Japan’s largest e-commerce company and Viber chat owner Rakuten has opened a business office in Bangalore and plans to to open an online retail platform in India.
The company is appointing midlevel managers from Flipkart and Amazon.
Rakuten which opened a development centre in Bengaluru in 2014, has established a business office in the city and started poaching midlevel managers from Flipkart and Amazon for setting up an online retail platform in India, people familiar with the development told.
Started in 1997 as a small online marketplace with half-a-dozen employees, Rakuten currently employs more than 12,000 with sales of over $5 billion. It accounts for more than a quarter of Japan’s ecommerce business, ahead of Amazon in that country. It also has interests in financial services, digital content and travel businesses.
A foray into India would form part of Rakuten’s expansion strategy. In 2010, it acquired Buy.com in the US in a $250-million all-cash deal as part of its push into North America.
The company has both — the reasons as well as the resources to enter the country. And while it’s the top retailer in Japan and facilitates more than a quarter of that country’s online retail, it also has significant interests abroad.
The company also runs online cashback company Ebates Inc. in the US and also has interests in ride-hailing app Lyft and Pinterest. Rakuten also connects over 10,000 online specialty stores from all over Japan to 170+ countries in the world.
A Rakuten spokesperson declined to comment. “India is a vibrant growth market and a great source of talent and ideas for us at Rakuten. We are always interested in new global opportunities for growth but we don’t have any comments on developments in India at this time,” the Tokyo-based firm’s spokesperson said in an email.
Apart from Japan and the US, the company also has interests in UK, Brazil, Spain, Malaysia and Indonesia. In fact, about 60 percent of its revenue comes from its business abroad. In 2012, the company’s revenues totaled US$4.6 billion with operating profits of about US$244 million. In June 2013, Rakuten, Inc. reported it had a total of 10,351 employees worldwide.
In 2005, Rakuten started expanding outside Japan, mainly through acquisitions and joint ventures. Its acquisitions include Buy.com (now Rakuten.com Shopping in the US), Priceminister (France), Ikeda (now Rakuten Brasil), Tradoria (now Rakuten Deutschland), Play.com (UK), Wuaki.tv (Spain), and Kobo Inc. (Canada). The company has investments in Pinterest, Ozon.ru, AHA Life, and Daily Grommet.
The sudden interest in India may have been prompted by the surging e-commerce niche in the country along with an increasing facilitation of outside entry. Indian Government’s recent decision to allow upto 100% foreign direct investment in online marketplaces is obviously the cherry on the cake.