Following the news that Japanese supermarket group Aeon Co. Ltd. partnered with British online grocer Ocado to develop its e-commerce capabilities;

Shagun Sachdeva, Consumer Insights Analyst at GlobalData, a leading data and analytics company, offers her view:

“With Japan emerging as an international leader in e-commerce and boasting one of the fastest growing and most frictionless online retail markets across the globe, retailers are increasingly moving away from offline business model towards one that integrates online sales more closely.

“Japan’s retail industry is set to grow at a compound annual growth rate (CAGR) of 2.6% from US$969.1bn in 2018 to US$1,101.5bn in 2023. Although, non-store retail forms only 12% of the total retail sales, it has grown at a rate of 6.8% in value sales in 2018, according to GlobalData. At the same time, online retail sales in Japan are projected to grow at a CAGR of 10.1% to reach US$102.4bn in 2023.

“The move to partner Ocado will allow Aeon to leverage Ocado Smart Platform (OSP) and other software, as well as Ocado’s engineering and support services to launch a new online grocery business covering millions of customers across Japan. As part of the partnership, Aeon will develop a national fulfillment network to serve the whole of the Japanese market. It will also help Aeon to compete with its rivals such as Walmart Inc’s Japanese supermarket chain Seiyu and Amazon Fresh. On the other hand, the deal will allow Ocado to foray into Japanese market and leverage Aeon’s longstanding brand presence and product positioning.