Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Event-Driven

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<a href="https://www.smartkarma.com/entities/wal-mart-stores-inc" target="_blank" data-smartkarma-citation="entities:11134:1" rel="noopener">Wal Mart Stores (WMT US)</a> will sell 85% of its stake in Seiyu, the Japanese general merchandise store (GMS) chain to <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> and <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP). </a>
This ends Walmart's original plans to relist its Japanese business and confirming widespread speculation that it has been trying to sell off its 330-store Japanese operation after 17 years of trying to turn the business around. The purchase price is a reported ¥172.5 billion, considerably less than the ¥441 billion Walmart paid for the business in 2007.
The deal is a win for KKR of course, but much more interestingly, is a huge win for Rakuten. We previously suggested <a href="https://www.smartkarma.com/insights/walmart-will-relist-japan-unit-soon-and-at-last-has-potential-to-grow-but-only-online" target="_blank" rel="noopener">in this Insight</a> that should the Walmart/Rakuten deal not grow fast enough, Rakuten would be a natural acquirer of the Seiyu business and this has turned out to be true – and for good strategic reasons.
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As described before <a href="https://www.smartkarma.com/insights/online-food-demand-brings-new-ideas-and-innovations" target="_blank" rel="noopener">here</a> and <a href="https://www.smartkarma.com/insights/online-food-boom-rakuten-walmart-alliance-goes-live" target="_blank" rel="noopener">here</a>, the Japanese online food market is only just beginning to boom (penetration of food retail by online is still less than 3%) and many of the key players are jockeying for position, led by <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a> in a joint venture with <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life Corp (8194 JP).</a> 
If Rakuten can begin to properly exploit Seiyu's physical store presence to quickly build out a nationwide online food delivery business, it should rapidly become one of the leaders in this fast-expanding market. And given how important the food/FMCG category is, leadership in food e-commerce equals leadership in BtoC e-commerce overall.
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Wal Mart Stores (WMT US) will sell 85% of its stake in Seiyu, the Japanese general merchandise store (GMS) chain to KKR &amp; Co Inc (KKR US) and Rakuten Inc (4755 JP). 
This ends Walmart's original plans to relist its Japanese business and confirming widespread speculation that it has been trying to sell off its 330-store Japanese operation after 17 years of trying to turn the business around. The purchase price is a reported ¥172.5 billion, considerably less than the ¥441 billion Walmart paid for the business in 2007.
The deal is a win for KKR of course, but much more interestingly, is a huge win for Rakuten. We previously suggested in this Insight that should the Walmart/Rakuten deal not grow fast enough, Rakuten would be a natural acquirer of the Seiyu business and this has turned out to be true – and for good strategic reasons.

As described before here and here, the Japanese online food market is only just beginning to boom (penetration of food retail by online is still less than 3%) and many of the key players are jockeying for position, led by Amazon.com Inc (AMZN US) in a joint venture with Life Corp (8194 JP). 
If Rakuten can begin to properly exploit Seiyu's physical store presence to quickly build out a nationwide online food delivery business, it should rapidly become one of the leaders in this fast-expanding market. And given how important the food/FMCG category is, leadership in food e-commerce equals leadership in BtoC e-commerce overall.


The Walmart Japan Sell Off: A Huge Gain for Rakuten

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<a href="https://www.smartkarma.com/entities/walmart-inc" target="_blank" data-smartkarma-citation="entities:11134:1" rel="noopener">Walmart (WMT US)</a> owned Japanese supermarket and hypermarket chain Seiyu announced on 16th November 2020 that <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> and <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a> will acquire 65% and 20% of the share capital of Seiyu in a deal which values Seiyu at ¥172.5 billion ($1.6 billion).The transaction is expected to be completed in the first quarter of 2021, pending regulatory approval. KKR, Rakuten and Walmart plan to jointly operate Seiyu.

