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Japan's Aeon to invest $4.4B in online retail

Japanese retail giant AEON Co. Ltd. will invest $4.4 billion over the next three years to ramp up its digital and e-commerce offerings, the Nikkei Asian Review reported Dec. 15.

The hypermarket and supermarket operator is more than doubling the amount it is spending on online investments, the Japanese publication reported, citing the company's mid-term business plan running through fiscal 2020.

"We will spend more on things other than brick-and-mortar stores," Aeon president Motoya Okada told a press conference in Tokyo, according to the Nikkei. The executive said that Aeon plans to double its investment in online operations in fiscal 2021.

Okada said traditional retailers have to "catch up" with online shopping companies such as Amazon.com Inc.

Aeon will roll out its own e-commerce platform, use artificial intelligence to analyze sales trends, and develop a more efficient system for account settlements, the Nikkei reported.

The Japanese retailer is also planning to open a new supermarket format with a floor space of 3,000 square meters, which is larger than average supermarkets in Japan but much smaller than most general merchandise stores, the paper reported.

According to the report, Aeon plans to increase sales at its discount chains from ¥400 billion to approximately ¥1 trillion.

As of Dec. 14, US$1 was equivalent to ¥112.63.