Rakuten Singapore axes eCommerce site

Japan’s online retailing giant Rakuten is to close its eCommerce websites in Singapore, Indonesia and Malaysia on March 1.  

And it is reportedly seeking a buyer for its Thailand business Tarad.com which it bought in 2010.

The decisions follow a disappointing trading result which has prompted the business to refocus on its domestic operations and scale back unprofitable overseas activities. The company reported net profit for the year fell 38 per cent year-on-year to 44.3 billion JPY (US$393 million) on revenue of 714 billion JPY ($6.3 billion) – up 19 per cent, largely due to writedowns of its Kobo, Southeast Asian and other struggling divisions.

Some 30 staff in Singapore had their employment terminated on Friday, just five days into the Lunar New Year. By the time the sites are wound down, about 150 staff will have been axed in the three markets, but the company will retain a regional headquarters in the city state.

Rakuten’s apparently profitable Taiwan business will continue to operate.

Tech website Techcrunch reported the three eCommerce sites to be shuttered will be replaced by a new product in Southeast Asia, “a consumer-to-consumer app called Rakuma” which, Rakuten said, has grown 20 per cent month-on-month in Japan.

“That concept sounds a lot like (indeed, the same as) Carousell, the app that Rakuten Ventures is an investor in. Singapore-based Carousell is currently in three countries in Southeast Asia but, as we reported late last year, it is trying to raise a $50 million round to expand its service significantly across Asia.”

No further details of the Rakuma concept, which is mobile-based, have been released, with the project still under development.

In a statement to Reuters, Rakuten said the new concept was a consumer-to-consumer business model, rather than the aggregation-based business-to-business-to-consumer format of the closing Rakuten sites.

“In Southeast Asia, as the market itself changes and adapts, we are looking toward C2C (customer to customer) and mobile business models for eCommerce and other businesses,” Rakuten said.

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