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Baidu and a Japanese e-commerce operator called Rakuten plan to establish China’s largest online mall in Beijing’s Tongzhou district. 

Early this year the two companies announced they would invest US$50 million (NZ$69 million) for three years to create this online mall, in which Rakuten holds a 51% stake and Baidu 49%, according to ChinDaily.com. 

The JV is named Lebai Online Technology Co., Ltd. Koichi Nakamura, the former COO of Rakuten will be the company’s chief executive officer. 

The Sino-Japanese venture is expected to begin operations in July by following Rakuten’s successful model of hosting large retail companies and supplying small- and medium-sized enterprises with e-commercial services as well, as advertising, online payment and logistics. 

Ren Xiaoxu, vice president responsible for Baidu’s business expansion, was quoted as saying the Chinese search engine will help small- and medium-sized enterprises market themselves by providing them with an e-commerce platform. 

Tongzhou was picked as the JV’s location because of the preferential policies offered by the local government. Tongzhou is the location for many developing e-commerce enterprises. The district authorities not only provides tax and finance support to e-commerce companies registered in the area, but also gives special awards for attracting talent. 

Established in 1997, Rakuten is among Japan’s biggest commercial company. Its business volume hit 1 trillion yen (NZ$14.7 billion) last year. 

Statistics from China Internet Network Information Center showed that China’s online trade in 2009 reached 248.35 billion yuan (NZ$50.32 billion), up 93.7%t from 2008, and is expected to reach 1 trillion yuan in 2013.

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