Japan's Rakuten to shut China online shopping mall
Japan's top online retailer Rakuten said Friday that it was ending a shopping venture with Chinese Internet giant Baidu, blaming "intensified competition" in the growing e-commerce sector.
The pair rolled out a virtual shopping mall called Lekutian in October 2010 for the Chinese market but it has struggled and will be closed by the end of May, the Japanese firm said.
China has the world's largest online population with more than half a billion users.
"In the face of intensified competition in the Chinese e-commerce industry, Lekutian did not perform in line with our expectations," Rakuten said in a statement.
"Following careful deliberation, both Rakuten and Baidu determined that closing Lekutian was in the best interest of all stakeholders," it added.
When Lekutian was announced, the pair said they planned to invest about $50.0 million over three years in the project, part of Rakuten's plan to expand its global operations.
On Friday, the Japanese firm said it expected the move to have little impact on its earnings, and said it would continue with other businesses in China, including an online travel agency.
(c) 2012 AFP