Japan Business News: Walmart To Sell:

 https://mainichi.jp/english/articles/20201116/p2g/00m/0bu/070000c 

Article:

TOKYO (Kyodo) -- U.S. retail giant Walmart Inc. said Monday it will sell a majority stake in its wholly-owned Japanese supermarket unit Seiyu GK to American investment company KKR & Co. and Japanese e-commerce firm Rakuten Inc. in a 172.5 billion yen ($1.6 billion) deal.

KKR will acquire 65 percent of Seiyu and Rakuten will take a 20 percent stake through a newly created subsidiary to accelerate the retailer's digital transformation. Walmart will retain the remaining 15 percent stake.

The transaction is expected to be completed in the first quarter of 2021.

Ideas and Commentary:

This really is not unexpected as many foreign retail businesses and food type businesses have come and gone in the Japan.

Before Walmart for example the French retail giant Carrefour entered the Japanese retail market but left after a few years. The same maybe can be said for Tesco from the UK..

Both Carrefour and Tesco also tried to enter the South Korean market but left eventually, as supposedly their revenue or profits were not what was expected.

Of course there are many cases of foreign businesses that have been able to enter and remain in Japan, having been able to understand the Japanese customer and business practices while many have not been able to survive. 

I remember years ago when Walmart first entered the Japanese retail and supermarket market in Japan. 

The layout of the Walmart stores in the US and in Japan maybe were not exactly the same and of course the food culture is somewhat different. 

Walmart had to learn what the preferences were for Japanese customers compared to US customers. Two different food cultures, not to mention how stores were arranged and displayed. 

And then the important idea of customer service in Japan. Walmart is/was considered a discount chain, and as such most likely customer service is not the highest priority in the US Walmart stores, while in Japan customer service is a given and very much expected.

Article:

The companies said they aim to grow online shopping through the partnership and introduce a new cashless payment option. Seiyu became a subsidiary of Walmart in 2008 and now operates over 300 stores in Japan, according to its website.

"We will focus on working closely with Seiyu's management team and associates and leveraging the expertise of Rakuten and Walmart to enhance the customer experience, meet their ever-changing needs, and make shopping more accessible through digitalization," Hirofumi Hirano, co-head of Asia Pacific Private Equity and CEO of Japan at KKR, said in a statement.

Seiyu and Rakuten have maintained an e-commerce partnership since 2018.

Ideas and Commentary:

Its important to form partnerships in Japan with local businesses as the local businesses can provide needed expertise and experience especially with the sometimes picky Japanese customer. 

And of course more and more businesses are moving to an online presence so the Rakuten will enhance the online presence. 

Japanese customers are moving more online since the pandemic the need for improvement platforms and convenience for the customer is important.

Article:

Kazunori Takeda, group executive vice president at Rakuten, expressed hope that the acquisition will allow for further merging of "the best of offline and online retail."

"The planned establishment of Rakuten DX Solution will also allow us to offer digital solutions optimized to transform retail at Seiyu and in new future partnerships with retailers across Japan," Takeda said, referring to the new subsidiary.

The global coronavirus pandemic has led many retailers to take a fresh look at their business strategies as more people are forced to stay at home, boosting the appeal of e-commerce offerings that allow consumers to place orders online and have their products delivered.

Ideas and Commentary:

The pandemic has forced many brick and mortar businesses to move maybe more quickly than they planned to online. But to be fair and honest, if a business hasn't yet, they might get left behind or at least lose out of  future sales as customers are looking more and more for online opportunities for buying. 

Its also forcing many businesses to innovate and become more flexible and not just the same old brick and mortar store and expect customers to come to their stores or restaurants or supermarkets etc.

The days of just a brick and mortar stores is the past and now even in Japan. 

Even conbini places are innovating to meet the demands of customers who need or want a different shopping experience.

Japan is in a "new normal" and the new normal is about to become the even more new normal as the innovation in retail/services and other places is changing the customer and shopping landscape and the more it is changing the more faster it will change.

Article:

Supermarket operator Life Corp. has already begun a home delivery service for fresh foods and other items with Amazon.com Inc.'s Japan unit.

Another retailer, Aeon Co., is also seeking to strengthen its online grocery business by using artificial intelligence and robotics following a partnership with a subsidiary of British online supermarket operator Ocado Group Plc.

Ideas and Commentary:

These and other companies see the need to innovate or die. Again the same old way of doing business is no longer. The pandemic has brought wave of fast paced change to Japan and its not going back to the old of way of just a customer in a store.