Rakuten looking to Taiwan and Korea for expansion

Looks like it is Japan week here are the blog. Not sure if it is because the market is entering a new phase or because I am planning a trip there for next week and am spotting more stories. Earlier in the week it was some general market statistics from iMedia Asia. Yesterday Japan's number one online travel company Rakuten caught TechCrunch's attention. Today we have another story about Rakuten - this time on their international expansion plans. Here is a link to a Google translated Japanese language story on Rakuten called "Rakuten Travel, the second half will focus on international expansion - increase in overseas bases, and strengthen customer inbound transportation"

Couple of highlights:

• This year's expansion push will be Beijing, Hong Kong, Korea and Taiwan;
• In Taiwan will be selling inventory through Taiwanese player Eztravel. [BOOT note - EzTravel is part owned by Ctrip - who in turn used to be, but are no longer, part owned by Rakuten. But back in 2007 Rakuten sold out of Ctrip and in 2008 announced further plans for pushing into China ; and
  
• To enter the US market through setting up an office in Hawaii "next month". [BOOT note - we presume this is for inbound only].

The Google translation of the article makes for challenging reading but Rakuten is making their intentions clear and are making expansion a priority.

TechCrunch on Rakuten

Just last week we were talking here on the BOOT about the Japanese online travel market. Then over the weekend TechCrunch published a very detailed and interesting profile of Rakuten called "Japan’s Rakuten: Can The Biggest E-Commerce Site You Never Heard Of Become a Threat for Amazon Globally?". The post discusses Rakuten's full ecommerce spectrum and (as per the title) their challenge to Amazon. We here in BOOT land have spoken often about how Rakuten Travel is probably biggest online travel player in Asia and one of the biggest in the world. Online travel sales for Rakuten are in the $2billion range, beating out Ctrip, Wotif, AsiaRooms or any of the Asian interations of the big four Expedia (including eLong), Travelocity (including Zuji), Priceline (including Agoda) and Orbitz (including HotelClub).

TechCrunch article is good reading, as is their CrunchBase profile page for Rakuten.

Good Japan market stats from iMedia Asia hide unfortunate market challenges

Andy Radovic of Outrider has a nice high level piece over at iMedia Asia on the Japanese search market. Called "Searching for travel, the Japan way", it is the BOOT Recommended Read of the week. Paints a very positive picture of online travel in Japan - which is fair and true. When discussing Japan it is important to know that the success of online travel in Japan is despite the fact that the online travel market has not one but two hands tied behind its back.

Firstly the two main airlines - ANA and JAL - still make it virtually impossible to conduct a search query that includes results for both carriers on domestic routes. This has crippled any efforts by intermediaries to sell air in Japan and led to the focus by the major online intermediaries (Jalan/Recruit and Rakuten) on accommodation.

Secondly I have been reliably informed that there are very strict laws on the requirements for disclosure to consumers about the cancellation policies on package sales. When I last investigated this the cancellation policy for a package tour had to be explained to a customer. That is that it had to happen over the phone or face to face rather than a consent online. If this law is still in effect, then it eliminates the "hands free" sale of group tours online. That is the sale of group tours/travel without the intervention of a sales person.

[above assumes my knowledge of JP market is still up to date - please let me know if I am out of the loop]

thanks to Hyougushi over a flickr for the photo

Ctrip may rule China - but that's not stopping Rakuten from trying

I posted last week on the Chinese market, particularly the dominance of Ctrip in "online" travel sales. A complementary story appeared this week in Hotelmarketing.com (add to your RSS feed immediately if not already there) on Rakuten Travel's plans for China.

Rakuten Travel is the number one online travel company in Japan. This makes them a big player globally. With gross bookings in excess of $1 billion in hotels, Rakuten is easily a top ten online hotel company, maybe even sneaks in as number 5 behind the "big four" of Expedia, Orbitz, Travelocity and Priceline (in terms of hotel sales online).

China is big play for Rakuten as it is the natural largest next market for them. It is also a market they have a lot of knowledge about. Up until August last year Rakuten was one of Ctrip's largest shareholders, owning some 20% of the company. At the time Rakuten disposed of their Ctrip stake I said that there was probably two reasons for the sale: the profit on the sale; and to free up Rakuten to take on the Chinese market all by themselves.

There is a lot more background in the Hotelmarketing article which I suggest you read. If you are sitting in Europe dismissing this as another Asia story by Tim I urge you to reconsider and keep a little eye on Rakuten and the number two Japanese palyer Jalan/Recruit. Why? Because both are billion dollar plus players that are looking outside of Japan for places to expand and grow.

GigaOM: Yahoo! should change its travel strategy and buy Priceline, Orbitz or Expedia

Yahoo! is in trouble. Stock is down almost a third in the last twelve months, big layoffs are coming (as many as 2,500), CEO Semel is out and many of the senior execs have followed leaving founder Jerry Yang in charge. John Battelle dug up an old quote Nov 2001 that effectively says that Yahoo has been looking for a turnaround strategy for six plus years. Even Kevin May at Travolution is worried.

Sramana Mitra guest editing on GigaOM has a post offering a number of revolutionary solutions (read acquisitions) for each of the major sectors that Yahoo! operate in, including this

"Yahoo has also made a move in online travel, but is not a top performer. Priceline, Expedia and Orbitz are all monetizing the segment. Yahoo should acquire one of them, and become a serious player."

Revolutionary to say the least but Yahoo! actually has a precedent for operating a travel retail business (rather that just a media business). In Japan Yahoo! Travel is an operating travel buseinss (also known as Tavigator) is a joint venture between Yahoo! Japan, JTB (Japan's and one of the world's largest travel companies) and uber Japanese investment house Softbank (itself an investor in Yahoo! Japan).

What do you rate the chances of this?

Yahoo! makes another travel play in Japan

Yahoo has been active in the Japanese online travel market for about seven years through its ownership of 40 some percent of the Japanese online travel site Tavigator (alongside Softbank and JTB). Not they have added a small 16.5 percent stake in content portal 4travel (thank you paidContent). Not sure what to read into the number one portal in Japan buying a non-controlling stake in a travel content company. On its face looks strange as they gain neither control nor distribution. Will need to watch what happens next.