Thursday, December 17, 2015

PAN-ASIAN E-COMMERCE GROWTH AND BATTLE

Rakuten to Set Up Shop on China’s JD.com

Japanese e-commerce giant reaches into Chinese market as growth prospects dim at home


Pedestrians walk past a Rakuten Cafe in Tokyo, Aug. 4. Rakuten said Wednesday it plans to set up an online store on China’s JD.com. ENLARGE
Pedestrians walk past a Rakuten Cafe in Tokyo, Aug. 4. Rakuten said Wednesday it plans to set up an online store on China’s JD.com. Photo: Reuters
TOKYO—Japanese e-commerce giant Rakuten Inc. 4755 3.61 % on Wednesday said it would set up an online store on China’s JD.com Inc. JD 1.69 % to reach the greater Chinese market as it faces limited growth prospects and stiff competition in Japan.
Rakuten said it would set up the outlet on JD Worldwide, JD.com’s cross-border platform, with an initial focus on cosmetics, snacks and health-food products popular among Chinese consumers. It said plans are under way to expand the range of merchandise over time.
By giving Rakuten greater access to China’s lucrative online-shopping market, the agreement could sharpen a rivalry with Japanese Internet and telecommunications giant SoftBank Group Corp. 9984 1.71 % , which is the largest shareholder in online portal and retailer Yahoo Japan Corp. 4689 0.00 % It could also fuel competition between JD and China’s biggest e-commerce company, Alibaba Group Holding Ltd. BABA -0.52 % , whose biggest shareholder is SoftBank.
By giving Rakuten greater access to China’s lucrative online-shopping market, the agreement could sharpen a rivalry between that company and Japanese Internet and telecommunications giant SoftBank Group Corp., which is the largest shareholder in online portal and retailer Yahoo Japan Corp. It could also fuel the competition between JD and China’s biggest e-commerce company, Alibaba Group Holding Ltd., whose biggest shareholder is SoftBank.
Rakuten, led by billionaire Hiroshi Mikitani, runs Japan’s largest e-commerce business and a plethora of services from travel to banking. In recent year it has been rapidly expanding outside Japan through acquisitions of e-commerce sites such as Ebates Inc., messaging app Viber and investments in U.S. ride-hailing app Lyft.

For JD.com, the deal will open a fresh window to channel its Chinese customers to popular Japanese goods after it recently lost an important Japanese partner. In July clothing brand Uniqlo left JD.com’s platform after Alibaba founder Jack Ma made a personal pitch to Tadashi Yanai, the head of Uniqlo’s parent company, Fast Retailing Co.