Walmart (WMT US) owned Japanese supermarket and hypermarket chain Seiyu announced on 16th November 2020 that KKR &amp; Co Inc (KKR US) and Rakuten Inc (4755 JP) will acquire 65% and 20% of the share capital of Seiyu in a deal which values Seiyu at ¥172.5 billion ($1.6 billion).The transaction is expected to be completed in the first quarter of 2021, pending regulatory approval. KKR, Rakuten and Walmart plan to jointly operate Seiyu.

KKR & Rakuten Join Hands to Acquire the Supermarket & Hypermarket Chain Seiyu

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Capital Markets

US-based online food delivery company <a href="https://www.smartkarma.com/entities/doordash-inc" target="_blank" data-smartkarma-citation="entities:28881:1" rel="noopener">DoorDash Inc (0881510D US)</a> has filed to go public. In this note we describe the company's operations and compare its scale and efficiency to other online food delivery companies in the US and around the globe. 
Intensely focused and increasingly dominant in its home market, DoorDash has made admirable progress toward profitability by focusing on smaller cities and suburban areas in the US. This approach is the opposite of conventional wisdom, which suggests that only a handful of large US cities can generate the order density necessary to make online food delivery economically viable. 
DoorDash is seeking growth from new market segments adjacent to its core operation even as it faces the threat of a large, disruptive new entrant in US online food delivery. Last valued at US$16 bn in June 2020, we believe DoorDash's unorthodox approach deserves to be thoroughly understood by investors. We will write more about DoorDash as the IPO process moves forward.

US-based online food delivery company DoorDash Inc (0881510D US) has filed to go public. In this note we describe the company's operations and compare its scale and efficiency to other online food delivery companies in the US and around the globe. 
Intensely focused and increasingly dominant in its home market, DoorDash has made admirable progress toward profitability by focusing on smaller cities and suburban areas in the US. This approach is the opposite of conventional wisdom, which suggests that only a handful of large US cities can generate the order density necessary to make online food delivery economically viable. 
DoorDash is seeking growth from new market segments adjacent to its core operation even as it faces the threat of a large, disruptive new entrant in US online food delivery. Last valued at US$16 bn in June 2020, we believe DoorDash's unorthodox approach deserves to be thoroughly understood by investors. We will write more about DoorDash as the IPO process moves forward.

DoorDash IPO Context: What It Is & How It Compares to Online Food Delivery Universe

Thematic (Sector/Industry)

With Japanese shoppers still reluctant to visit stores too often, more are turning to online food shopping.This trend was already building gradually before the pandemic, but demand has grown massively in the past nine months and large and small food retailers alike are rushing to add more online capacity.The winners will be the ones able to solve the last mile problem and add some customer-centric innovations. The sector is currently led by <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a> in its partnership with <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP)'s </a>supermarket affiliate, <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life Corp (8194 JP).</a> Others like <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a> and <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a> are also investing for the long-term and even <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> is having another go and we review the current status of all the main players below the fold.What is certain is that, with online penetration of the food retail sector still below 3%, there is plenty of share to mop up for all concerned.

With Japanese shoppers still reluctant to visit stores too often, more are turning to online food shopping.This trend was already building gradually before the pandemic, but demand has grown massively in the past nine months and large and small food retailers alike are rushing to add more online capacity.The winners will be the ones able to solve the last mile problem and add some customer-centric innovations. The sector is currently led by Amazon.com Inc (AMZN US) in its partnership with Mitsubishi Corp (8058 JP)'s supermarket affiliate, Life Corp (8194 JP). Others like Aeon Co Ltd (8267 JP) and Rakuten Inc (4755 JP) are also investing for the long-term and even Seven &amp; I Holdings (3382 JP) is having another go and we review the current status of all the main players below the fold.What is certain is that, with online penetration of the food retail sector still below 3%, there is plenty of share to mop up for all concerned.

Online Food Demand Brings New Ideas and Innovations

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

ASA Capital Management

ASA Capital Management is a boutique Research and Investment Advisory firm focusing on primary research in India. ASA provides bespoke research services to Institutional Clients with a focus on due diligence backed with primary research, Field Trips & Channel Checks.

