Japan's Rakuten to Set up Chinese E-commerce Site With Baidu

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Japanese e-commerce company Rakuten took another step on Wednesday toward expanding outside its home market with a deal to jointly develop an online shopping mall in China with Baidu.com, the country most popular search engine.

The three year deal puts Rakuten and Baidu squarely in the path of Alibaba.com's Taobao Web site, which dominates e-commerce in China. Taobao offers online auctions, where individuals can sell their products online, as well as an online shopping mall for merchants.

Rakuten and Baidu will jointly invest US$50 million to build an e-commerce site targeting both retailers and Chinese consumers. Rakuten will own 51 percent of the venture, with Baidu holding the balance.

"The online mall will provide customers with high-quality merchandise from well-known Chinese and foreign brands as well as small and medium-sized enterprises at competitive prices," the companies said in a press release, adding they expect the site to be ready for business during the second half of this year.

The deal with Baidu.com adds further momentum to Rakuten's plans to expand outside Japan, where its Rakuten Ichiba site offers products from around 30,000 merchants.

In 2008, Rakuten opened a version of its Rakuten Ichiba site in Taiwan through a joint venture with President Chain Store, which operates 7-Eleven convenence stores and Starbucks coffee shops, among other chain stores. Last year, Rakuten acquired a 67 percent stake in Tarad.com, an online shopping mall in Thailand.

In addition to the deal with Rakuten, Baidu operates its own consumer e-commerce site, called Youa.

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