Eventual takeover of Japan business to be model for firm's overseas expansion, says expert Alibaba.com, the mainland's largest business-to-business e-commerce company, is likely to acquire a newly formed joint venture with telecommunications and media firm Softbank Corp in line with its international expansion strategy. The Hong Kong-listed internet company, a unit of Alibaba Group, last Thursday launched the venture - Alibaba.com Japan - in a bid to accelerate its expansion in the country and take over the operations of Alibaba.com's existing Japanese-language website ( www.alibaba.co.jp ). The site connects Japanese small and medium-sized enterprises (SMEs) with buyers and suppliers around the world. Jason Brueschke, the head of Asia internet and media research at Citigroup, said Alibaba.com would eventually buy out the Japanese venture - 'probably in three to four years' - after it became profitable, and then merge it into the company's overall operations. That move is expected to be the model for future overseas expansion initiatives by Alibaba.com, according to Mr Brueschke. Alibaba.com also has established operations in Hong Kong, Taiwan and India. In an earlier interview, Alibaba.com chief executive David Wei Zhe said: 'In expanding overseas, we will always work with local strategic partners.' Mr Brueschke noted that Alibaba.com's likelihood of success in Japan will increase with Softbank's help. Softbank controls Yahoo Japan, which is the country's largest online portal and internet search engine operator. 'Softbank can increase the credibility of Alibaba.com Japan among the country's small and medium companies. Softbank can also help Alibaba.com to understand local culture and how industry supply chains are arranged,' Mr Brueschke said. Japan has more than four million SMEs, whose businesses account for 25 per cent of the country's total annual export value and 63 per cent of its total import value. Since 2006, the mainland has surpassed the United States to become Japan's largest trading partner. 'It would be in Softbank's best interest to eventually sell its stake to Alibaba.com, probably for a huge profit. But Softbank will still have influence over the operation, as the company controls about 39 per cent of parent company Alibaba Group,' Mr Brueschke said. Alibaba.com Japan's mission is to promote trade between the country and the mainland, with a focus on helping Japanese businesses open up new trade channels worldwide. With more than one million product listings and over 75,000 members, Alibaba.com Japan's portal is already a significant gateway for the mainland to trade with Japan. 'But that is still very small compared with its potential,' Mr Brueschke said. The company had its soft launch in December. Out of Alibaba.com's 28,548 premium gold supplier members, 10,000 have opted for paying extra fees to have their online stores in the Japanese site. 'We expect Alibaba.com Japan will create new business opportunities and stimulate big changes in the Japanese market,' said Softbank chief executive Masayoshi Son at the joint venture's launch last week. Softbank made an initial capital outlay worth about US$20 million for a 65 per cent stake in the joint venture. Alibaba.com, which contributed the Japanese website and local operations, controls the rest. 'Softbank has been a strategic investor in the Alibaba Group for many years, and this agreement is a natural extension of our strong relationship,' said Alibaba.com chairman Jack Ma Yun. About 100 Alibaba.com staff, 30 of whom are based in Japan, worked on the Japanese-language website. Mr Wei said: 'As a general rule, Alibaba.com will not make any cash investment [in an overseas joint venture]. We prefer to inject our platform and manpower.' Softbank executive Makoto Kouyama will serve as the Japanese joint venture's chief executive. Sun Jiong, the previous head of Alibaba.com in Japan, has been named chief operations officer. Founded in 1999, Alibaba.com runs an English-language marketplace ( www.alibaba.com ) and a Chinese-language marketplace (www. alibaba.com.cn) focusing on suppliers and buyers trading domestically on the mainland. Combined, those marketplaces form a community of about 30 million registered users from more than 240 countries and territories.