Japan-based Rakuten and Baidu have reached an agreement on the establishment of a joint venture through which the two companies jointly operate an Internet shopping mall in China.

The two companies plan to create the joint venture with capital of approximately ¥4.3 billion (total for the first 3 years, 1 RMB=13.11JPY ). Rakuten will own a 51% shareholding and Baidu 49%.

Rakuten and Baidu intend to begin providing services through the new company in the second half of 2010, subject to grant of related licenses and permissions from authorities. By combining Baidu’s excellent marketing capabilities in China with Rakuten’s e-commerce platform technology and consulting expertise, the two companies aim to develop this new one-stop service into the leading B2C Internet shopping mall in China. Initially, wide variety of goods will be sold to Chinese consumers at competitive prices by small and medium sized enterprises as well as the leading Chinese and global brands. In the future. Rakuten and Baidu will also consider the sale of items from Japanese merchants under a tie-up with Rakuten Ichiba in Japan.

Founded in 2000, Baidu is the world’s largest Chinese language search engine. In addition to its web search platform, Baidu also hosts a range of popular community-oriented products and services, including Baidu Knows, Baidu Post-Bar, Baidu Encyclopedia, and many others.

Rakuten is a full-line Internet service company in Japan. It operates Rakuten Ichiba, Japan’s leading Internet shopping mall, and is ranked 2nd in the global B2C e-commerce companies.