"Thailand is a strong market that we expect to use as a springboard to jump into Asean countries in the future. Rakuten is an e-commerce consulting company. We will help Thai SMEs benefit from our technology, platform and services," Hiroshi Mikitani, chairman and CEO of Rakuten, said yesterday.
The deal was two years in the making. The value of the joint venture has not been disclosed yet.
The move is Rakuten's second step into the overseas market, following Taiwan last year. Rakuten ranks as the eighth-largest global Internet company by market value.
"Thailand has huge potential in e-commerce business in terms of growth and Tarad.com is a good local partner in helping the company to expand its business to the Thai market and to extend to the Asean market," Mikitani said.
Rakuten was committed to making the huge investment needed to increase the efficiency of Tarad.com's business capability, he said, but declined to unveil the actual budget.
Rakuten will send three executives to oversee Tarad.com's business direction. The first is Toshiya Matsuo, who will become the CEO, followed by two managers.
Pawoot Pongvitayapanu, Tarad.com's founder, will stay on as managing director.
Matsuo said the Japanese company would bring know-how and technology as well as capital to lift Tarad.com's business capability and competitiveness, as e-commerce is playing an important role in boosting the country's economic growth.
"Thailand is the fastest growing in Asean in terms of e-commerce business, but the total e-commerce business is eight to nine times smaller than Japan. We see the huge potential to increase e-commerce in Thailand to be bigger by eight to nine times in the future," he said.
There are a couple things that the company needs to improve in Tarad.com, such as the payment platform and technology facilities and support, in order to turn it into a regional and global player, he said.
Pawoot said the joint venture would combine the strength of the two partners to help leverage Thailand's e-commerce business to take a big leap forward in expanding to the world market place with the stronger resources.
"This joint venture will make a difference in e-commerce development in Thailand. By next year, we will launch a new e-commerce business model in Thailand. Huge benefits will be returned to Thai SMEs and the country's economy as the whole," he said.
Tarad.com hosts 160,000 online merchants carrying 1.6 million items. It expects to increase its merchant accounts to 183,400 by the end of the year. Tarad.com next year is conservatively expected to grow at 40 per cent, he added.
Rakuten has about 30,000 online shops and 40 million product items.