Rakuten acquires Play.com for £25 million
Japanese e-tailer buys 100 per cent of online store's stock
Rakuten, a Japanese online retail concern, has announced the purchase of 100 per cent of stock in Play.com for approximately £25 million, making it the third European e-commerce site acquired by the company.
Rakuten acquired French business PriceMinister in 2010 and German online retailer Tradoria in July of this year. As a whole, Rakuten operates online business in ten countries globally.
"The UK market is one of Europe's largest and most mature e-commerce markets. Play.com is not only a pioneer in the market, but also one of the UK's most successful e-commerce businesses," said Rakuten CEO Hiroshi Mikitani.
"We aim to leverage our e-commerce strength and experience to further expand and develop Play.com's business model and channel its loyal user base, merchants, and deep product offerings into Rakuten's global e-commerce network."
The UK has the largest e-commerce market in Europe, with a value expected to exceed $58.0 billion and 55 million users by 2014.
FT Link http://www.ft.com/cms/s/0/6bc99342-a270-...
Considering play.com is the UK's 6th biggest e-retailer, I think there is more to this deal then they have published, maybe some equity in Rakutan for the shareholders?
Bit sad to see yet another good British business bought out by a larger overseas company, but such is the nature of capitalism.
"Rakuten, Inc. operates and manages business to consumer electronic commerce
site, Rakuten Ichiba, and consumer to consumer auction site, Rakuten Freemarket.
The Company generates sales from system service fees and advertising fees from
electronic commerce companies listed on its web site."
"Rakuten's 2005 revenues exceeded US$1.1 billion with operating profits of approximately $320M. The company is publicly-traded (JASDAQ: 4755) with a market capitalization ranging from $5B+ and more than 3,700 employees. Rakuten is among the top 10 largest Internet companies in the world "
Personally I think closing of the VAT loophole is a factor but not necessarily the most important. Assuming the loophole is closed Play will remain competitive against bricks & mortar retailers and also have more buying power & customer intelligence than many online retailers.
My gut instinct is compared to other online retailers Play may be overdependent on physical sales of DVD, Games & Music which are declining or moving to alternative models - F2P etc.