Japanese E-Commerce Behemoth Rakuten may enter India in the next six to eight months, and is seeking a strategic alliance to tap rapid growth in the country’s Rs.62,000 crore e-commerce market.

Rakuten, the owner of chat app Viber, is exploring the possibility of starting a travel and hospitality portal in India.

According to Economic Times, The Tokyo-based company is also actively exploring getting into back-end solutions such as logistics, through an acquisition.

Rakuten's spokesperson in an email to ET said, "India is a vibrant growth market and a great source of talent and ideas for us at Rakuten. We are always interested in new global opportunities for growth but we don't have any comments on developments in India at this time," According to research firm eMarketer, Ecommerce sales in India are expected to grow from $14 billion in 2015 to $55 billion in 2018.

India has seen the fastest growth in retail ecommerce among Asia-Pacific countries, surging 133.8% in 2014 and 129.5% in 2015.

Rakuten is seeking to grab a share of an e-commerce industry that has been growing at an average annual rate of 34% since 2009, and had been estimated to touch $13 billion by end 2013, according to a 2013 report by the Internet and Mobile Association of India (IAMAI) and audit firm KPMG. According to the report, travel operators (rail and air tickets and the like) were expected to account for 71% of this, with sales of other goods accounting for the rest.

India already hosts the world’s largest e-commerce firms such as Amazon.com Inc., eBay Inc. and China’s Alibaba Group Holding Ltd, which offers its marketplace platform only for businesses now.

The company runs Buy.com, online cashback company Ebates Inc. in the US and also has interests in ride-hailing app Lyft and Pinterest. Rakuten also connects over 10,000 online specialty stores from all over Japan to 170+ countries in the world.

Apart from Japan and the US, the company also has interests in UK, Brazil, Spain, Malaysia and Indonesia. In fact, about 60 percent of its revenue comes from its business abroad. In 2012, the company’s revenues totaled US$4.6 billion with operating profits of about US$244 million.

Now the competition looks interesting , as we will await to see whether three of world’s biggest ecommerce firms — Amazon from US, Alibaba from China, and now Rakuten From Japan take the lead in the Indian market, or our Indian poster boys — Flipkart, Snapdeal and Paytm take away the glory.

The sudden interest in India may have been prompted by the surging e-commerce niche in the country along with an increasing facilitation of outside entry. Indian Government’s recent decision to allow upto 100% foreign direct investment in online marketplaces is obviously the cherry on the cake.

Experts say that since Rakuten’s strength lies in its online shopping business, it would make sense for the company to eventually enter that segment.

What's your opinion on Rakuten's this move to enter Indian Market?



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