Rakuten Travel Sees Huge Revenue Growth in Southeast Asia and China

Rakuten isn’t all about e-commerce or its Kobo e-reader. It also runs Rakuten Travel, an online travel agency (OTA), which is popular in Japan. The company is also serious about expanding the service to Southeast Asia, with its new Rakuten Asia headquarters in Singapore established just recently.

Rakuten Travel has had offices in Thailand since June of 2008, and in Indonesia since April, 2012. In recent months, it has established offices in the Philippines, Vietnam, and Malaysia. The key function of these offices is to work with hotels in each country. Revenue growth for this division has been pretty decent so far in Southeast Asia, growing 30 percent from 2011 to 2012. A representative for Rakuten Travel declined to disclose specific revenue figures but confirmed that the base number is probably still relatively small.

Yoshihisa Yamada, the vice chairman at Rakuten Travel said at a press conference today that the OTA site currently mainly serves outbound Japanese travelers. In other words, after tying up with hotels in Southeast Asia, the content and bookings are available in Japanese to the bulk of Rakuten Travel’s customers. But as time passes, Rakuten Travel will promote itself within Southeast Asia to acquire users here.

Though Rakuten had to pull out of its e-commerce venture in China, its Rakuten Travel operations (through an acquisition of Etpass in 2011) seem to be doing well. Sales for Etpass were dipping until Rakuten took over in 2011. Yamada says that Etpass is a good company but was just having trouble with its management. Besides the typical SEM and SEO execution, Yamada also said that Qunar, the Baidu-owned travel meta-search site, helps bring in a lot of sales.

When it comes to expansion, I think Rakuten is better off working alone or acquiring companies to set up its base. Tarad and Etpass are working okay. But its joint ventures in China (with Baidu) and Indonesia (with MNC Media) have dissolved, leaving the company with the challenge of regrouping and rethinking its strategy in those regions.