Walmart will team up with Rakuten Kobo the e-reader maker to enter an ebooks market that is dominated by Amazon.com.
At some point later this year, Walmart is going to start selling Kobo e-readers, ebooks and audiobooks across the U.S., as it looks to expand where to date it has only sold physical books, typically bestsellers in paperback, as well as a broader selection available online.
This move is another part of its ongoing competition with e-commerce giant Amazon, which thanks to Kindle, the market leader, commands over 83% of the ebooks market in the U.S., according to the latest estimates. Apple and Barnes & Noble, the bookstore chain, are big players in the ebook arena, though they are far behind Amazon.
However, Walmart will be jumping onto a dropping category, as in 2017 Americans purchased 490 million e-books, or approximately 17% of the entire book market. Digital books, as part of the total sales, peaked out at approximately 23% over five years ago and since have slipped.
Through August of 2017, sales of ebooks fell 5.3%, while those for physical books moved slightly higher. Nonetheless, the move Walmart is making remains consistent with strategy it has to aggressively increase its assortment on online and compete in a more direct way with Amazon, even when it is on Amazon’s own turf. U.S. online sales for Walmart rose by 50% in its most recent quarterly results.
Kobo, which had attempted to make a big breakthrough in the U.S. at the start of this decade through a partnership with Borders, which is now bankrupt, offers approximately six million ebooks. Kobo readers compete with the Kindle from Amazon and the struggling Nook of Barnes & Noble and will be available in 4,000 Walmart stores.
That will likely increase the tiny share of Kobo in the ebooks market for the U.S. and help it become a contender. Kobo has a big presence in Canada and Japan, but sold just 1.25 million books last year in the U.S.
Walmart announced as well another important partnership with Rakuten the parent company of Kobo and the largest online retailer in Japan. Beginning during this summer or early this fall, Walmart’s subsidiary Seiyu is launching a new grocery service online for Japan.
This new joint venture is going to include a fulfillment center that will be dedicated to the delivery of groceries and equipping the Seiyu stores to also delivery. In Japan, Walmart has approximately 341 stores.