eBay Rival Rakuten to Close UK and Spain Marketplaces

Rakuten will close its UK and Spanish marketplaces as part of a major restructuring in Europe, it announced today. The Rakuten marketplace was founded in Japan and it initiated an international expansion spree in 2008 that has ultimately failed to fulfill the company's vision for a global marketplace.

Rakuten acquired US marketplace Buy.com in 2010 for $250 million and acquired UK marketplace Play.com in 2011 for 25 million pounds, later rebranding Buy with the Rakuten name and shuttering Play as it launched the Rakuten UK platform. Some UK sellers discussing today's announcement said the rebranding had not made sense, others complained of the fee structure. They cited dismal sales and called the announcement unsurprising.

The closure of Rakuten UK is a major blow to its global B2B2C strategy - in 2014, the company had said it planned to invite merchants from across parts of Europe and Asia to start selling through the platform, promising a more local experience with more options such as local payment methods and local language content.

In February of this year, news came that Rakuten planned to close a number of global operations including in Singapore, Malaysia, and Indonesia; last month, Rakuten entered into a partnership with eBay in Korea and Japan.

The UK and Spanish sites are expected to close by the end of August. "Timely information and support will be provided to merchants and customers to ensure that all transactions on current sites can be fully completed," the company wrote in its announcement.

"Rakuten will continue to evolve the ecommerce business model in countries across Europe, including initiatives such as the launch of a new Price Club to enhance membership loyalty in France and Rakuten Pro in Germany, a low-commission model for merchants aimed at enhancing service quality. Rakuten will also continue to grow its presence in Europe across its diverse business portfolio, from ecommerce to digital content businesses such as Wuaki and Kobo, to the Viber messaging platform and the adtech business Rakuten Marketing."

Update: A spokesperson told EcommerceBytes, "We will continue to invest in operations France and Germany as the businesses there have the scale and potential for sustainable growth. However, In UK and Spain, the cost of growth relative to the size of the businesses has led to plans to close these operations."

Look for more information in Wednesday's Newsflash.

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