Rakuten may be cutting back its e-commerce business in Europe and Southeast Asia, but, at home in Japan, the internet giant is stepping into a new field — quite literally — after it invested in an agriculture tech company for the first.
Weeks after withdrawing e-commerce sites from the UK, Spain and Austria, Rakuten is putting an undisclosed sum into seven-year-old Telefarm, which operates a platform that promotes organic farmers in Japan. Most notably, Telefarm connects consumers with organic farmers and their produce, while it also helps with processes such as storage, transportation, manufacturing, and even the hiring of farm workers.
It’s an interesting move for Rakuten, which is best known for its online shopping empire in Japan, where it has also expanding into financial, a mobile service and more. Rakuten’s presence outside of Japan has been less successful. While it has invested in a range of U.S. companies including Lyft and Pinterest, and it has acquired firms like chat app Viber, video platform Viki, and U.S. coupon site Ebates, the company has withdrawn from less lucrative regions as part of a new strategy.
Organic farming, or organic products, could be a part of that new focus in Japan. Rakuten said that this invest in Telefarm would lead to it launching new products in its domestic market.
With the working population in the agricultural industry steadily declining, coupled with Japan’s aging population, labor shortages in the industry are becoming a serious problem, and the amount of deserted arable land is increasing every year. Farmers are facing serious challenges, with initial investment and unstable revenues posing obstacles for new farmers, and the securement of stable sales channels and a shortage of successors presenting challenges for established, small-scale farmers.
Going forward, Rakuten will explore the development of new services in the agriculture field through the internet, while aiming to contribute to regional revitalization through the utilization of deserted arable land and support for new farmers.
Beyond scaling back parts of its global business, Rakuten recently embraced drones — running its first trial on a golf course — and earlier this month it struck an agreement to bring a selection of premium Japanese goods to China via Kaola, the cross-border e-commerce service operated by Chinese internet giant NetEase.