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Walmart teams up with major Japanese e-commerce player Rakuten (WMT)
BI Intelligence
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Walmart has partnered with Rakuten, one of Japan’s leading e-commerce companies, to enable the companies to work together in both Japan and the US, according to a company blog post from Walmart.
Rakuten and Walmart subsidiary Seiyu GK will work together to offer an online grocery delivery service in Japan. The service, which will be called Rakuten Seiyu Netsuper, is planned to launch in the second half of 2018. Japanese consumers spent $19 billion on food deliveries in the year ended March 2017, according to Yano Research Institute as cited by The Wall Street Journal, creating ample opportunity for the new joint venture to succeed. Seiyu currently offers a grocery delivery service, which will be rolled into the new service, meaning that the new offering won't have to start from scratch. The upcoming offering will fulfill orders from Seiyu stores as well as from a new fulfillment center, and will feature produce, meal kits, and products from merchants on Rakuten’s marketplace. Rakuten will use its e-commerce expertise to create a site for the service that will utilize AI and data analytics.
In the US, Walmart will offer e-books and e-readers from Kobo, a division of Rakuten. Walmart will become the exclusive mass retail partner of Kobo in the US, giving it the ability to sell Kobo’s millions of titles in e-books and audiobooks, which will be available on Walmart.com later in 2018. All Kobo content will be available through a Walmart and Kobo app, which users will be able to access on mobile devices, desktops, and Kobo e-readers. Competing in e-books may be difficult for Walmart and Kobo, as Amazon controlled over 83% of e-book sales in the US as of February 2017, while Kobo accounted for just .3%. The gap between the two is smaller in Canada, where Amazon took about 57% of sales and Kobo had nearly 25%. With this new partnership, the companies are likely hoping to bring the success Kobo found in Canada to the US.
Strategic partnerships with major e-commerce players is one way Walmart is trying to improve its digital standing. Walmart has been growing its e-commerce capabilities with acquisitions and technological developments of its own, but it appears to be looking to partner with other companies to help it grow. It previously partnered with Google to sell its products on Google Express and Google Home, and this new agreement with Rakuten could mean that it plans to continue looking for such partnerships.
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