Walmart and Tokyo-based Rakuten, have announced a strategic alliance that includes the launch of a new online grocery delivery service in Japan.
Partnering with a global ecommerce leader
The alliance aims to optimise each company’s strengths and assets to expand their reach to new consumer groups. Founded in 1997 as an online marketplace, Rakuten has expanded to offer services in ecommerce, fintech, digital content and communications to more than 1bn members globally.
Delivery service will expand Walmart’s grocery footprint
The online grocery delivery service, “Rakuten Seiyu Netsuper,” will launch in the third quarter of this year. The aim will be to offer a more convenient shopping experience that meets the changing needs of customers in Japan. The service will aim to increase capacity with the establishment of a dedicated fulfilment center, in addition to offering deliveries from Walmart’s Seiyu stores. It will replace the existing grocery service which Seiyu has operated for over 15 years, and help Walmart to expand its grocery reach in Japan, a country where its stores numbers have been relatively static for several years.
Optimising Rakuten’s ecommerce expertise
With a focus on fresh, the online offer will include cut vegetables, partially-prepared foods and ready-meal kits, as well as local gourmet products from merchants on the Rakuten Ichiba marketplace. The new service will also utilise Rakuten’s deep expertise in ecommerce to offer an optimised user experience, as well as leveraging big data and AI to offer a more personalised offering. Customers using the new service will be able to earn and use Rakuten Super Points, also allowing them to use their points on more than 70 services within the Rakuten ecosystem.
Taking on Amazon with new eBooks capability
In addition, Walmart and Rakuten Kobo Inc. have formed an exclusive retail alliance that will enable Walmart to begin selling eBooks and audiobooks, as well as Rakuten Kobo eReaders, in Walmart stores and online at Walmart.com in the US starting later this year. As one of the country’s largest booksellers, a digital platform will enhance Walmart's strengths in the category, both in-store and online. This move pitches it directly against Amazon and its Kindle e-reader. The Kobo reader has grown to be the second largest eReader globally, but has a limited presence in the US. Selling the units through Walmart's stores should help to grow penetration, but it will be difficult to challenge Amazon's leadership in this area.
A new approach to win with ecommerce at Walmart
Although different to the partnership with JD.com in China, which saw Walmart take an equity stake in the business, this deal also demonstrates a new approach to ecommerce within the business. Along with the acquisition of Jet.com in the US in 2016, the retailer has shown a strong willingness to work with leading digitally-orientated companies in the spaces where it seeks to build stronger businesses. As one of its more mature markets, growth in Japan has been relatively low. However, this alliance with Rakuten should enable it to build a leadership position in the grocery ecommerce channel, and deliver stronger growth, while minimising capital requirements, and the need to build additional stores.
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Stewart Samuel, Program Director, IGD Canada: based in Canada, Stewart heads up all of IGD's research and coverage on Walmart. He is also responsible for shaping IGD's research program across North America. Contact Stewart at [email protected] for further insight on the region's markets, channels and retailers. Follow Stewart on Twitter: @Stewart_IGD