Rumor: Baidu and Rakuten E-Commerce Joint-Venture in Trouble, Half Staff Laid Off

Reports in the Chinese press [1] suggest that the e-commerce joint-venture between Baidu (NASDAQ:BIDU) and Japan’s Rakuten (JSD:4755) is in trouble, with it about to dismiss half of its staff, which would take the number of employees down to just 50. The rumor suggests the full team of 120 to 130 at the site, called Lekutian, was recently trimmed to around 100, and would be slashed in half in the coming months.

The Sino-Japanese shopping site – at Rakuten.cn – came online in October 2010, entering a fierce B2C online retailing environment in China with plenty of well-established, agressive players such as Tmall, 360Buy, and Dangdang (NYSE:DANG).

We contacted Baidu HQ in Beijing about this. While a representative was not able to comment on the jobs situation at Lekutian, he did dismiss whispers that the company might be trying to rid itself of its 49 percent share:

There is no truth whatsoever to rumors that Baidu is divesting from the Rakuten China joint-venture. There have been no changes to our investment in the joint-venture. We remain optimistic about the development of China’s e-commerce ecosystem.

Rakuten owns the controlling 51 percent share.

Lekutian has undergone a slight redesign of late, and seems to be trying to be more Japanese in the hope of differentiating itself from its many competitors in China – especially in the clothing market, which is a large part of its catalog of items. The site now sports the tagline “Tokyo Life Style” and there’s no sign of the Baidu logo on most areas of the e-commerce site. But the Baidu name is still visible on Lekutian’s group buy portal. Perhaps the site is trying to pivot somewhat, and look more cool.

We’ll update if we hear more on the potential layoffs.