Walmart Inc might finally have found the sweet spot in Japan’s food market with a fast-growing venture ranked third in a nascent online grocery sector, as the brick-and-mortar stores it bought into two decades ago continue their search for profit.
The barely year-old tie-up between the U.S. supermarket chain’s Seiyu and local e-commerce firm Rakuten Inc clocked 30% sales growth for late October through December versus the same period a year earlier when Seiyu was going it alone, said Rakuten Seiyu NetSuper Chief Executive Tamae Takeda.
“We’re doing even better since the start of the new year,” Takeda told Reuters. Concerns over the ongoing coronavirus epidemic may be encouraging people to try the service, she said. “People aren’t really wanting to go out.”
The change in fortune is a boost for Walmart as it steps up its rivalry with Amazon.com Inc in its home market where retailers are racing to deliver online orders faster.
It also demonstrates that greater confidence in online services and improved logistics can win over Japanese shoppers often considered too picky about freshness to buy produce through the internet, analysts said.
Helping drive overall growth, Takeda said, was demand for time-saving solutions, particularly as an increasing proportion of mothers work. Government data showed over 70% of Japanese women with children under 18 work, versus 50% just 20 years ago.
Helping the venture in particular is Seiyu’s access to Rakuten’s 99 million members, expanding its reach beyond its 333 stores. Rakuten, in turn, has benefited from Seiyu’s ties with local suppliers, helping it fight back against Amazon.com.
Together, they are able to better ease the pressure of a shrinking labour market which has driven up delivery costs and prompted Seiyu’s rivals such as Uny, owned by Pan Pacific International Holdings Corp, to abandon e-commerce.
PROFIT IN SIGHT
Seiyu entered e-commerce in 2000, an early start which analysts said helped propel it to third place in the online grocery sector. It trails only bigger supermarkets Aeon Co Ltd and Seven & I Holdings Co Ltd’s Ito-Yokado, and is ahead of Amazon, showed a Statista consumer poll.
Takeda declined to disclose user numbers or sales, but also placed the venture third. The former McKinsey & Co consultant said profitability was “in sight” although the venture would prioritise growth for another two to three years.
That contrasts with Walmart’s overall story in the country.
The U.S. firm entered Japan in 2002 buying 6% of Seiyu, building up its stake before a full takeover in 2008. It slashed costs and closed unprofitable stores but has mostly recorded losses.
Many expected it to go the way of foreign peers including Britain’s Tesco PLC and France’s Carrefour SA which bowed out of Japan. Last year, Walmart moved to end on-and-off speculation of an imminent exit, saying it hoped to eventually list Seiyu while retaining a majority stake.
Meanwhile, growth online has prompted Seiyu’s venture to plan a second logistics centre for this year to bolster scale and efficiency – considered crucial to offset delivery costs. Takeda said the company was discussing setting up more.
That is in expectation of online shopping accounting for 10% of households’ 60 trillion yen ($539 billion) grocery spending from around 2.5%, she said, without giving a time frame.
“It is true that Japanese people appreciate fresh food. But people are realising you don’t have to go to the supermarket to get fresh food,” said Roy Larke at researcher Japanese Consuming. “Long term, we will get there.”
As a whole, Americans spend 70 billion hours each year behind the wheel. But, do you really need Alexa in your car? I tried out Echo Auto to find out whether or not driving around with Alexa in the car is worth it.
What is Amazon’s Echo Auto?
Amazon already has an extensive lineup of Echo speakers; however, the Echo Auto is the only Echo speaker that lets you add Alexa to your car. Echo Auto connects via the Amazon Alexa app on your smartphone. It uses Bluetooth or, depending on your car’s compatibility, an auxiliary cable to play through your vehicle’s speakers.
How to set up the Echo Auto
The setup for the Echo Auto is similar to how you’d go about setting up any Echo speaker, and it can be done in less than five minutes. In addition to the device itself, an air vent mount, in-car power adapter, micro-USB cable, and auxiliary cable are also included with your Echo Auto purchase.
It didn’t take long for me to secure the mount to a nearby air vent in my SUV. But, before I clipped the mount on to the vent, I ran the USB cord through the cable clip on the back of the mount. Then, I placed the Echo Auto on the mount, connected the USB cable to the Echo Auto and power adapter, and, finally, plugged the power adapter into my vehicle’s 12V power outlet.
I turned my car on and opened the Amazon Alexa app. After a few minutes of following the prompts within the app, I was ready to start using Echo Auto.
Echo Auto compatibility and connectivity
Before you buy, check to make sure that Amazon’s Echo Auto will work in your car. Even if you have a newer vehicle that supports a Bluetooth connection to play music, you may not be able to set the Echo Auto up over Bluetooth depending on what make and model car you drive. However, you can use the included auxiliary cable to connect the Echo Auto to your car as long as your car has an auxiliary port.
