Are Japan’s supermarkets finally going online?

Japan is a very convenient country — a quick stroll down any Tokyo street is enough to see that. With a konbini on every second corner and a herd of vending machines on every other, one is rarely left wanting for food or drink.

This convenience could be one reason online grocery shopping has never quite taken off like it has in Europe or North America. In October 2018, Rakuten set out to change that, partnering with Walmart Japan subsidiary Seiyu to launch the online supermarket Rakuten Seiyu Netsuper. 

Socially distant grocery shopping

COVID-19 has transformed the humble grocery run into something of a hurdle, as masked shoppers actively try to avoid each other along narrow supermarket aisles. Tired of plastic-partitioned checkouts and ready to pursue alternative methods of sourcing groceries, many shoppers have turned to online supermarket services like Rakuten Seiyu Netsuper.

Over the last six months, the company has been busy making online grocery shopping even safer: In May, the platform made contactless delivery standard. Drivers now ring the customer’s doorbell, ask over the intercom where to leave their delivery and are on their way.

Meanwhile, the company is also trialing a new in-store pickup service. Unlike many other online supermarkets that ship directly from warehouses, Seiyu already operates a network of hundreds of physical stores around Japan, meaning everything in Netsuper’s online catalog is also physically available somewhere in a nearby store.

With the new pickup trial, users can order and pay for their regular groceries through Rakuten Seiyu Netsuper and have them packaged and ready to go at the counter of their nearest Seiyu supermarket.

“We are running trials in two stores so far,” says Masaki Takeda, who serves on Rakuten Seiyu Netsuper’s board of directors. “Customers can specify a time that’s convenient for them to come and pick up their groceries, which reduces their time spent in-store and eases congestion.”

Takeda says the initiative is particularly attractive to shoppers with young children. “They can just pick up their milk and eggs or whatever they would normally buy and be right out of there.”

Once you go online…

“As of 2019, a mere 2.89% of Japan’s food sales were online, in contrast to 10% across Europe,” Takeda says. “Food is a category in which customers generally want to check the freshness of products with their own eyes before buying. Also, in Japan, you will usually find yourself within walking distance of a convenience store or supermarket. Physical stores are already conveniently located.”

But Takeda is optimistic: For him, Japan’s low e-commerce rate signifies untapped potential. Since March, when the pandemic changed lifestyles for many, Rakuten Seiyu Netsuper has been racing to keep up with the growing demand, seeing sales increases of over 30% as of July 2020.

“Initially we saw a rise in demand for processed items like instant noodles, pasta and canned foods,” Takeda recalls. But while many users undoubtedly turned to Rakuten Seiyu Netsuper out of necessity in the beginning stages of the pandemic, Takeda is confident they’ll stick around.

“The new users brought in by the pandemic are experiencing for themselves the convenience and high quality of our service, and are coming back a second or third time,” he says. “As they realize how convenient it is to do their grocery shopping online, we’re seeing people return to their usual shopping habits and buy the same things online they normally would in a brick-and-mortar store.”

Innovation comes in all shapes and sizes

The unique amalgamation of Rakuten’s e-commerce expertise and Seiyu’s vast network of supermarkets has enabled the two companies to chase some futuristic ambitions. 

Last July, a Seiyu supermarket south of Tokyo started flying groceries to a small island in Tokyo Bay aboard one of Rakuten’s automated drones. A few months later, the two companies teamed up again to autonomously deliver groceries to picnickers in a nearby park — this time on four wheels.

At the same time as these trials offer a window on the future of shopping, initiatives like Rakuten Seiyu Netsuper’s contactless delivery and in-store pickup are providing shoppers with the high-quality, dependable service they need right now.