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Another Big Player to Enter Indian E-commerce Market?

Another Big Player to Enter Indian E-commerce Market?
Image credit: Rakuten
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Japanese e-commerce Company, Rakuten, considered to be Japan’s Alibaba, is all set to enter Indian online marketplace, says a report in ET. Rakuten is Japan’s largest e-commerce firm and have been looking for opportunities to go global for quite some time now.

In 2014, Rakuten had opened a development center in Bengaluru hinting at their arrival. But now that they have established a business office in the city and started poaching midlevel managers from Flipkart and Amazon, the rumour of their setting up an online retail platform in India is turning out to be rather true.

Declining to comment, a Rakuten spokesperson told ET, “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."

Amidst all the confusion with government allowing 100% FDI in online marketplace, hindering them to give discounts to customers; Alibaba, although an investor in local Indian e-commerce firms, planning to enter Indian Market; the booming online business and the competition at present, the news has somehow found the perfect timing to gain the right amount of attention.

India has seen the fastest growth in retail e-commerce among Asia-Pacific countries, with 133.8% in 2014 and 129.5% in 2015. The market itself is expected to grow from $14 billion in 2015 to $55 billion in 2018, according to research firm eMarketer. With such intense competition, not only will it be hard for Rakuten to enter Indian markets and establish themselves over the tops players such as Flipkart, Amazon and Snapdeal, but it will be harder when maintaining loyal consumers over a long period of time. That, however, will be a matter of discussion way ahead in the future.

Rakuten has been eyeing opportunities in international markets for some time now. The Tokyo based company, in 2010, 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. In the same year they had bought Viber, an internet messaging and calling service, for $900 million. US ride-hailing app Lyft and online scrapbooking site Pinterest are also some of its prized accumulations.

Accounting for more than a quarter of Japan's e-commerce business, even ahead of Amazon, Rakuten would definitely want to repeat the same in India. 

Edition: December 2016

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