Warc, 28 April 2014
NEW DELHI: Japanese e-commerce giant Rakuten is reported to be looking to enter the Indian market in the next six to eight months and is also said to be exploring the possibility of starting a travel and hospitality portal in the country.
According to sources cited by Live Mint, the company is considering the logistics sector as its entry base and is seeking a strategic partnership or acquisition to further its ambitions.
If Rakuten does enter the Indian e-commerce market, which was estimated to be worth $13bn at the end of 2013, then it would join other international online traders, such as Amazon, eBay and China's Alibaba.
A report last year from auditors KPMG and the Internet and Mobile Association of India (IAMAI) estimated that travel-related business accounted for 71% of the Indian e-commerce market.
With its extensive involvement in travel services, including online hotel reservations, analyst Mukul Singhal, a principal at Saif Partners, said the hospitality sector would be a good fit.
"The outlook for this segment is very high," he said. "Every company in the travel space is looking to invest in hotel bookings and packages because airline ticketing does not make much money.
"Hotels [are] currently a fragmented space in India, just like Brazil, where we have a lot of unorganised inventory," Singhal added. "There is definitely a need for someone to solve that problem in the country."
Data sourced from Live Mint; additional content by Warc staff