Another thing to consider is where you’ll place the mount in your car. The Echo Auto includes an air vent mount attachment to hold the device in place that works with most standard horizontal or vertical air vents. However, if your car’s air vents have a criss-cross or diagonal design, the clip likely won’t work properly.
There’s one more thing you should know about how your smartphone works with Amazon’s Echo Auto: The device relies on your smartphone’s current data plan to access Alexa and other features. So, if you spend a lot of time on the road, it’s worth checking your current data plan to ensure you won’t accrue additional carrier charges when using Alexa in your car. And, as you may have already suspected, if you’re driving through an area without cell reception, your Echo Auto won’t be able to connect to the internet.
Echo Auto design and sound
At a mere 3.3 inches long and 1.9 inches wide, Echo Auto is definitely smaller than the cell phone in your pocket. It includes eight microphones and is designed with far-field technology, which means the smart speaker can hear you even when you’ve got the A/C cranked up and music playing, however, Alexa had some trouble hearing my commands when my kids were causing a ruckus in the backseat. As for looks, it’s a pretty basic design and the device only comes in black.
What can Amazon’s Echo Auto actually do?
One of the first things I tried to do with the Echo Auto was asking Alexa for directions. Seems logical enough, right? To my surprise, instead of reading me turn-by-turn directions, Alexa instead sent the directions to my phone. This kind of defeats the purpose of asking Alexa for directions, since I can just ask Siri to do the same on my iPhone XR.
Mostly, though, you can do all of the same things with Echo Auto that you could any Echo speaker like ask Alexa for the weather, latest news updates, add items to your Amazon shopping list, set reminders, play music and podcasts, and more. If you have any smart home devices at connected to Alexa, you can use the Echo Auto to check on those products. For example, if you have a smart door lock that’s compatible with Alexa, you can say, “Alexa, is the front door locked?” With the Echo Auto, you can also adjust your smart thermostat during your commute by saying, “Alexa, set the thermostat to 75.”
But it was my kids who got the biggest kick out of having Alexa in the car. My toddler enjoyed playing games like hide-and-seek with Elmo, while my 7-year-old loved asking Alexa to put on songs from the “Descendants 3” soundtrack. So, while I don’t find the Echo Auto totally necessary, as it does most of the things my smartphone can already do, it could be a lifesaver for parents who have any lengthy summer road trips planned.
Echo Auto storage and care
Extreme heat or cold temperatures can potentially cause damage to Echo Auto, so make sure to bring the device inside if you live in an area that experiences intense weather. Additionally, Amazon recommends unplugging the in-car power adapter if you’re going to park your car for an extended period of time.
Echo Auto and privacy
You may be wary of inviting a connected smart device like the Echo Auto into your car due to privacy concerns. Therefore, before you invite the Echo Auto into your car—or any Alexa-enabled smart home device for that matter—it’s important to understand that each time you say “Alexa” (or whatever your wake word of choice happens to be), Amazon is listening. However, according to Amazon, the wake word and the command or question that follows is the only part that’s being recorded—not your in-car conversations and banter.
Amazon says this is all in an effort to help Alexa become smarter, but this may leave some smart home users feeling a bit uneasy. If that’s you, you can delete any stored voice recordings in the Amazon Alexa app by navigating to Settings > Alexa Privacy > Review Voice History.
Just like Amazon’s other Echo speakers, the Echo Auto has a mic button on top that can be pressed to mute your conversations. However, doing so proves to be a bit pointless because you’ll have to reach over and turn the mic back on before you can ask Alexa something. For this reason, it’s easier to leave the mic on so you don’t have to fiddle with it while you’re driving. Additional privacy settings for the Echo Auto can be found within the Alexa App by clicking through to Settings > Device Settings > Echo Auto.
Is Amazon’s Echo Auto worth it?
Probably not. These days, many newer car models are equipped with smart technology like Android Auto or Apple’s CarPlay. Both of these systems allow drivers to plug into their phone and engage with an interface, similar to their phone, on a display screen in the car, which Echo Auto doesn’t do.
And, since the Echo Auto relies on your smartphone’s reception to work, there’s not much reason to use it over your cell phone since your smartphone can already do most everything that the Echo Auto can.
But, if you’re like me and just enjoy a new smart gadget to try out, the Echo Auto is relatively affordable. Initially, the device was available by invite-only, with a retail price of $49.99 on Amazon. However, you don’t have to fork over $50 to get Alexa in your car because Amazon frequently marks down the retail price to $29.99. And, at the time of publication, Amazon is offering four months of Amazon Music for free when you purchase an Echo Auto.
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Prices were accurate at the time this article was published but may change over time.