An inside look at Rakuten’s expansion and investment plans for wider Asia

Things are looking up for the region’s e-commerce scene with a recent spate of activities involving the 3 Rs — Rocket Internet, Reebonz, and Rakuten. Rocket Internet and Reebonz have come under the spotlight for their massive funding rounds, while Rakuten —  a Japanese e-commerce giant with USD 4.7B revenue — has made a USD 10M commitment to invest in startups from Taiwan, Thailand, Indonesia and Malaysia.

Although Rocket and Reebonz are somewhat known entities within the startup crowd in the region, Rakuten is just starting to make its presence felt, at least outside Japan.

To get a better picture of its regional plans, we spoke to two senior Rakuten executives: Toru Shimada (Thomas), the company’s Asia CEO, and Anh Sae Min, managing partner of Rakuten Ventures.

SGE: Where do you see Rakuten in two years?

Thomas: Rakuten will continue to accelerate our global expansion to include like-minded companies to join our family as we expand our scope, scale and geography.

We will look for partners and investments which will help us move faster than we could through organic growth, and make strategic allocations of corporate resources and active investments in high-growth areas such as e-books to generate mid-to-long term income opportunities.

For example, Rakuten brought Kobo into the fold for expertise in ebooks, Wuaki.tv for its relationships with content providers, ADS for its warehouse automation technology, and companies like Buy.com, PriceMinister and Play.com for their large, loyal customer bases.

You can expect us to continue to make similar moves. Our aim for the near future is to recreate the success we have had so far globally in more countries with our unique B2B2C “virtual shopping center” model combined with our culture-based, high-service mindset (which we call “omotenashi”).

Rakuten Asia will become an even more important and bigger driver of Rakuten’s global business.

It made the decision to invest more in Asia 5 years ago. We first expanded our Asia footprint in Taiwan in 2008, followed by Thailand the year after, Indonesia in 2011 and Malaysia in 2012. Based on our success to date and the current market opportunities, Rakuten will continue to deepen our focus and invest more in Asia in the next few years to speed up the growth of our business in the region.

We will stay committed to keeping pace with Asia’s evolving Internet landscape and become more competitive in the region and achieve our goal of becoming the number one internet service company in the world.

How do startups fit into Rakuten’s overall business strategy?

The worldwide spread of the Internet and the developing shift in social foundations across the world means that the Internet continues to be a major engine for worldwide economic growth. The e-commerce market, complemented with accelerated usage of smartphones, tablet devices and accompanying consumer lifestyle changes, will see continuous growth.

In Singapore alone, the country saw 56,778 new businesses in 2012 (according to the Singapore Department of Statistics) and the number is growing every year.