Posted by John Vinson

Depending on how well kept you are on the topic of e-commerce companies, you may or may not have heard of a Japanese online retailer called Rakuten. They’re the largest online retailer in Japan, and look to expand their business with the purchase of Buy.com. The deal was laid out all in cash, and Buy.com sold for $250 million.

Rakuten has been pushing its boundaries by partnering with many companies outside of Japan’s borders. They’ve created a joint venture with Baidu, China’s main search engine, to create an online shopping mall for the country. They’ve partnered or purchased e-commerce sites in both Thailand and Taiwan. And now with the purchase of Buy.com, they look to tackle the largest ecommerce market in the world.

Hiroshi Mikitani, the CEO of Tokyo-based Rakuten had this to say about the acquisition, “We feel it has a great strategic fit with our global expansion.”

“Our goal is to become the number one e-commerce company and Internet company in the world.”

Purchasing Buy.com is certainly a good start, as they’re one of the leading ecommerce sites in the country. They were the main competition of Amazon, who they tried to ‘out deal’ in order to snag potential customers. Mikitani has some ideas to take Buy.com in new directions. Rakuten Ichiba, their Japanese site combines shopping and entertainment into its sales strategy. This difference in process allows merchants to connect with customers beyond the simple customer-merchant level.

Mikitani explains how their business model can challenge the larger stores, “If we can convert it into what we do here in Japan, then it is going to be a lot more powerful.”

“We believe that we have a very different business model from Amazon and eBay. We empower the merchants.”

Rakuten is looking to expand their market, due to the shrinking capabilities of the domestic Japanese market. With a strong yen, purchases of overseas companies is a no-brainer for the company.

It will certainly be interesting to see how Rakuten’s model will effect sales in the US. With such a large variety of e-commerce sites, Rakuten will certainly have an uphill battle. However, if they can differentiate themselves from the competition, then perhaps they could prove to be a powerful niche market.

This entry was posted on Friday, May 21st, 2010 at 11:03 am and is filed under Uncategorized. You can leave a response, or trackback from your own site.

About the Author: John is a staff writer for WebProNews.