Walmart makes a late entry into the e-book market

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Walmart is making a late and roundabout entry into the e-book market, partnering with a Japanese company to sell e-books and audiobooks.

The deal with Rakuten, a Japan-based e-commerce giant, will see Walmart start selling digital books on its website for the first time later this year.

The move, which was announced Thursday night, comes years after Walmart’s big rival Amazon began to dominate the digital player market.

Walmart customers will be able to read the books through Rakuten Kobo e-reading devices – which have not come down to Americans like the Amazon Kindle and the Barnes & Noble Nook.

The partnership is part of Walmart’s effort to ensure its online offerings include every product line imaginable, giving shoppers no reason to click Amazon.

But in many ways, Walmart is late for the digital book feast. Amazon, which built its business around selling books in its early days, has a huge head start. Beyond that, the e-book market has shown signs of slowing down, as screen-weary readers turn to print copies again.

“This ship sailed years ago,” said Peter Hildick-Smith, president of Codex-Group, a book audience research company.

According to the Association of American Publishers, e-book revenues among 1,200 publishers reporting data fell to $ 743.5 million from January to August of last year, 5.3% lower than the same period in 2016.

Mr Hildick-Smith said the drop was due in part to “digital fatigue” from readers, who spend hours staring at computers and smartphones and looking for an escape by picking up a paper book.

Kobo, a Canadian company that Rakuten acquired in 2011, is a small player in the US market.

Rakuten Kobo chief executive Michael Tamblyn said in an interview that the deal gives Kobo a vast new audience for its digital books through Walmart’s website and, possibly, its stores, which sell print books.

Mr. Walmart, the nation’s largest retailer, is bringing “incredible scale” to Kobo’s books platform, he said. The company’s e-books, which include six million titles, from bestsellers to children’s books, can be read on Kobo devices or on a new Walmart-Kobo co-branded app.

According to Mr Hildick-Smith’s analysis, Kobo accounted for less than 1% of e-book purchases last fall, while purchases on Amazon totaled around 75%.

Mr. Tamblyn declined to comment on Kobo’s share of the e-book market, but said sales had been “stable”.

As part of the deal, Walmart said it is also partnering with Rakuten to expand its online grocery business in Japan. Walmart already delivers groceries to Japan through its Seiyu supermarket chain, which it acquired over a decade ago.

The deal – which Walmart chief executive Doug McMillon traveled to Tokyo to announce – will allow Walmart’s online grocery business in Japan to grow exponentially. Rakuten’s online marketplace has 93 million registered members, capturing a huge volume of e-commerce in Japan.

Online grocery shopping is a major move for Walmart, which is taking on Amazon in this area.

In the United States, Walmart is working to encourage customers to order their food online and then pick it up in stores. In Japan, the partnership with Rakuten will focus on home grocery delivery.


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