Rakuten, Walmart’s Grocery Unit Cash In Growth In Japan

Walmart, which has been struggling in Japan for a number of years, is seeing eye-opening growth in its online food grocery delivery service, according to a report by Reuters.

Walmart’s venture into the online grocery sector is barely one year old, and it’s a partnership between Walmart’s Seiyu and eCommerce company Rakuten. 

It’s seen 30 percent sales growth from October through December when compared to a year before, when Seiyu was trying to do the venture alone, according to Rakuten Seiyu NetSuper Chief Executive Tamae Takeda.

“We’re doing even better since the start of the new year,” Takeda said.

The coronavirus epidemic may actually be helping sales, Takeda said, because “people aren’t really wanting to go out.”

The increase will help Walmart to fight its rival Amazon in the delivery sector, and it illustrates that well-planned online services with good logistics can work well for Japanese customers, who were often thought to be too choosy about freshness to ever order online.

Part of the equation in Japan is a desire for time-saving measures, as data shows that more than 70 percent of women with children under the age of 18 are in the workforce, a number that used to be 50 percent two decades ago. 

Also, aiding in Walmart’s good fortune is the fact that the partnership allows Seiyu to have access to Rakuten’s 99 million members, which has a farther reach than the company’s 333 stores in the country.

The tie-up also lets both companies handle the shrinking labor market more efficiently.

Seiyu got an early start in the eCommerce market, in 2000. That helped to put it in third place in the online grocery sector in the country, behind Aeon and Ito-Yokado supermarkets.

Takeda said that profitability for the venture was “in sight,” although it would need to grow for another couple of years.

Walmart entered Japan in 2002 and bought 6 percent of Seiyu, before taking it over entirely in 2008.