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Walmart China has launched a blockchain platform that will enable the retailer to track food throughout its supply chain.

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Rakuten and Seiyu will deliver products from the Seiyu LIVIN Yokosuka Store in Yokosuka City, Kanagawa Prefecture, to visitors in Sarushima via drones.

Drone service to launch on 4 July 2019

Starting on 4 July 2019, the new initiative will service Sarushima, a popular sightseeing destination and the only uninhabited island in Tokyo Bay. It will run for around three months, and Rakuten Drones will ground at a landing port built on Sarushima. To use the service, visitors will need to download the Rakuten Drone app onto their smartphone and place orders through the app. 

A range of approx. 400 products will be available to order, including fresh produce for barbecues, beverages and first-aid products. This will be supplied by the Seiyu LIVIN Yokosuka Store located on the shore opposite the island.

Our view

The service, once in operation, will also provide invaluable knowledge on the capabilities of drone deliveries for disaster relief, how to support people with limited access to shopping in certain areas of Yokosuka and whether it can be rolled out to other regions. This is not the first time Rakuten has turned to drones for delivery solutions in Japan. It has been offering the service since 2016, and signed an agreement with JD.com to strengthen last-mile delivery earlier this year.

Accelerating innovation to drive convenience

Rakuten’s ??Managing Executive Officer, Koji Ando, said, “We are very happy to expand our collaboration with Seiyu on Rakuten Ichiba and Rakuten Seiyu Netsuper to include the field of drone logistics […] with this service, we aim to offer customers an innovative, advanced shopping experience in which products they order will be delivered by drone. Based on this initiative, we will accelerate innovation so that more people can experience the convenience of drone delivery."

Strengthening existing partnership

Seiyu’s Executive Senior Vice President of EC Division, Tamae Takeda, said, "Seiyu has also been looking into drone deliveries for our online supermarket, and we are very excited to work with Rakuten in this field. In the future, through Rakuten Seiyu Netsuper, which we jointly operate with Rakuten, we want to contribute to enriching the lives of more customers by delivering high-quality products at low prices to everyone, including those who have difficulty shopping at stores."

 

Estimated US$1.2bn to be used to strengthen operations in Flipkart.

Intense competition from Amazon and other players

Following renewed investments by Amazon into its India operations, Walmart has responded by setting aside up to US$1.2bn to fund Flipkart’s operations. In a recent regulatory filing, the retailer said it has cash equivalents of US$2.7bn at 30 April 2019. Of this amount, US$1.2bn is expected to be used by Flipkart to enhance its operations.

With the annual Indian festival in September approaching, it is anticipated that these funds will be used to drive promotions and increase Flipkart’s visibility and presence during this period.

Find out more information about Flipkart here.

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Germany’s Metro has shortlisted eight companies for its China business, a deal valued at between US$1.5bn and US$2bn as previously reported.

Top retailers among the bidders

Reuters news agency, citing multiple sources who cannot be named due to the confidential nature of the sale process, reports the following are joining the bid:

  • Alibaba, in partnership with Taiwanese retailer RT-Mart
  • Walmart, US retail giant
  • Yonghui Superstores, part owned by Dairy Farm Group
  • Wumart supermarket chain
  • Suning Holdings, electronics retailer
  • Primavera Capital, private equity group
  • Boyu Capital and property developer China Vanke, a consortium
  • Meicai, fresh food delivery group

Of the above eight, RT-Mart, Walmart, Yonghui and Wumart are among the top 10 leading grocery retailers in China. Gaming and social media gian Tencent Holdings is considering joining the bidding race with Yonghui, of which it is a minority shareholder.

Meicai is an unexpected inclusion in the shortlist. Founded in 2014, the Beijing-based start up company connects farmers with buyers, both at home and in the restaurant business, disrupting traditional wholesaling by cutting out middlemen. It raised at least US$600m in 2018 and had the business valued at US$7bn.

Offline expansion in China fuels the interest

Interest in Metro comes as major tech companies, such as Alibaba, are aggressively expanding offline. It is driven by a maturing ecommerce market and capabilities of transforming China’s traditional and conventional retail sectors. Joining forces with Metro could bring synergy that is pursued by some of these ecommerce companies.

In addition, Metro’s supply chain is also attractive as it can source premium imported products that many of its rivals do not have access to.

The sale process is expected to be completed in September. Metro China currently has 95 stores and reported US$3bn last financial year.

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The Japan External Trade Organisation is offering small to medium-sized domestic retailers free access to global ecommerce platforms to help them sell products in 18 markets abroad.

Supporting smaller retailers grow online

The initiative is expected to increase trade for local businesses, maximising the global popularity of Japanese products around the world. Twenty four ecommerce operators, including Rakuten, Alibaba, JD.com, Red (Xiaohongshu), Lazada (in Singapore) and Ocado have signed up to take part in the program starting this summer. Some of these platforms are expected to setup a dedicated section to sell Japanese products under the program later this year.

Driving Japanese exports

For some smaller businesses, the program could offer their first export opportunity. The initiative eliminates the fee that would normally be required for sellers to list their products on third-party marketplaces. Following successful application, sellers will be asked to provide items chosen by the platform operator, who will negotiate and complete purchases.

 

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