Japanese eCommerce company Rakuten to enter India, planning acquisitions to support plans


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No wonder Indian eCommerce market is growing at a rapid pace. Recently Flipkart, India’s leading ecommerce website hit $1 billion in GMV run rate. SnapDeal and Amazon are believed to follow suit soon. In the next 5 years, there will be 500 Mn people who will be digitally active in the country, hence the scope for online retail is soon going to be even bigger.

Moreover with Amazon having already established its presence last year, and Walmart to step in later this year, the industry is even expecting great amount of investor interest as well as potential of foreign players. And joining the league now is Japanese online retailer Rakuten.

[Learn: How real or hyped is the Indian opportunity for Internet Retail]

“Seeking a strategic alliance to tap rapid growth in the country’s Rs.62,000 crore eCommerce market” Rakuten is actively looking at setting up operations in travel and hospitality sector in India, in next six to eight months – three people familiar with the company’s plan told Mint. All three spoke on condition of anonymity.

The strategic alliance however would come in the form of an acquisition that would help Rakuten in setting up its back-end solutions such as logistics, the report further claims. For the past few months, teams from Rakuten have been consulting investors, companies and industry experts as it explored the Indian market.

Founded in 1997, Rakuten runs a multi category shopping portal Rakuten Global Market and other online businesses like Rakuten Coupons and TicketStar, among others. In the face of weak consumer sentiment, Indian eCommerce market makes a perfect sense for Rakuten, which has been aggressively eyeing global growth markets. Rakuten’s recently acquired companies include call and messaging app provider Viber Media Ltd for $900 million, US-based e-commerce portal Buy.com for $250 million and e-reading platform Kobo, among others.

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Factors like growth in internet penetration, increasing middle class with disposable income and rising number smartphone connected people will help Indian eCommerce industry become one of the most exciting spaces for tomorrow’s global online community.

The author can be reached at devesh@iamwire.com

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