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RakuBai set to ride the Baidu wave for growth

0 CommentsPrint E-mail China Daily, August 9, 2010
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Chinese Internet giant Baidu Inc's joint venture RakuBai on Friday said it expects nearly 100 million users to utilize its e-commerce site for online shopping over the next three years.

That in turn may help the company in a long term influence dominate position of Alibaba.com's e-commerce company Taobao in China's online shopping services market, said experts.

"We anticipate the Chinese online users to surpass the Japanese numbers within three years after our services go online," said Koichi Nakamura, chairman and chief executive of Beijing RakuBai Network Technology Co Ltd.

RakuBai is a joint venture set up by Baidu and Japanese online retailer Rakuten Inc in January this year. Rakuten has nearly 80 million online users in Japan.

China's gross domestic product will surpass the United States within the next 25 years, said Nakamura quoting a recent Goldman Sachs report. The focus of the global economy will shift from the United States to China, he said.

"We are here to expand and tap the country's huge e-commerce market potential," he said.

The company has already started promoting its services through a slew of promotions. Nakamura said he expects a large number of busineeses to open online stores on its shopping site, slated to commence operations in the next quarter.

Rakuten will bring its e-commerce experience in Japan to China and also come out with reward programs for customers along with other promotional activities. The company will implement stringent quality control standards and hopes to gain sizable numbers from Baidu's, said Nakamura.

At the same time the company, which currently has 100 employees, will look to boost hiring in China. Much of its revenue is expected to come from sales commissions and advertising fees.

Taobao is the dominant player in China's business-to-customer industry, and had a 76 percent share of the market in the first quarter of the year, said domestic research firm Analysys International. In 2009, the business-to-customer sector in China was about 22 billion yuan ($3.25 billion).

"In the long run, Taobao's top slot will come under threat, as more and more big players enter the market," said Cao Fei, an information technology analyst with Analysys International.

China's Internet users reached 420 million as of June this year, according to the China Internet Network Information Center.

The number of online shoppers in the nation was around 142 million, up 31.4 percent from six months earlier.

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