Baidu Inc, a major Chinese language Internet search provider, and Rakuten Inc, the largest e-commerce website in Japan, yesterday announced an agreement to jointly invest $50 million over three years in a joint venture to build a B2B2C online shopping mall for Chinese-Internet users.
B2B2C refers to an online marketplace that links and provides value-added services to both businesses to business (B2B) and business to consumers (B2C).
The online mall will purportedly provide customers with high-quality merchandise from well-known Chinese and foreign brands as well as from small- and medium-sized enterprises, all at competitive prices.
Expected to go live in the second half of 2010, the companies claim the site will be the largest online B2B2C shopping mall in China. Rakuten will own 51 percent and Baidu will own 49 percent of the new joint venture.
Baidu is strengthening its challenge to Chinese e-commerce leader Alibaba Group Holding Ltd as accelerating economic growth lifts consumer demand in the world's most populous country.
Baidu CEO Robin Li said the company is expanding in non-search businesses to boost sales growth as a change in the company's paid-search system is expected to affect revenue in the first half of this year.
Founded in 1997 and currently ranked No 2 in the global B2C e-commerce market, Rakuten is a pioneer in the B2C industry. In Japan, it has approximately 60 million registered members and sales in 2008 totaled $2.7 billion.
The company operates Rakuten Ichiba, Japan's leading Internet shopping mall with over 47 million items registered on its platform and over 30,000 participating merchants, some of which have monthly turnover of more than $1 million.
Baidu, founded in 2000, is the world's largest Chinese language search engine. In addition to its Web search platform, Baidu also hosts a range of popular community-oriented products and services, such as Baidu Knows, Baidu Post-Bar and Baidu Encyclopedia.
"This is a very exciting development for Baidu," said Ren Xuyang, Baidu's vice-president of marketing and business development. "As the Chinese Internet space continues its rapid development, an increasing number of businesses and consumers are engaging in e-commerce. I believe the platform that Rakuten and Baidu build will provide users with a diversified, satisfying shopping experience while driving the broader development of China's e-commerce space."
"Baidu, with its vast reach and deep user loyalty, is the perfect compliment to Rakuten's extensive experience in the online B2C sector," commented Kentaro Hyakuno, senior executive officer of Rakuten Inc. "Through this joint venture, we also aim to create a platform that will grow alongside small- and medium-sized enterprises as well as the leading Chinese and global brands."