Rakuten to shut China Net 'mall'

JV with Baidu

[bill]

Rakuten to shut China Net 'mall' [japantimes.co.jp]

Japan's top online retailer, Rakuten Inc., will scrap a joint virtual shopping venture with Chinese Internet giant Baidu, citing cutthroat competition in the rapidly expanding e-commerce sector.

The two firms rolled out a virtual shopping mall called Lekutian in China in October 2010, but the venture has struggled and will be shut down by the end of May, Rakuten said Friday.

We first noted that Rakuten was working with Baidu on an online shopping mall back in 2010 [webmasterworld.com]. That mall, Lekutian, opened in October 2010 [webmasterworld.com]. Rakuten says that it will write off the entire investment.

This will probably make it difficult for Rakuten to re-enter the China market in the future. Like when eBay pulled out of Japan for similar reasons. It was never able to jump back in.

[Leggewie]

what were the mistakes made, what can be lessons learned for others? anybody know?

[bill]

I haven't seen many details. There are comments about tough competition and bureaucracy being to blame, but nothing concrete. Like the message on the rakuten.cn homepage, it's all fluff without much detail.