Seven Eleven Japan, Others to Launch E-Commerce JV

Convenience store operator Seven Eleven Japan Co. Ltd. today unveiled plans to form a joint venture with seven other companies to sell a wide variety of goods via the Internet, other digital channels and in-store multimedia terminals that will also be capable of delivering digital content.

The new company, 7dream.com KK, will be established next month and capitalized at 5 billion yen (US$47.8 million). Seven Eleven Japan will hold a majority 51 percent stake in the venture. NEC Corp. and Nomura Research Institute Inc. will each hold 13 percent of 7dream.com, Sony Corp. and Sony Marketing will each hold 6.5 percent, Mitsui & Co. Ltd. 6 percent and Japan Travel Bureau Inc. and Kinoscope Inc. will each hold a 2 percent share in the new company.

7dream.com hopes to leverage Seven Eleven's existing infrastructure to support the electronic commerce service. As Japan's largest convenience store operator, Seven Eleven has 8,000 stores across Japan and serves an estimated 7.7 million people every day. When the supermarkets and stores of Seven Eleven parent Ito Yokado are added in, the company reaches 10 million consumers every day through 9,100 stores across Japan.

To back up this network, an efficient nationwide distribution system already exists which Seven Eleven plans to use to distribute goods ordered through its 'Net service. But unlike previous announcements by convenience stores in the e-commerce field, this one goes beyond using the network as a delivery point for goods. A multimedia terminal will allow for immediate access to digital content, Seven Eleven said.

Standing 1.4 meters tall and just 45 centimeters wide and 55 centimeters deep, the terminal is designed to fit easily into the company's existing stores. In addition to a screen through which customers will be able to access the shopping service, the system also includes a digital printer for instant delivery of pictures purchased through the service or photos taken with the built-in digital camera. A MiniDisc drive and MemoryStick slot will allow customers to buy favorite songs and immediately get them delivered. The machine will also included a scanner and a smart card reader/writer. The terminal will run on Microsoft Corp.'s upcoming Windows 2000 operating system and access the U.S. software giant's SQL Server relational database, Seven Eleven said.

In addition to the in-store terminal, customers will be able to access the service through multiple channels including the Internet, digital broadcasting, cellular telephones, television, magazines and other systems, according to the company.

Like Seven Eleven's existing convenience stores, the service will offer users the chance to easily get their hands on the goods they order and also cater for impulse sales through the multimedia terminals. Here's how the service might work:

A customer uses the service to produce a custom MiniDisc with songs from their favorite artist and, while the disk is being written, they are then offered the chance to buy a sleeve for their new MD, complete with the track list and artist photos.

If that's not appealing, next, the machine offers the chance to buy tickets for an upcoming show or offers a range of goods endorsed by the customer's favorite artist. The MD sleeve and tickets can be instantly printed out by the machine and, should the concert prove to be some distance, travel plans and tickets could be next on the list.

After its planned formation next month, 7dream.com will open a Web site from June this year at http://www.7dream.com/. Installation of the multimedia terminals will begin in October 2000 with the aim of having the devices in all of the company's convenience stores by June 2001. NEC and Nomura Research Institute will be responsible for developing and deploying the e-commerce system and network to support the service.

Seven Eleven Japan said it expects to generate revenues of 10 billion yen through the service in the current calendar year, rising to 150 billion yen in 2001, 200 billion yen in 2002 and 300 billion yen in 2003.

Seven Eleven Japan, in Tokyo, can be found on the Web at http://www.sej.co.jp/.

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