Of course, they have been scouting around in Malaysia for years too, doing detailed market study and ground work by talking to almost everyone (From gigantic enterprise like Maxis, Berjaya Group who also owns MOL and 7-eleven to blogger-wannabe like me) in the market.
And finally, they are coming in. This time is for real, no more rumors. Here's the spy shot.
Good news is, You don't have to work so hard to spy on them like what I did, just follow them on fb now
Just take a look at a few Rakuten's acquisition, they bought Buy.com (now competing with Amazon on 3rd party sellers marketplace) in the U.S. for $250 million, Play.com from the UK for $38 million, and e-reader company, Kobo (Kindle wannabe) for $315 million. Yes, they are buying up e-commerce companies like the way Malaysia Uncles and Aunties are buying up properties.
Apart from acquisition, they also enter market via forming joint ventures with local giants. Eg they entered Taiwan market by partnering with the President Chain Store Corp (Taiwan Largest Retailer controlling 7-11 stores and multiple franchises like Starbucks Taiwan), they entered China (but recently just pulled off) by partnering with Baidu.com (China's no 1 search engine), and they entered Indonesia by partnering with PT Global Mediacom (Indonesia largest Media Company). On these 3 JVs, rakuten owns 51% of the JV while remaining 49% owned by the respective local partners.
For South East Asia expansion, it started way back in the year 2009. First, they acquired Tarad.com (founded by Pawoot Pongvitayapanu, which I met up and exchange insights with at 2011's Asia Ecommerce Expo), then followed by the entry to Indonesia with Mediacom with the launch of Rakuten Belanja in June 2011.
So, are they entering Malaysia market via JV? No, they are NOT. Actually they been in talks with major telcos, media companies (media prima) on forming JVs. But none of it bear fruits.Why is it so? Isn't it better if you can find a local partner who understand the local cultures, I suspect below 2 reasons are the stumbling blocks to the JV talks.
1) None of them want to become minority stake holder (means the party who owns only 49%)
2) "Potong Stim" (Malay words, mean lost interest and enthusiasm) after knowing it will at least take an average of 3 to 5 years to break even! (come on... can't blame corporate CEO for it as short terms KPI is what most professional managers care about and what the shareholders demand!)
One of the keen suitors is Berjaya Group led by Billionaire Tan Sri Vincent Tan, which own MOL.com, 7-11, Starbucks etc. They were serious on forming a JV with Rakuten but eventually it fell shorts. I believe main reasons is about controlling stakes too, neither party will settle for 49%. And reason why Berjaya is pursuing this is simple, They want to copy 7-11 Taiwan success story (You can buy online, pay cash at your nearest 7-11 counter and even have your goods delivered there!)
A few things on Rakuten Malaysia which I predict will unfold
- They are pure platform play (don't sell direct, don't carry products), will remain so.
- Thus, they will see other platform player as their competition (Think Lelong, Gmarket aka Qoo10, Trosworld etc)
- They will have big size local partners, NOT JVs, but mainly to promote to mass consumers (Think telcos, banks or even airlines which own mass consumers or members info)
- They will promote and highlights on their superpoints (AEON aka Jusco, another retail giant Malaysian are familiar with with, have a very successful membership and point system too)
- They will probably focus on 3C products (Computer, Communications & Consumer Electronics) as a start, this put them head to head competition to Lelong's Superbuy and Rocket Internet's Lazada
- They will acquire branded or medium to large-size merchants instead of small businesses
- They will work closely with Yamato + PosLaju.
But will all the efforts be enough? Can it make more Malaysians buying online? As Malaysia is a notoriously fragmented market (read my post with PCHome Founder and CEO on top 3 Challenges facing Malaysia e-commerce).
Also, do take note not all ventures are successful, the latest news has revealed new challenges they are facing in the emerging market like China competing with the incumbent like Taobao.com
http://it.chinabyte.com/101/12308601.shtml
But if there's one apparent winner, to be certain, it's almost certainly Google. Almost all of them will place advertisement on Google Adwords! (Same goes for China, Lot of ecommerce site burn cash advertising where lot of them wind up when funding runs dry).
E-commerce is a marathon, not a sprint. Only the one with stamina will have the last laugh.
PS: Something offtopic, Rakuten also breeds billionaire, GREE founder - Yoshikazu Tanaka, japan largest mobile social network founder, is an early employer of Rakuten. Respect.
Reference:
http://articles.businessinsider.com/2012-03-26/tech/31238863_1_business-insider-small-businesses-business-class
http://www.bangkokpost.com/tech/computer/279881/click-till-you-drop
http://www.bangkokpost.com/tech/computer/282114/opportunities-without-borders
http://www.satudetik.com/internet-jurnal/rakuten-provider-toko-online-gratis/
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