Fri, Nov 30, 2007 - Page 12 News List

President Chain, Rakuten team up for online mall

By Kevin Chen  /  STAFF REPORTER

President Chain Store Corp (統一超商) yesterday signed an agreement with Rakuten Inc, Japan's largest Internet shopping mall operator, to form a NT$174 million (US$5.39 million) online shopping venture in Taiwan.

The venture will be the first cross-border collaboration for the firm and the Uni-President Group in 30 years, Lillian Lin (林立莉), a public relations manager for President Chain, said yesterday.

It will also be the first Rakuten-backed virtual mall to operate outside Japan, Lin said by telephone.

President Chain, which runs the nation's biggest convenience store chain with 4,600 7-Eleven stores, will hold a 49 percent stake in the venture while Rakuten will own the remaining 51 percent, according to a statement issued after the signing ceremony.

The new online shopping site will begin operations in the second quarter of next year and aims to break even in its second year, the statement said.

The site hopes to attract up to 3,000 virtual stores within three years, it said.

Lin declined to comment on the new online business' earnings prospects, but said that the company was upbeat given the rising popularity of the local online shopping market.

Total turnover for the online shopping market is expected to grow 36.4 percent to NT$252.9 billion next year, from NT$185.4 billion this year, the Market Intelligence Center said in a report released last month. That includes NT$108 billion in the business-to-consumer business and NT$77.4 billion in the consumer-to-consumer segment, the Taipei-based researcher reported.

President Chain posted NT$3.27 billion in profits in the first three quarters of the year, up 20.85 percent from a year earlier.

Shares of President Chain rose NT$3.10, or 3.72 percent, to NT$86.5 on the Taiwan Stock Exchange yesterday. The stock has risen 9.92 percent year to date.

While Taiwan's market scale is much smaller than that of Japan and President Chain is a latecomer in the business, Lin said that the new site has an edge in offering goods that could be easily shipped between Taiwan and Japan.

The signing ceremony was attended by Uni-President Group CEO Jason Lin (林蒼生) and his Japanese counterpart, Rakuten chairman and CEO Hiroshi Mikitani.

Mikitani said Rakuten would start with Taiwan as part of the Japanese online shopping site's internationalization effort.

Founded in 1997, Rakuten has more than 20,000 virtual stores and plans to explore two to three overseas markets next year, he said, without elaborating.

President Chain operates nearly 40 subsidiaries in Taiwan. Besides the 7-Eleven chain, it also runs Starbucks coffee shops, the Web-based bookseller (博客來) and Cosmed (康是美) cosmetics and drugstores. Other subsidiaries include Japanese home-delivery service Takkyubin and pastry shop Mister Donut.

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