Japanese e-commerce titan Rakuten may enter India

Japanese e-commerce giant Rakuten, which opened its development centre in Bengaluru in 2014, has now opened a business office in the startup hub.
Rakuten, the company behind chat application Viber, is eyeing a direct entry – as opposed to Alibaba’s investment-based approach – into the small yet aggressively growing Indian online marketplace segment.
The company has reportedly started poaching mid-level managers from Flipkart and Amazon.
India has seen the fastest growth in retail ecommerce among Asia-Pacific countries, surging 133.8 per centin 2014 and 129.5% in 2015. As per Goldman Sachs, India’s ecommerce market is expected to triple to $68.8 billion by fiscal year 2020.
Promising as the Indian e-commerce market seems, it would be challenging for Rakuten or any other newcomer to establish itself in the space as top players such as Flipkart, Amazon and Snapdeal dominate Indian ecommerce, each with billions of dollars in gross sales.
About Rakuten
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 aquarter of Japan’s e-commerce 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.
In 2014, it acquired San Francisco-based online cash back company Ebates Inc. for $1 billion. Ebates deals with a host of US retailers including Amazon.com, Best Buy, Macy’s, Home Depot and others.
A few months before that, Rakuten had bought the Viber internet messaging and calling service for $900 million. Other trophy investments by Rakuten include US ride-hailing app Lyft and online scrapbooking site Pinterest.
In Japan, it operates the flagship Rakuten Ichiba marketplace with more than 40,000 merchants. The company also helps traditional retailers go online.