Rakuten, the Japanese e-tailer, is unlikely to launch its operations in India anytime soon, weighed down by the recent developments in the sector, like the staff retrenchment at Snapdeal, companies like Stayzilla shutting shop and the impending entry of Chinese giant Alibaba. The Japanese e-tailer which earlier had plans of launching its India operations by end of 2016 has taken a very cautious view in light of these recent developments in the Indian e-commerce sector, people familiar with these changes told FE.
It is understood that they are still weighing the pros and cons of the Indian e-commerce market as it has not grown on the expected lines. “The corporate plans of Rakuten seems to be put on hold,” a source told FE. The Indian e-commerce market has also shown signs of slowdown. According to RedSeer Consulting, the e-commerce industry in India which grew by 180% in 2015 crashed to mere 12% growth in 2016. The sector will now have to clock a 45% CAGR to reach a size of $80 billion by 2020 from the current level of $14.5 billion.
In response to an e-mail query, a spokesperson from Rakuten said, “India is a vibrant growth market and a great source of top talent and ideas for us at Rakuten. We will continue to expand our development activities in India through the recruitment of great engineering talent and although we are always interested in new global opportunities for growth, we don’t have any updates on new business developments in India at this time.”
Rakuten which has presence in multiple geographies across the globe had been looking at introducing two business models in the country – the conventional B2C e-commerce and a cash back set up. It had also been holding talks with a few of the affiliate players.
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In 2014, the Japanese e-tailer opened Rakuten India Development and Operations Center (RIDOC) in Bengaluru. The company has also appointed Sachin Dalal, co-founder of e-commerce website Infibeam, the first e-commerce company in the country to have gone public, as its India head.
Started in 1997 as a small online marketplace in Japan, Rakuten has operations across several markets including the US, UK, Germany, Brazil, Spain, Malaysia, Taiwan and Indonesia.