Tokyo, December 20, 2023 – Rakuten Group, Inc. and Seiyu Co., Ltd., a leading, nationwide supermarket chain in Japan, today announced that the two companies have reached an agreement to make Rakuten Seiyu Netsuper, Inc. a wholly owned subsidiary of Rakuten Group. Rakuten will continue to operate Rakuten Seiyu Netsuper and its fulfillment centers, while Seiyu will transition to operating a stand-alone online supermarket business with shipments delivered from its physical stores. The two companies have set a transition period of approximately one year for this change. Both the company name and service name will be updated at a later date.
Rakuten and Seiyu established Rakuten Seiyu Netsuper in April 2018 as a joint venture. Amid the growth of Japan’s online grocery delivery market due to the increase in dual-income households, changing lifestyles and the digital shift caused by the COVID-19 pandemic, Rakuten Seiyu Netsuper has grown tremendously by improving the quality and lineup of its products, especially fresh produce and prepared foods, and by paying close attention to customers’ changing needs.
Japan’s online grocery delivery market reached 277 billion yen in 2022, up 12.1% from the previous year, and there is significant potential for future growth*1. With service areas expected to expand due to ongoing investment in logistics infrastructure, Rakuten Seiyu Netsuper is currently operating in 17 prefectures*2 and is growing steadily due to its robust supply base owing to Seiyu's nationwide store network and three fulfillment centers*3.
Following the change in management structure, Rakuten will further increase the speed and agility of decision-making processes and aim for improved profitability as soon as possible by implementing a variety of measures at optimal opportunities.
Rakuten will make even greater use of the Rakuten Ecosystem, with its flagship Rakuten Points loyalty program and membership base encompassing more than 100 million Rakuten IDs in Japan, while also leveraging the technology and assets cultivated through its various e-commerce businesses, including Rakuten Ichiba and other services, for the fulfillment center-based online grocery delivery service. Moreover, Rakuten will further support the digital transformation of retail businesses nationwide through its online supermarket platform Rakuten Zenkoku Super.
The following initiatives are planned for the fulfillment center-based online grocery delivery service:
• Acquire new customers through further utilization of the Rakuten Ecosystem and expansion of the service’s business area
• Increase the number of purchases and value of purchases via accelerated customer development drivers such as hit products and categories
• Improve gross profit margins by reviewing and enhancing product lineups
• Improve delivery efficiencies through restructuring of logistics networks based on profitability
Rakuten will continue to provide customers with convenient online grocery delivery services through Rakuten Seiyu Netsuper without changing the service, and the company is committed to becoming a leader in the growing online grocery delivery market.
Under its vision of “Making our customers’ everyday life better with Seiyu,” Seiyu aims to provide the best in OMO services*4 for customers across its supermarket business, both in physical stores and online. With this vision in mind, the company will focus on providing superior OMO services to customers.
Seiyu has already achieved profitability in more than 90% of its online supermarket stores by enhancing the productivity of store operations and optimizing delivery processes, and in the next year, the company expects all stores to be profitable. By concentrating management resources on its store-based online supermarket business, Seiyu plans to proactively expand this business while further increasing profitability in the future. Seiyu will provide the best OMO services both in physical stores and online and aims to be the number one online supermarket.
There is no change to Rakuten and Seiyu’s strategic partnership due to the agreement to make Rakuten Seiyu Netsuper a wholly-owned subsidiary of Rakuten Group. Both companies are committed to further strengthening their business collaborations across a wide range of initiatives through increased collaboration on customer acquisition promotions and digital marketing initiatives based on Rakuten's loyalty program. Additionally, Seiyu will continue to offer Rakuten’s cashless payment solutions such as Rakuten Pay and Rakuten Point Card in its physical stores as Rakuten and Seiyu aim to deliver even greater levels of convenience to customers together.
Notes
*1Source: Fuji Keizai Co., Ltd. "Actual situation of mail order / e-commerce business and future 2023"
*2Deployment area: 17 prefectures (Hokkaido, Miyagi, Fukushima, Chiba, Saitama, Tokyo, Kanagawa, Nagano, Aichi, Shiga, Kyoto, Nara, Hyogo, Osaka, Fukuoka, Kumamoto, Nagasaki)
*3Rakuten Seiyu Net Super Distribution Center opening status: 2021 Yokohama Kohoku (Kanagawa Prefecture), 2022 Ibaraki (Osaka Prefecture), 2023 Matsudo (Chiba Prefecture)
*4Online Merges with Offline” (OMO) refers to breaking down barriers between online services and offline brick-and-mortar stores in the retail space in order to provide customers with seamless, personalized experiences.
About Rakuten Group
Rakuten Group, Inc. (TSE: 4755) is a global leader in internet services that empower individuals, communities, businesses and society. Founded in Tokyo in 1997 as an online marketplace, Rakuten has expanded to offer services in e-commerce, fintech, digital content and communications to approximately 1.7 billion members around the world. The Rakuten Group has approximately 32,000 employees, and operations in 30 countries and regions. For more information visit https://global.rakuten.com/corp/.
About Seiyu
Established in 1963, Seiyu is a nationwide supermarket chain in Japan with more than 300 retail units. Through its supermarket and hypermarket formats and netsuper delivery service, Seiyu offers customers a broad assortment including fresh food, general merchandise, and apparel products across Japan from Hokkaido to Kyushu. In pursuit of our mission, “Making our customers’ everyday life better with Seiyu,” Seiyu continues to innovate to become a leading OMO retailer, enhancing its EDLP strategy by ensuring thorough operational efficiency & technological excellence.