As Walmart is refocusing its efforts in the US and around the world it seems the Japanese market is dropping from a place of prominence Walmart has been operating in Japan for the last 16 years a time described as tumultuous by the Financial Times FT According to FT reports Walmart has been approaching bankers to explore an exit by sale from Japan as the international retail giant is seeking to divest itself of the struggling Seiyu supermarket chain Walmart first purchase Seiyu in 2002 but has faced difficulties gaining traction in the extraordinarily challenging Japanese market Walmart first purchase Seiyu for 60 billion The sales process has not yet formally launched according to those familiar with Walmarts discussion with bankers and is expected to progress slowly Japan is the latest nation that Walmart has backed out of in the last 12 months as its international priorities are shifting In April Walmart merged its UK-based grocer Asda with larger rival Sainsburys Two months later in June it offloaded a majority stake in its Brazilian business In between those two scale-backs Walmart made a giant leap forward in India a market it has struggled to enter for the last decade due to local regulation with its 16 billion acquisition of Flipkart India is one of the most attractive retail markets in the world given its size and growth rate and our investment is an opportunity to partner with the company that is leading transformation of eCommerce in the market said Walmart CEO Doug McMillon in a statement at the time Japan however has proved to be less attractive to Walmart over time and though it has not yet appointed bankers to run the sale banks and potential buyers are discussing it as though its occurrence is at least very likely According to reports in the FT the most likely class of buyers is a growing number of domestic and international private equity firms that are specifically interested in Japan as a potential hot location for value shoppers Some believe that while private equity firms will inevitably be drawn to the sale the likelihood of being able to complete the deal might scuttle a lot of potential deals Sieyu they say may not actually be easy to sell When you look at the list of failures by foreign retailers in Japan it is quite tough to imagine bringing in someone to manage a great turnaround story for Seiyu If Walmart cannot do it you know it is tough said one person involved in a number of recent PE deals in Japan according to FT Walmart is far from the first brand to fail to ignite in a Japanese retail segment which is highly fragmented and generally unprofitable and in some segments actively shrinking The Japanese market for mass merchandisers fell 6 percent in retail value to 67 trillion 59 billion in 2017 compared to 2013 according to Euromonitor Both Tesco and Carrefour made a run on unifying the grocery market from abroad only to admit defeat when attracting Japanese consumers in an extremely competitive market became too tough France-based Carrefour survived five years in the market until 2005 before throwing in the towel Tesco entered the market through the purchase of an acquisition a local discount supermarket chain in 2003 by 2011 it had called it quits When Walmart first bought into Seiyu in 200 it struggled to increase its profitability basically from day one The chain reported seven consecutive years of losses until Walmart took it on as a wholly owned subsidiary at which point Walmart stopped breaking out individual performance figures But given its long history of struggle it is not entirely surprising that Walmart is looking to exit a difficult market particularly as it focuses on its oncoming battle for retail dominance with Amazon in India Still earlier this year Walmarts CEO Doug McMillon flew to Tokyo as part of the rollout of Walmarts grocery delivery platform with Rakuten The partnership also allows Walmart to sell eBooks audiobooks and eReaders from Rakuten Kobo in its brick-and-mortar stores as well as through its website in the US Rakuten is a strong eCommerce business and were excited to collaborate with the top online-shopping destination in Japan said McMillon We look forward to expanding our grocery footprint in Japan and launching a new offering of eBooks and audiobooks for our customers in the US The future of the grocery delivery program though if a sale actually goes through is unknown Join The Upcoming Conversation on July 18th 2018 1 00 PM EST Amazon delivery Flipkart grocery international business Japan M A News Retail Seiyu Supermarket Chain walmart Whats Hot