“Ecommerce Briefs” is my occasional series of news and online merchant developments. In this article, I will talk about the grocery wars, the international expansion of Amazon and Walmart, and the adoption of e-commerce by Pepsi.
Alibaba Eyes Kroger
In an effort to diversify and expand, Alibaba, the Chinese e-commerce giant, is following in Amazon’s footsteps with its “New Retail” initiative – acquiring brick and mortar stores in China and seeking to make similar acquisitions abroad. Like Amazon, Alibaba believes that equity participation in traditional retail is useful for growth.
Alibaba has invested nearly $ 8 billion in brick and mortar stores in China, mainly by acquiring stakes in local supermarket chains. He has also launched a new supermarket chain that combines in-store and online shopping. Called Hema, the chain also functions as a runtime center, delivering online orders within an hour. Hema has 13 stores, 10 in Shanghai.
Now it seems that Alibaba is planning to enter the arena of US supermarkets in a big way. Kroger, with 2,790 grocery stores, is considering multiple collaboration options – from a technology alliance to outright acquisition by Alibaba. An acquisition could cost Alibaba $ 50 billion, four times more than the acquisition of Whole Foods by Amazon last year. Working with Kroger could give Alibaba the opportunity to sell more US products and access valuable data on US consumer preferences. In addition, the potential partnership could give Kroger access to the Alibaba market in China, where consumers are eager to buy American products.
Kroger faces fierce competition from German grocery retailers Lidl and Aldi as well as Walmart. In addition, the Kroger stock lost 35% of its value the day after the announcement of the acquisition of Whole Foods by Amazon. To quickly increase his online presence, Kroger reportedly offered between $ 300 and $ 400 million to purchase Boxed, the online grocery and household goods bulk distributor. Boxed rejected the offer.
Amazon develops in Brazil
In October 2017, Amazon launched an online electronics and home appliance market in Brazil, the largest market in Latin America. Previously, Amazon only sold books in Brazil. Amazon will now rent a 50,000 square meter warehouse just outside São Paulo, the country’s largest city. Amazon currently relies on third parties to ship its own goods sold on its market.
However, Amazon receives numerous customer complaints in Brazil about delayed or canceled orders – which is a minor problem in countries where Amazon bundles and ships orders.
MercadoLibre, the largest e-commerce site in Latin America, will likely be affected by the move of Amazon. B2W Cia Digital, based in Brazil, is another online merchant that will likely be affected by Amazon’s expansion in the country.
Walmart and Rakuten
In January, Walmart announced a partnership with Rakuten, one of Japan’s leading e-commerce companies, to provide products and services to Japan and the United States.
Seiyu GK, a brick and mortar grocery subsidiary of Rakuten and Walmart, will work together to offer an online grocery delivery service in Japan. The current delivery service of Seiyu will be integrated with the new offer, which will be called Rakuten Seiyu Net Super. It will be launched in the second half of 2018. Companies have plans to increase their capacity in Japan with the creation of a dedicated distribution center while offering deliveries to Seiyu stores. Product offerings include products, lunch kits and merchant products in the Rakuten market.
A joint press release said: “To meet the needs of more and more customers in a hurry, the service will include not only fresh products and daily consumables, but also a rich range of practical articles such as partially prepared cut vegetables. ready-to-use foods, and meal kits, as well as popular local gourmet products from Rakuten Ichiba market traders. “
According to the Yano Research Institute, Japanese consumers spend $ 19 billion a year on food.
In addition, Walmart will become the exclusive retail partner of Rakuten’s Kobo electronic readers in the United States, which will enable it to sell millions of Kobo e-books and audiobooks to Walmart.com. All Kobo content will also be available through a Walmart and Kobo application, which users can access on Kobo mobile devices, desktops and e-readers.
PepsiCo announced that it would spend a portion of its tax savings to support its e-commerce efforts. The company said, “We have seen the benefit of investing in capabilities such as e-commerce, an activity that currently accounts for about $ 1 billion in annualized retail sales for us, with a long time of continuous growth. “
In-store impulse purchases account for about 30% of total beverage sales, according to Ali Dibadj, an analyst at Bernstein Research. With fewer people shopping in the stores, sales could fall. While online shopping will not satisfy an impulse, the Pepsi website directs consumers to other online sites – Amazon, Target, Walmart – for wholesale purchases.