Rakuten, Japan’s biggest e-commerce company ($10 billion market cap), and Chinese search leader Baidu have today opened a new online shopping mall in China. Dubbed Lekutian (“Happy Cool Day” in Chinese), the launch of the site was announced back in January. Both web powerhouses will invest US$50 million over the next three years in their joint venture.
Under the deal, Rakuten holds 51% of Lekutian, with Baidu owning the rest. Much like Rakuten’s Ichiba market place in Japan (see here for our extensive case study on Rakuten), Lekutian is a B2B2C platform. Chinese merchants can set up an online shop in the online mall to sell directly to end consumers or source products from suppliers.
Lekutian monetizes through collecting “virtual real estate fees” as well as commission payments from shop owners. The platform started with some 2,000 merchants in beta today, instantly making it the biggest B2B2C platform in China, according to Rakuten.
In Japan, Rakuten dominates the e-commerce market with its gigantic Rakuten Ichiba online mall, currently counting 33,000 merchants and no less than 64 million members (which is half of Japan’s population). The Baidu deal in January was the first of a series of international deals the company inked in recent months. Rakuten acquired US-based Buy.com for US$250 in May and France’s Priceminister for the same sum just one month later.
The launch of Lekutian follows another cross-border joint venture in the e-commerce sector between a Chinese and a Japanese company: Taobao and Yahoo Japan linked their online shopping services back in June this year.