Walmart Announces Strategic Alliance with Rakuten

Walmart Announces Strategic Alliance with Rakuten

Walmart Announces Strategic Alliance with Rakuten

Shares of Walmart rose in pre-market trading on Friday after the company announced a deal with Japanese e-commerce site Rakuten to sell Rakuten's Kobo e-readers and content in the U.S. mass market.

Home to more than 75 million online shoppers, the country has the world's third biggest ecommerce market after the US and China.

The new online grocery delivery service, dubbed "Rakuten Seiyu Netsuper", is to be more convenient for shoppers and offer an expanded assortment of items like meal kits and cut vegetables, the companies said.

"We look forward to expanding our grocery footprint in Japan and launching a new offering of e-books and audiobooks for our customers in the U.S.".

The Japanese deal adds up to Walmart's online grocery delivery efforts in the U.S. It is trialing grocery home delivery with companies like Uber, Lyft, and Deliv, and provides online grocery pickup at more than 1,100 stores.

The deal - which Walmart's chief executive, Doug McMillon, flew to Tokyo to announce - will allow Walmart's online grocery business in Japan to expand exponentially.

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"As global leaders in e-commerce and offline shopping, Rakuten and Walmart are uniquely positioned to empower our customers around the world with innovative services", said Rakuten's CEO Hiroshi Mikitani.

"We are excited to partner with Walmart because of its commitment to creating the best solutions to serve customers with low prices". The service will aim to increase capacity in 2018 with the establishment of a dedicated fulfilment center, in addition to offering deliveries from Seiyu stores. Walmart's US online sales rose 50% in its most recent full quarter.

The new service will be powered by Rakuten technology, using artificial intelligence "to offer a more personalized merchandise offering", according to the statement. Walmart also plans to sell "e-book cards" in its stores, which seem to be physical cards customers can buy while shopping at a Walmart store that contain a download code for access to an e-book or audiobook after they leave the store.

Rakuten and Walmart said all e-book content will be accessible through a co-branded application available on iOS and Android devices, as well as a desktop app and on Kobo e-readers. In 2016, Japan was the second-largest market outside the US for Amazon, following Germany, with sales of $10.8 billion.

Kobo is a Rakuten subsidiary.

Walmart is to become the exclusive retailer of the Kobo brand in the United States, and will begin offering Kobo's about 6 million e-book and audio book titles later this year.

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