Equity Bottom-Up

Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private companies. The sub-sectors covered include payment providers, e-commerce retailers,  social media platforms and consumer companies.
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<a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> takes the lead once again, becoming the market leader of the booming Indian smartphone industry. On an uptake, the third quarter appears to be a game changer for the industry - pushing it's performance to new heights, finally getting the sector back to normalcy.</li>
<li>Food aggregators <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a> and Swiggy have seen the difficult pandemic times turn into a green shoot for them. With Tier 2 cities booming with demand, they now focus on a pan India approach adding more and more restaurant partners under their umbrella every month.</li>
<li>Burger King India Ltd. is all geared up to come out with an IPO in India to raise INR 5.42 billion through an issue of 60 million shares.</li>
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<a href="https://www.smartkarma.com/entities/walmart-inc" target="_blank" data-smartkarma-citation="entities:11134:1" rel="noopener">Walmart (WMT US)</a> owned Flipkart to  buy a 7.8% stake in Aditya Birla Fashion. The purchase will not only help the company cut down its debt, but also help it have a better grounding whilst competing with <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a> and <a href="https://www.smartkarma.com/entities/reliance-industries-ltd" target="_blank" data-smartkarma-citation="entities:198:1" rel="noopener">Reliance Industries (RIL IN)</a> .</li>
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Our objective with this weekly is to highlight notable developments in the India internet and consumer sector focusing on public and private companies. The sub-sectors covered include payment providers, e-commerce retailers,  social media platforms and consumer companies.


Xiaomi Corp (1810 HK) takes the lead once again, becoming the market leader of the booming Indian smartphone industry. On an uptake, the third quarter appears to be a game changer for the industry - pushing it's performance to new heights, finally getting the sector back to normalcy.
Food aggregators Zomato (ZOM IN) and Swiggy have seen the difficult pandemic times turn into a green shoot for them. With Tier 2 cities booming with demand, they now focus on a pan India approach adding more and more restaurant partners under their umbrella every month.
Burger King India Ltd. is all geared up to come out with an IPO in India to raise INR 5.42 billion through an issue of 60 million shares.

Walmart (WMT US) owned Flipkart to  buy a 7.8% stake in Aditya Birla Fashion. The purchase will not only help the company cut down its debt, but also help it have a better grounding whilst competing with Amazon.com Inc (AMZN US) and Reliance Industries (RIL IN) .


India Internet & Consumer Weekly | Xiaomi, Zomato, Swiggy, BurgerKing and Flipkart

United States

Walmart Inc. operates discount stores, supercenters, and neighborhood markets. The Company offers merchandise such as apparel, house wares, small appliances, electronics, musical instruments, books, home improvement, shoes, jewelry, toddler, games, household essentials, pets, pharmaceutical products, party supplies, and automotive tools. Walmart serves customers worldwide.

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Walmart (WMT US)

The Walmart Japan Sell Off: A Huge Gain for Rakuten

We predicted the sale of Seiyu by Walmart to Rakuten and this is now happening (with KKR funding). It is a huge step for Rakuten in the war for...

Michael Causton

KKR & Rakuten Join Hands to Acquire the Supermarket & Hypermarket Chain Seiyu

Japanese supermarket and hypermarket chain Seiyu announced that KKR and Rakuten will acquire 65% and 20% of the share capital of Seiyu in a deal...

Oshadhi Kumarasiri

DoorDash IPO Context: What It Is & How It Compares to Online Food Delivery Universe

US-based on-demand food delivery company DoorDash plans to list soon. In this note we show investors how DoorDash differs from some of its peers in...

Tracking Traffic

Online Food Demand Brings New Ideas and Innovations

E-commerce has less than 3% share of food retailing in Japan but this is about to change and fast. Amazon/Life is leading but Aeon, Rakuten and...

Michael Causton

India Internet & Consumer Weekly | Xiaomi, Zomato, Swiggy, BurgerKing and Flipkart

Our weekly monitor this week highlights Xiaomi's robust performance in India, Strategies deployed by food aggregators to gain market share. Burger...

Pranav Bhavsar

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