Retailer strikes e-book alliance

Wal-Mart to sell Kobo eReaders

Posted: January 27, 2018 at 1:43 a.m.

Wal-Mart Stores Inc. has enlisted another partner in its global battle with Amazon.com.

The Bentonville retailer announced late Thursday it has reached an agreement with Japan-based Rakuten Inc. on a strategic alliance that will bring the company's Kobo e-reader device and catalog of e-books and audiobooks to Wal-Mart's U.S. stores and Walmart.com later this year. In addition, the partnership will set up a new online grocery delivery service in Japan that will debut in the third quarter of 2018.

Wal-Mart Chief Executive Officer Doug McMillon said the collaboration is part of the retailer's efforts to constantly explore "new ways to make every day easier for customers."

"Rakuten is a strong e-commerce business and we're excited to collaborate with the top online shopping destination in Japan," McMillon said in a statement.

Wal-Mart will work with Rakuten Kobo, the company's Toronto-based subsidiary, to sell Kobo eReaders which are similar to Amazon's Kindle device as part of an exclusive mass retail partnership in the U.S.

The alliance puts more than 6 million e-books on Wal-Mart's website and opens what Scott Hilton, the chief revenue officer of Wal-Mart's U.S. e-commerce business, described as an "entirely new category" for its domestic assortment. E-books will be accessible through a Wal-Mart/Kobo branded app available on all iOS and Android devices, a on desktop app and on the Kobo e-readers.

Wal-Mart also will sell digital book cards in more than 4,000 stores in addition to its assortment of physical books.

"Working with Rakuten Kobo enables us to quickly and efficiently launch a full e-book and audiobook catalog on Walmart.com to provide our customers with additional choices alongside our assortment of physical books," Hilton said in a blog post on the retailer's website.

Neil Stern, senior partner with Chicago-based retail consulting firm McMillan-Doolittle, said Friday that the alliance marks another "interesting move" for Wal-Mart in its strategy to compete with Amazon.com.

"It's an increasing example of a shift in philosophy for Wal-Mart as they move to acquisition and [joint ventures] as a way to gain expertise and jump start their efforts, particularly in e-commerce," Stern said in an email. "They are no longer going it alone."

Wal-Mart recently formed a partnership with Google to enable voice shopping through Google Home devices, competing with Amazon's Echo. The retailer also is working with smart-lock company August Home on an in-home delivery service test in Silicon Valley. Wal-Mart has been working with Uber and other ride-hailing services for the past couple of years on grocery deliveries in select markets as well.

The move is reminiscent of Wal-Mart's relationship with Chinese e-commerce company JD.com. The retailer sold its e-commerce business to JD.com in 2016 and has been working with the online retailer on a number of initiatives since 2016, including a growing grocery delivery service.

Wal-Mart first entered the Japanese market in 2002 and currently operates about 340 stores in the country under its subsidiary, Seiyu. Rakuten will work with Seiyu to launch an online grocery service in Japan that will be known as Rakuten Seiyu Netsuper.

The new service will include fresh produce, daily consumables and items like meal kits, according to the announcement.

Carol Spieckerman, a retail consultant and president of Spieckerman Retail, said the alliance marks another "smart" alliance for Wal-Mart, one that also covers plenty of ground.

"It's a logical way for Wal-Mart to gird its business in Japan and is a significant play in the content delivery arena," Spieckerman said. "More than anything, the partnership demonstrates how comfortable Wal-Mart has become with forging and integrating complex platform partnerships."

Business on 01/27/2018