TOKYO -- Rakuten is spending $1 billion on a U.S. shopping service provider to shore itself up overseas.
The Japanese e-commerce company next month will purchase all of Ebates' outstanding shares. "We'll tackle overseas markets by bringing Ebates, which has partnered with stores in a wide range of fields, under our umbrella," CEO Hiroshi Mikitani said.
Rakuten's first move abroad came in 2008, when it opened a shopping portal in Taiwan. Since then, its annual domestic gross merchandise sales have climbed to 1.7 trillion yen ($15.8 billion), while overseas sales have reached only 6% of this figure, 100 billion yen. That doesn't say a lot for the online retail operations Rakuten has in 13 other countries and regions.
The company has created what it calls the "Rakuten Ecosystem" in Japan, combining online retail with credit card services and a point system. It has not set up similar rewards systems abroad.
Ebates is seen boosting Rakuten's overseas gross merchandise sales to 16% of the total. Rakuten also plans to use the rebate and coupon distribution system that has fueled Ebates' growth to encourage online shoppers in the U.S. to use Rakuten's website.
Consumers outside the U.S. account for about 10% of the value of Ebates' transactions.
Rakuten also owns Viber, a free chat and calling app with 400 million users around the world. It plans to link Ebates and Viber to bring in more foreign customers outside the U.S. and boost its percentage of overseas sales to 50% by 2020.
Ebates has worked with more than 2,600 businesses, including Amazon.com and eBay as well as travel companies and department store operators. So Rakuten expects to attract customers by essentially offering one of the world's largest product lineups.
Through Ebates, Rakuten will also be able to collect data from customers around the world, allowing it to fine-tune product strategies.