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Walmart and Rakuten take on Amazon with Kobo e-reader alliance

Walmart and Rakuten take on Amazon with Kobo e-reader alliance

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Walmart has struck a deal with Japanese e-commerce giant Rakuten that will see the US company become the exclusive mass retailer of Kobo e-readers. Co-branded Walmart and Kobo apps will be released for ebook and audiobook content, which will be available through Walmart's website, and Walmart retail stores will also sell digital book cards.

Rakuten bought Canadian company Kobo in 2011 and released its e-readers in Japan before Amazon got into the market. The partnership with Walmart, however, will see two of the world's biggest retailers team up to take on Amazon in the US. Amazon's retail presence for the Kindle is still limited, and although the company dominates the ebook market after vanquishing Barnes & Noble's Nook, the prominent placement of the Kobo brand in America's largest retailer could present another challenge.

The move echoes deals that Rakuten has made to place Kobo e-readers in major bookstore chains around the world, such as WHSmith in the UK. Physical retail presence is a potential advantage for Kobo, which doesn't have the book selection or brand recognition of Kindle but is competitive in terms of hardware — the bigger-screened, water-resistant Aura One, for example, beat Amazon's similar new Kindle Oasis to market by more than a year.

The alliance will also see Walmart and Rakuten launch an online grocery delivery business called Rakuten Seiyu Netsuper in Japan later this year. Walmart owns Japanese supermarket chain Seiyu and already operates a grocery delivery service through local stores, but Netsuper will use a new fulfillment center to boost capacity and also offer products like meal kits and produce from Rakuten's online marketplace.