When I covered Rakuten back in July last year, I called it “the biggest e-commerce site you never heard of”. And in fact, the eponymous Japanese company behind the B2B2C market place (which is currently used by over 33,000 Japanese merchants) generated less than 10% of total sales overseas at that time. But that’s about to change very soon.
Rakuten (which, in its home market, is much bigger than Amazon Japan) today announced [PDF] it has reached a definitive agreement to acquire California-based shopping portal Buy.com for $250 million next month. The all-cash deal will be handled by Rakuten USA (headquartered in Boston), which is expected to merge with Buy.com in the process.
Rakuten in Japan counts 64 million members, while Buy.com claims 14 million customers who are mainly located in the US and Europe. Last fiscal year, the Japanese company reached $3.2 billion in sales, and currently boasts a market cap of $9.4 billion at the Tokyo Stock Exchange
Rakuten already expanded into selected markets in Asia (subdisiary Rakuten Travel, for example, is active in Korea, Thailand, China and elsewhere), after acquiring New York-based advertising network LinkShare for $425 million five years ago. But the Buy.com deal marks the first try for the Japanese to seriously enter the American e-retail market, with Rakuten CEO Hiroshi Mikitani saying he sees the acquisition as a chance to set up a truly global marketplace that can eventually be used by sellers and buyers regardless of their location.
There seems to be a lot going on in Asia’s e-commerce sector lately. The Rakuten-Buy.com deal follows the spectacular cross-border partnership forged by China’s e-commerce behemoth Taobao and Yahoo Japan just ten days ago. Rakuten itself and China’s leading search engine company Baidu announced plans to invest $50 million in a virtual shopping mall that is scheduled to go live later this year back in January.
Find more information about Rakuten in our extensive case study from last year.