Amazon not only sold $2.5 billion worth of goods, it introduced Prime members to new services. How should rivals compete in 2017?
The Japan-based owner of Buy.com acquires a 75% stake in Brazil's Ikeda.
Rakuten Inc., a Tokyo-based e-marketplace operator, today said it had expanded its global reach by acquiring a 75% stake in Ikeda, which sells e-commerce technology and services to more than 100 of the largest online retailers in Brazil. Rakuten already owns such U.S. properties as Buy.com—the Japanese firm bought the online general merchandise retailer a year ago—and the LinkShare affiliate marketing network. In Europe, Rakuten owns the Price Minister e-marketplace.
By investing in Ikeda, whose e-commerce technology clients include luggage retailer Le Postiche, toys merchant Ri Happy and furniture seller Etna, Rakuten has grabbed a major foothold in a country where online retailing has plenty of room to grow, analysts say. “Brazil is definitely hot for e-commerce,” says Jim Okamura, managing partner of Okamura Consulting, which advises retailers on multichannel and multinational strategies.
The Brazilian e-commerce market will grow rapidly over the next few years, and will increase 18% annually to $22 billion in e-commerce sales by 2016, up from $7.9 billion in 2010, according to Forrester Research Inc. “With a large retail market and nascent and urban-concentrated e-commerce today, we expect to see e-commerce and multichannel commerce grow quickly in Brazil,” says Brian Walker, an e-commerce analyst at Forrester.
E-commerce technology lags behind consumer demand in Brazil, experts say. “Retailers in Brazil are still focused on first-generation e-commerce businesses,” Okamura says.
That mix of strong growth and early-stage e-commerce infrastructure fits well with Rakuten’s plans, analysts say. In acquiring Ikeda, Rakuten took what for it was an unusual step of investing in a single e-commerce technology platform used by individual retailers, Walker says. Until now, Rakuten has primarily invested in developing e-marketplaces and networks through which multiple retailers participate as sellers and advertisers. In the United States, Rakuten-owned Buy.com operates as both a retailer and an e-marketplace.
Rakuten and Ikeda indicate they will develop online marketplaces in Brazil as well as help retailers increase their international e-commerce activities. “Ikeda is a strong player with many excellent merchant relationships,” says Hiroshi Mikitani, founder, chairman and CEO of Rakuten. “Together, we will share our expertise, and create a unique and powerful approach for merchants to not only take advantage of the exciting e-commerce market in Brazil, but also to expand their reach worldwide.”
With the long-term growth prospects of Brazilian e-commerce, however, it won’t be long before additional technology providers join the party. “In the next few years we will see many North American and European platform and service providers grow their presence in Brazil,” says Walker, who recently returned from a research trip to Europe to study e-commerce there.
In the United States, Buy.com, No. 32 in the Internet Retailer Top 500 Guide, has already leveraged Rakuten’s resources and international expertise to launch Import.Buy.com to sell to consumers in Japan and, eventually, other foreign markets.
Also at IRCE, Angus Cormie, director of e-commerce, Western Europe, consumer and small business for Dell Inc., will address international e-commerce in the June 15 session, “Dell goes global with language, content, experience and more.”