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By Ritsuko Ando

TOKYO (Reuters) - The coronavirus has forced Japan's notoriously fussy food shoppers to abandon doubts about online grocery stores, sending retailers such as Aeon Co scrambling to meet a surge in delivery demand.

Although Japanese shoppers aren't alone in going online during the outbreak, the shift is remarkable for a country that had been expected to take years to embrace online food shopping because of a zeal for fresh and perfectly presented produce.

"I think that this pandemic has triggered an inflection point in the adoption of grocery e-commerce," said Luke Jensen, executive director of Ocado Group , hired to build a grocery e-commerce business for Japanese retail giant Aeon.

Most companies won't disclose numbers, but retail executives and analysts estimate internet sales now account for about 5% or more of Japan's total grocery sales, compared with 2.5% before the pandemic.

Although that is still lower than some pre-crisis estimates of 15% in China and even 7% in broadband laggard Britain, it challenges a long-held belief that Japanese shoppers will always on shopping daily and in person, checking the goods first-hand.

Yuri Ohtaka, a graphic designer living in Tokyo's western suburbs, began ordering from multiple online supermarkets in March after seeing shoppers emptying shelves at a nearby store.

Although fears of shortages have subsided, online deliveries have made it easier as she works from home, making three meals a day for her family, including her 3-year-old son. She's also happy to avoid stores amid fears of infections.

"There's no need for face-to-face, dealing with registers, or standing in line," she said, adding that she's also persuaded her parents to go online. "They were shopping every day in the supermarket, and I really didn't want them to."

As more households have two people working, analysts say, people want to spend less time shopping. But they still have exacting standards for service and produce quality, which have perplexed previous foreign entrants such as Carrefour and Tesco .

Such changes are closely watched as Japan is one of the world's most valuable grocery markets, worth over 50 trillion yen ($466.42 billion) a year. Per capita, only countries such as Switzerland, Norway and Israel spend more on food.


Major Japanese supermarkets, despite talking about online services for years, have only recently begun large-scale spending on e-commerce infrastructure.

Most have struggled to meet the spike in demand, and would-be-shoppers on Twitter have complained of difficulty securing delivery slots throughout the crisis.

Aeon hired British online grocery pioneer Ocado in November to build state-of-the-art robotic warehouses, aiming to fend off rivals such as Amazon , Seven & i Holdings' Ito-Yokado and a venture between Walmart-owned Seiyu and e-commerce giant Rakuten Inc .

But the first of those warehouses won't start operating until 2023. In the meantime, Aeon said it is hiring more staff to help pack online grocery orders, although it is having difficulty hiring more delivery drivers.

Despite such constraints, Aeon expects online grocery sales to grow 50 percent and account for about 10 percent of sales by the end of its financial year ending next February, according to company executives.

That is not an official target unveiled to investors, but the company confirmed President Akio Yoshida, who was appointed to the top job in March, set it as a goal.

Executives expect the shift to last.

"When people increase their use of online, they stay with it rather than going back. In Japan we'd expect there to be a step up in the growth of e-commerce," said Ocado's Jensen, who is also chief executive of the group's Ocado Solutions technology business.


Analysts say the shift is also likely to favour bigger retailers who can invest in high-tech warehouses capable of handling large volumes rather than just having store staff pick items from retail shelves and package them for delivery.

That could put smaller supermarkets and mom-and-pop stores, already struggling to match the likes of Aeon and Ito-Yokado in pricing, at a further disadvantage.

But Violetta Volovich, who has researched global grocery industry trends for e-commerce consultancy Edge by Ascential, said remote and costly high-tech fulfilment centres were not the answer for all retailers.

Instead, she envisions many retailers adopting automating more jobs in existing brick-and-mortar stores and embracing features such as "click and collect", in which shoppers pick up online purchases at the stores.

She also said the rise in food e-commerce didn't mean an end to traditional grocery shopping.

"Just because people get pizza delivery doesn't mean they will stop going to pizza restaurants," she said.

($1 = 107.2000 yen)

(Reporting by Ritsuko Ando. Editing by Gerry Doyle)

Copyright 2020 Thomson Reuters.

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Japan says Chinese ships spend document time violating its territorial waters

The Chinese vessels came within just 2.5 miles (4 kilometers) off the Japanese-managed Senkaku Islands, identified in China as the Diaoyu Islands, well past the internationally identified 12-mile (19.3 kilometer) restrict that defines a country’s territorial waters, the Japanese Coastline Guard claimed.

Japanese chief cupboard Secretary Yoshihide Suga reported Tokyo has lodged recurring diplomatic protests with Beijing about the existence of the Chinese ships.

Both of those Tokyo and Beijing declare the uninhabited islands as their have, but Japan has administered them given that 1972.

Tensions above the rocky chain, 1,200 miles (1,900 kilometers) southwest of Tokyo, have simmered for decades, and with promises above them relationship back hundreds of decades, neither Japan nor China is probable to back down about territory regarded a countrywide birthright in both of those capitals.

But tensions heated up past thirty day period, with the acceptance by the Okinawa city council of a invoice transforming the administrative status of the island chain. The vote, which was documented to have asserted that the island’s are “element of Japanese territory,” generated a solid protest from Beijing.

On Monday, Chinese Overseas Ministry spokeman Zhao Lijian, taken care of that it was China’s inherent correct to patrol waters close to the islands and Beijing urged Japan to prevent infringing on the country’s sovereignty.

Chinese authorities ships have now used 84 times in waters all around the islands, Japan’s coastline guard mentioned Monday, but the actual intrusion into Japan’s territorial waters ups the ante on the dispute.

Japan’s coastline guard explained the two Chinese intrusions considering the fact that Thursday — lasting 30 hours and 40 several hours respectively — are the longest spans Chinese federal government ships have at any time invested within Japanese waters about the islands. In the course of those forays, the Chinese ships had been in just Japan’s territorial waters, cruising about 4 to 6 miles (six to 10 kilometers) off the islands, Japan reported.

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The shut proximity in between the two sides sites the ships at the risk of collision, which could ratchet up tension even even more if a armed service confrontation is provoked.

These types of a state of affairs has lifted alarm in just the region, owing to the prospective for escalation. Beneath a mutual defense pact with Tokyo, the United States is obligated to protect the islands as part of Japanese territory.

Rising Japanese defense ties with India might also be introducing to the tensions amongst Tokyo and Beijing.

Late very last month Japanese Maritime Self-Protection Force teaching ships drilled with Indian naval vessels in the Indian Ocean.

Requested at a information meeting very last thirty day period no matter whether there is certainly any relation among amplified Chinese routines in the disputed islands and the India-China armed forces face off in the Himalayas, Japanse Protection Minister Taro Kono reported the area ought to do a much better career of evaluating Chinese intentions.

“China is attempting to adjust the position quo at the India border, in Hong Kong and in the East China Sea, South China sea. So it is effortless to make connections between those people problems. Definitely the military services is controlled by the Communist Party, so it has to be coming from pretty superior up in the Chinese Communist Bash,” Kono stated of the expanding Chinese military activities.

CNN’s Shawn Deng contributed to this report.

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