TOKYO -- Seven & i Holdings, the Japanese operator of the 7-Eleven convenience store chain, on Thursday announced a partnership with Askul, a mail-order company that deals in office supplies. The pair will start a fresh-food delivery service, putting them in direct competition with online retail giant Amazon Japan.
The new service, to be called IY Fresh, will use Askul's distribution network and will launch toward the end of November. Its initial operations will be in Bunkyo and Shinjuku wards of Tokyo, but both companies aim to expand the business to the whole of Tokyo's 23 wards in 2018, and to Tokyo's metropolitan region by around 2020. Users of the service will be able to specify delivery times to the hour.
The service is pitted as a direct competitor to the Amazon Fresh service, which Amazon Japan launched in certain areas of Tokyo in April. Japan was the third country after the U.K. and the U.S. in which Amazon has offered the service.
Both Seven & i and Askul will also begin selling their own products on each other's online shopping malls. Seven & i's online mall Omni7 has strength in books and foodstuffs, and Askul's Lohaco mall has a wide range of stationery and interior goods. Both companies hope the partnership will fill gaps in each other's services.
"Amazon is an excellent company, but a world where consumers only have Amazon as an option is not comfortable for consumers," Shoichiro Iwata, CEO of Askul, said at a press conference on Thursday. "We will partner with Seven & i to provide other options."
Under its three-year plan through fiscal 2019, Seven & i is seeking to increase its group operating income to 450 billion yen ($3.9 billion), up 23% from fiscal 2016. It aims to hit that target by revamping its "omni-channel strategy" -- a cross-channel business model designed to improve the shopping experience -- and strengthening its delivery operations, with help from Askul.
Seven & i's consolidated net profit for the three months ended in May, released on Thursday, came in at 33.6 billion yen, down 22% from a year ago. It registered an operating profit of 84.1 billion yen, but had to book extraordinary losses due to costs associated with structural reforms.