TOKYO -- Japanese e-commerce giant Rakuten is finalizing a deal to buy Ebates, a U.S. cash-back shopping service provider, for an estimated price tag of more than 100 billion yen ($938 million).
Rakuten is expected to acquire a majority stake in the San Francisco-based company.
Founded in 1998, Ebates runs websites offering rebates and coupons for shopping from 1,700-plus partner retailers, including Amazon.com and eBay.
Ebates operates in such markets as the U.S., Canada, South Korea and China. Although the company has not disclosed the size of its membership, more than $1.6 billion in transactions went through its sites in 2012, and consumers have gotten back more than $250 million since its founding.
Rakuten has a credit-card-linked reward point system in Japan to help retain its customer base. Lacking a similar setup in the U.S., it decided to acquire Ebates instead to lead shoppers looking for cash-back deals to the Rakuten virtual mall. By bringing Ebates under its umbrella, the Japanese company will gain access to transaction data of rival online retailers as well.
Since launching its Taiwanese business in 2008, Rakuten has come to operate in more than 10 markets, encompassing the U.S., Europe and Asia. But its overseas e-commerce transactions, totaling slightly less than 100 billion yen a year, pale beside its 1.7 trillion yen in domestic annual transactions. Raising its profile abroad has been a key challenge.
Rakuten has been actively pursuing acquisitions to expand overseas. It bought U.S. video-streaming provider Viki for about $200 million last year and messaging app provider Viber for $900 million this past February.
The global e-commerce market is expected to expand 20% this year, according to a U.S. research company.
By gaining a solid foothold in the American e-commerce market through the latest deal, Rakuten seeks to better compete against Amazon and China's Alibaba.