Business News

CCTV Script 29/01/18

— This is the script of CNBC's news report for China's CCTV on January 29, Monday.

Walmart is again treading on Amazon's turf.

The company just announced that it is partnering with Tokyo-based e-commerce business Rakuten, to sell e-books and audiobooks on Walmart's offline and online platforms. This is a category that's never been offered by the world's biggest retailor before.

Toronto-based Rakuten Kobo, a subsidiary of Rakuten, will bring its catalog of more than 6 million e-book titles to the retailer's website, alongside Walmart's physical books. It will also begin selling its e-readers, similar to Amazon's Kindle, to Walmart customers later this year.

The news builds on Walmart's efforts to grow its e-commerce business and expand outside of the U.S., where certain markets are over-saturated. In working with Rakuten, Walmart will also launch a new online grocery delivery service in Japan beginning in the third quarter of this year.

Seiyu GK, a subsidiary of Walmart, will be forming a joint venture with Rakuten to sell groceries, where online orders are fulfilled from Seiyu's stores. The service will be known as "Rakuten Seiyu Netsuper," and the companies will also be creating a dedicated fulfillment center in the area to meet demand.

However, we have seen some pessimistic views towards this deal, as what Walmart is jumping on is a declining category.

In the first eight months of 2017, e-book sales fell 5.3% while physical books edged up, according to the Association of American Publishers. Still, for Walmart, the move is consistent with its strategy to aggressively increase its online assortment and compete more directly with Amazon.

At the same time, Fresh food delivery has been around in Japan for decades but has lagged the growth seen in other areas of e-commerce.

It's worth mentioning that Amazon has been trialing its "Fresh" service in parts of Tokyo since last April. And now, can Walmart and Rakuten's cooperation beef up their online groceries services - that's still a questions mark.