of last year, the non-performing loan loss, we have sold off those credits. We are very healthy at the moment. Our strength, as you know, is that when the company was just set up, we have strengthened our credit collection capability. That is what we have, the competence. The short-term bad debt is being resolved very quickly.
Therefore, even after the month of April was started, there were some inquiries about the postponement of payments because of the corona situation. That impact is very, very limited. Therefore, we still have a very solid credit collection procedure and process. We are not likely to see any significant increase in bad debt. Also, Rakuten Ichiba usage rate is very high, right, for the card? The people who are using our card use a lot of online shopping, I suppose. These are the types of people who, how can I say, despite the very difficult situation like we are now, there are less people who would suffer in such an environment economically. I think you're right. Also, we are increasing the credit screening capability. Using the database of the Ichiba, we have been applying a very strict screening process. Thank you.
Next question is from Mr. Katayama from Credit Suisse. He has a question on domestic EC. The first question, looking at the third-party data, after the impact of COVID-19 has been very strong, it seems that the GMS, Rakuten GMS, is doing quite strongly. That is the first question. The second question, the most recent shopping e-commerce growth rate in terms of orders or in terms of the number of consumers, etc., how are they affecting the acceleration of the business, e-commerce business? Also, how is COVID-19 impacting your e-commerce?
Let me just give you a general comment. I would like to ask Mr. Takeda to supplement. In comparison to other European or American companies, I do not have that kind of information.
As Rakuten Group and Rakuten Ichiba, we have a very balanced, well, we're also not only handling daily goods or hygiene goods, but everything is growing in a balanced manner. The market, it's based on marketplace approach. Of course, the impact might be felt later, such as through fashion, etc. Maybe the take rate of Rakuten is low, and maybe that is the reason. In one sense, I don't want to brag, but JPY 3,980, this uniform shipping fee, the fact that your shipping fee becomes free if you buy more than JPY 3,980, of course, we had some issues related to this. In reality, this has worked out very well. Mr. Takeda, could you please speak on the john?
Yes. As was explained, because we are a marketplace, that is our strength.
In terms of logistics too, since last year, we have been trying to properly consolidate the logistics. We are receiving orders in a stable way without any constraints vis-à-vis logistics. The JPY 3,980, this uniform free shipping fee is received well by the consumers because it is very easy to understand. As the number of purchases, the new purchases, the repeaters, we are seeing increase in both. The number of orders, of course, are increasing. In terms of unit price, the so-called daily goods, the repeat purchase of the daily goods, average is going down. Since we have a very balanced john, I think we are doing quite well. Thank you.
It is almost time to close the second part. Let us take a final question from investors and analysts. From Mr. Hara, Daiwa Securities, we have got two questions.
First, Rakuten Mobile users, Rakuten service usage is my question. Could you make a comment on this? For example, Rakuten Mobile users, they acquire Rakuten points. Can they use those points so that they are consuming more on the Rakuten Ichiba? Is there any case like that? Under the second question, under the difficult financial situation, what is the PU business, finance business prospect? The revolving loan or finance, is it likely to expand going forward?
In terms of the synergy, it's been only one month, so it's too premature to talk about the synergy. You can't simply conclude that you get the 1% additionally if you sign up with the Rakuten Mobile. That's the offer. If among all the new subscribers or the customers, most of the people are not using any of other Rakuten services yet. Therefore, in the group, we've been doing various marketing activities.
One of them is SPU program. It turned out to be very successful. Going forward, we would like to shift Rakuten Mobile users to other Rakuten services by conceiving various mechanisms. By doing so, our target is that within the Rakuten Group, most of the Rakuten Mobile users also use services like Rakuten Ichiba and other areas. By doing so, even after the free charge period, the mobile service should be enjoyed for free. It is possible that they get the free service after one year. We can maximize the synergy like that. Also, we can provide a benefit to Rakuten Mobile users within the ecosystem going forward. One important tool we can use is Link, which is RCS. It is a very futuristic communication using UCC. This Link within Rakuten Group service will be fully utilized going forward.
It is not merely about the economic benefits like points. It is about the social community. We would like to embed the Rakuten Group services in the communities of the users of different services. Hosaka-san, could you add? Yes. After the corona situation, under the new normal, one is online financial service. There will be a huge shift towards the online finance services. For our companies, many companies have full services like banking, securities, card, and so forth. In our case, we have those lineups, but all online. Therefore, we already have an advantage compared with other companies. This is going to expand. Already, you can see the proof in the number of customers in banking, securities, and mutual funds. We enjoy a very good growth in there. Therefore, going forward, we would like to enjoy this advantage going forward.
In terms of the revolving loan balance trend, from April to June, on the offline area compared with others, we are better than other companies, but it is getting flat. How about the future prospect? As companies try to recover, I think we are the one to recover first before anybody else and enjoy the growth thereafter. The profit source, earnings source that we have is one of them is the revolving loan balance. We believe that it is going to increase going forward. For the card application, we are reducing the marketing cost, but still, we enjoy more than 10,000 applications per day for Rakuten Card today. The strength and advantage of Rakuten Card is still in place.
Also for insurance overall, using the internet, the distribution of insurance products over the internet is not limited only to life insurance, but also we would like to start selling non-life insurance products and provide a one-stop service. This is going to be a major pillar and generate substantial earnings going forward. That's all. Thank you. If I may add, because we have full-line service, including banking services, we have 100% of the financial services both on the online and offline basis. Nobody has such extensive offerings. Therefore, for the Rakuten finance business, even if the financial situation gets worse going forward, we believe that we can continue to grow. We have all of the items in the portfolio already. In that sense, we have a great advantage.
Just for your information, non-life insurance product, because of the less and less traffic accidents these days, earnings are very strong at the moment. Thank you.
This concludes our financial results meeting of Rakuten. Thank you very much for your participation.