Softbank Corp (USA) (SFTBY) Is Focusing On E-commerce With New Investment


Softbank Corp (USA) (OTCMKTS:SFTBF) has diversified itself from just being a telecom firm with a clear-cut focus on e-commerce business. Its investment in Alibaba Group Holding Ltd (NYSE:BABA) is well known and the company was a joint shareholder of Yahoo! Inc. (NASDAQ:YHOO)’s Yahoo Japan. Now the company has invested a mammoth $1 billion in Coupang, a Korea-based e-commerce company.

Creating A Big E-Commerce Network

Though Softbank Corp (USA) (OTCMKTS:SFTBF) has been investing in different sectors, e-commerce occupies a bigger slice of share thus indicating that the company was keen in establishing a big e-commerce network in Asia. In India, the company led a $627 million round investment in Snapdeal, which is an e-commerce firm that is growing fast, techcrunch.com reported.

Softbank Corp (USA) (OTCMKTS:SFTBF) also appeared to be calculative in choosing or promoting a specific vertical. For instance, the company was keen to develop a rival to Uber in Asia. That resulted in investment in Ola in India, Didi Dache in China and GrabTaxi in Southeast Asia. However, the largest investment seemed to have been in the Korean company, clearly indicating the company’s optimism for the e-commerce sector in Asia. Currently, the investment in Coupang is worth about $5 billion.

Wake-up Call

Goodwater Capital’s co-founder, Eric Kim, told TechCrunch that the agreement was nothing but a wake-up call. He said that  times have changed and so is the case in respect of innovation that was changing globally in nature. Coupang co-founder and CEO, Bom Kim, said the company was sitting on a big pile of cash following the $400 million fund raising exercise from Sequoia investments and Blackrock last year. This might be contrary to the general assumption that e-commerce companies were capital intensive one and the $1 billion meant burning of some serious cash.

Outlook For E-Commerce

Softbank Corp (USA) (OTCMKTS:SFTBF) has been well aware of the growth and expansion opportunities while investing in companies. For instance, Softbank knew that Coupang was keen to establish a next-generation firm and the company’s CEO said that it wanted to be one of the great companies. The company’s CEO claimed that it was leading the trends in terms of trends in many ways.

According to criteo.com, e-commerce witnessed an impressive growth rate last year on goods and services worth about $1.5 trillion through shoppers via desktops. The share of mobile is expected to reach 40% of e-commercial deals with e-commerce transactions in the current calendar year 2015. This was higher than the earlier outlook of 35%. Developing markets provide better opportunities for growth for Softbank Corp (USA) (OTCMKTS:SFTBF). The company also already spent nearly $2 billion in creating e-commerce portfolio. There is no guarantee that the company will not invest further into the vertical.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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