Japan has the third-richest economy in the world, so it’s fitting that American businesses would want to establish a foothold in that country.
That can be difficult, though, especially for Western companies, who may lack insight into the particular culture of Japan and its shoppers.
If ever you visited the Land of the Rising Sun or are just curious, you might have wondered: Is Walmart in Japan? The answer is yes, but it’s not exactly what you might think.
Is Walmart In Japan?
Walmart’s presence in Japan is marked by its retaining share in the supermarket chain Sieyu and its partnership with Rakuten, the country’s leading eCommerce company. Until recently, Sieyu was a subsidiary of Walmart, but the American retail giant announced it was selling 85 percent of its shares in November 2020.
To learn more about Walmart stores in Japan, Walmart’s relationship with Rakuten, and why Walmart sold their shares in Seiyu, see everything below!
How Many Walmarts Are In Japan?
Walmart doesn’t have any actual store-brand locations in Japan; instead, Walmart owned and operated the established Japanese Seiyu grocery stores.
According to Bridget Goldschmidt of ProgressiveGrocer.com, there are about 300 Seiyu locations all throughout Japan.
These include a dozen or so clustered in and around Tokyo and locations near Nagano, Kyoto, Osaka, and Nagasaki.
What Is Seiyu?
Seiyu is the name of the Japanese grocery chain that Walmart took full ownership of in 2008.
Founded in 1963, the chain was a trusted presence in Japan. Walmart began its acquisition in 2002 when it purchased a 37 percent stake in the company.
Three years later, Walmart got its hands on a majority stake.
And three years after that, a mere six years after its initial investment, Walmart became the sole owner, absorbing Seiyu into its family of holdings.
And then there is one Seiyu General Merchandise store located in Tokyo, which doesn’t sell any food.
Christian Monson wrote about shopping in Japan and described some of the similarities and differences between Seiyu and Walmart.
For starters, Monson thinks the Seiyu Supermarkets are almost totally comparable to Walmart Neighborhood Markets.
He says the Seiyu Supermarkets are incredibly close to the feel of a Western supermarket.
The hypermarkets have the most significant differences, in Monson’s opinion, though.
He describes how Seiyu Hypermarkets are actually placed in the basements of large buildings in the middle of bustling city centers like Tokyo.
That might be part of the reason why Walmart was so interested in acquiring Seiyu – Supercenters are not known for their accessibility in large cities.
By acquiring Seiyu, Walmart got full access to millions of new shoppers in just one or two cities!
Monson also remarks that the products in Seiyu stores can be pretty different (and culturally appropriate); for example, some stores sell kimonos for the entire family.
What Challenges Did Walmart Face In Japan?
Or as some people ask more bluntly: Why did Walmart fail in Japan?
When Walmart announced they were giving up 85 percent of their shares, it came after years of slogging through the Japanese retail market with little to show.
That same market has sent other retailers running, tails tucked: the French Carrefour and Alliance Boots from the UK.
So why is it so tough to make it in Japan?
Unfortunately, Walmart’s business model – steeply discounted goods – ran up against the Japanese distaste for products perceived as “cheap.”
While that attitude might be somewhat unbending, it didn’t occur quickly enough to make much of an impact on Seiyu’s already underperforming sales.
Nikkei Asian also generally cites Walmart’s failure “to take into account local business customs, dietary habits, and labor relations.”
A change in the supply chain led to a popular item vanishing from stores; that alone caused customers, comfortable with the previous selection, to avoid Seiyu.
According to that same article, Walmart higher-ups focused more on managerial staff than store employees.
And Walmart’s emphasis on frozen foods (very popular in the U.S.) was confusing and distasteful to Japanese shoppers used to fresh produce and meats.
Is Rakuten Part Of Walmart?
Rakuten was and remains a joint stakeholder and business partner with Walmart.
Rakuten actually bought a 20 percent stake in Seiyu (Walmart will retain a 15 percent share) when Walmart divested itself of most shares.
And Walmart teamed up with Rakuten in 2018, when they jointly launched an online store called the Walmart Rakuten Ichiba Store.
The concept was an eCommerce platform selling American goods, where Walmart fulfills the orders.
Additionally, Rakuten and Walmart teamed up to offer online grocery delivery and e-readers/ebooks/audiobooks, a la Amazon.
So while Rakuten is not part of Walmart, the two companies are closely allied in numerous ways and across multiple investments.
If you are looking to learn more about Walmart, you might also be interested in reading up on if Walmart is in India or Delhi, if Walmart is in New Zealand, and if Walmart is in the UK or London.
Walmart has had a presence in Japan since the early 2000s, though it is obvious that things haven’t necessarily gone the way they would hope for.
Deeply embedded Japanese culture and norms, very different from what Walmart is used to in the States, seemed to contribute to the retail giant’s floundering.
However, their close ties to Rakuten, Japan’s largest online retailer, should yield interesting and ongoing projects in the future for Walmart.