Walmart Partners With Rakuten; Kroger Reportedly Mulls Alibaba Alliance

  • Written by  Marie Griffin
Walmart Partners With Rakuten; Kroger Reportedly Mulls Alibaba Alliance

Some of the biggest names in U.S. and European retailing, including Walmart, Carrefour and possibly Kroger, are linking up with Asian e-Commerce and Internet giants — and some of the deals are having an impact on the U.S. retail marketplace.

On January 25, Walmart and Rakuten, the Japanese e-Commerce company that has grown into a diversified global conglomerate, announced a two-pronged, two-country agreement. In Japan, Walmart will launch an online grocery delivery service; orders taken via Rakuten’s online marketplace platform will be fulfilled through a Walmart-Rakuten joint venture. In the U.S., Walmart will begin selling Rakuten Kobo’s eBooks, audiobooks and Kobo eReaders in Walmart stores and online.

The deal comes on the heels of an agreement between French hypermarket retailer Carrefour and two Chinese companies — social media giant Tencent and Yonghui Superstores. In addition to an undisclosed financial investment from the Chinese companies, the strategic alliance is designed to help Carrefour China “improve its online visibility, increase the traffic of its offline and online retail activities, and benefit from Tencent’s advanced digital and technological expertise to develop new smart retail initiatives,” according to a release.

Amidst these announcements, reports percolated about a potential alliance between Chinese e-Commerce giant Alibaba and the largest U.S.supermarket chain, Kroger.

The New York Post reported that senior executives from Kroger —but not its CEO — had met in China with officials from Alibaba in December. However, “there was no indication…that the two companies were talking merger,” according to the newspaper.

Kroger declined to comment, and an Alibaba spokesperson told the Post, “Alibaba has dialogue with hundreds of businesses around the world every day about expanding commercial relationships and reaching Chinese consumers, and Kroger is an example of just that.”

However, China’s Ministry of Commerce provided a hint that Alibaba and Kroger already have a relationship of some sort. In a January 13, 2018, release on developments in China’s retail enterprises in 2017, the Ministry stated, “Alibaba has teamed up with Kroger…to speed up the integration of online and offline sales.”

Integrating online and offline sales is not new territory for Alibaba, which has been involved in physical retailing since 2015 through a series of acquisitions and its home-grown Hema Xiansheng supermarkets.

Amazon, the unchallenged e-Commerce leader in the U.S., only recently made a bold move into brick-and-mortar retail with its acquisition of Whole Foods in August 2017. In Japan, Amazon is a close second to Rakuten in e-retail, but it trails Alibaba and by huge margins in China.

Asian Companies Seek Access To U.S.

Meanwhile, both Alibaba and have their sights set on the lucrative U.S. market. will take its first step into the U.S. this year with an e-Commerce offering in Los Angeles. In a recent blog post, Liz Flora, Editor of Asia Pacific Research at L2 Inc., posited that could become a formidable challenger to Amazon if it were to import its strong relationship with Walmart in China to the U.S.

“While the Chinese e-tailer dwarfs Amazon’s tiny market share in China, it faces a formidable challenge coming into Amazon’s home territory,” Flora wrote. “It could have an advantage, however, if it works with ally Walmart. And, as Walmart increasingly moves to compete in Amazon’s online territory, Walmart also stands to gain if can reach the level of logistics success it has in China,” she added.

Walmart Sews Up ‘Last Mile’ With Rakuten Deal

Walmart already operates supermarkets in Japan through its Seiyu GK division. The new Walmart-Rakuten joint venture will launch an online grocery delivery service in Japan, called Rakuten Seiyu Netsuper, in the second half of 2018. In addition to using Seiyu stores to source products for delivery, the service will have its own dedicated fulfilment center.

“Rakuten is a strong e-Commerce business and we’re excited to collaborate with the top online shopping destination in Japan,” said Doug McMillon, Walmart President and CEO in a statement. “In Japan and everywhere we operate, we’re constantly exploring new ways to make every day easier for customers by offering great experiences in stores, online, via mobile — no matter how customers want to shop.”

In the U.S., the Walmart-Rakuten alliance gives Walmart an exclusive offering to compete against Amazon’s dominant Kindle and Audible brands in the eBook, audiobook and eReader markets. will become the exclusive mass-market partner with Rakuten’s Kobo eReading Service, which offers nearly six million eBooks and audiobooks from thousands of publishers. The eBook content will be accessible through Kobo eReaders, which will be sold in Walmart stores, as well as through a Walmart/Kobo co-branded app.

“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 Hiroshi “Mickey” Mikitani, Rakuten Chairman, President and CEO in the joint release.

Walmart, Align Supply Chain And Inventory Systems

In China, where Walmart operates Walmart Supercenters and Sam’s Clubs, Walmart and, the country’s largest e-Commerce company in terms of revenue, formed an alliance in June 2016. This deal allowed Chinese consumers to purchase products from Walmart on the platform and have them delivered through’s crowdsourced delivery platform. In July 2017, the two companies announced that they would develop a unified supply chain and inventory-management system.

As the release explained, “When a customer places an order on, JD’s proprietary order management system will analyze data from both companies’ stock systems to determine whether a JD warehouse or Walmart store is closer to the customer, and dispatch a JD courier accordingly. This will significantly improve delivery efficiency for customers, optimize delivery routes for JD and increase Walmart’s inventory turnover rate.”

On the brick-and-mortar side, debuted one of its JD Home physical store concepts within a Walmart store in Shenzhen, and will set up pickup stations for online orders within Walmart units. And while Walmart’s partnership with Rakuten has a U.S. component, the alliance does not — at least not yet.

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