Japanese e-commerce giant Rakuten Inc is closing its local joint-venture online business by selling its entire shareholding stake in Tarad.com, Thailand's largest e-commerce company.
The closure is part of its Southeast Asian strategic overhaul designed to focus on consumer-to-consumer and mobile business models for e-commerce and other businesses, said Pawoot Pongvitayapanu, founder and managing director of Rakuten Tarad.com.
Rakuten previously focused on business-to-business and business-to-consumer models allowing online merchants to post their products selling directly to consumers.
The company holds a majority stake of 67% in Tarad.com and Mr Pawoot the rest.
"Rakuten is in talks with an undisclosed Thai e-commerce company to acquire its total stake in Tarad.com," said Mr Pawoot. A deal is expected this month.
Rakuten acquired the shares from Tarad.com in 2009 for US$3.35 million.
Tarad.com had an accumulated loss of 117 million baht in 2013, worsening from losses of 35 million in 2010 and 5.6 million in 2009.
Mr Pawoot said Tarad.com would continue business as usual, preparing to implement a strategic shift following the new shareholding structure.
He acknowledged Thailand's e-commerce market could see a bubble due to fierce competition from several new foreign players.
The local e-commerce market is still in the early stages with high potential growth compared with other markets in developed countries, he said.
Rakuten earlier said it would close its e-commerce marketplaces in Singapore, Malaysia and Indonesia as part of its strategic overhaul. The closure will affect 150 employees.
Tiwa York, chief executive of Kaidee.com, Thailand's leading online classified ad market for second-hand goods, said the local e-commerce market was fiercely competitive.
Thailand has 44 million internet users, a significant level for e-commerce, he said.
Consumer-to-consumer sales, a market that allows customers to sell goods and services to each other, is gaining popularity online.
Mr Tiwa said Kaidee.com expected mobile traffic on its online store to account for 80% of total traffic this year. Last year, Kaidee.com saw an increase of 1 million new sellers with 7 million visitors a month.
He believes Thailand's e-commerce market has tremendous growth potential.