Rakuten breaks up with Baidu

Japanese online retailer Rakuten has terminated its e-commerce service partnership through Lekutian in China.

In January 2010, Rakuten established a joint venture with Chinese internet search provider Baidu as part of an e-commerce expansion into China. The two companies launched an internet shopping mall for the Chinese domestic market under the Lekutian name in October 2010.

However, in the face of intensified competition in the Chinese e-commerce industry, Lekutian did not perform in line with Rakuten’s expectations.

In a statement, the two companies said that following careful deliberation, both Rakuten and Baidu determined that closing Lekutian was in the best interest of all stakeholders.

Analysts blamed the failure of the joint venture to the differences between Chinese and Japanese tastes in site design and merchandise, which Rakuten failed to overcome.

Rakuten said that the closure of Lekutian will not affect Rakuten Group companies operating in China, including travel-related services Tabimado, www.etpass.com and other local travel reservation sites, as well as Rakuten Network Science and Technology, its development centre in Beijing.

Undaunted by its failed China venture, Rakuten says it will continue to evaluate e-commerce opportunities in China that fit with its plans for aggressive growth.

“In order to grow globally, we can’t ignore China. We will definitely return to China,” said Rakuten.



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