Dive Brief:

• Aeon, the largest retailer in Japan, is reportedly close to teaming up with Japan’s SoftBank Group and Yahoo Japan (a Softbank unit) with the intent to create an online marketplace featuring a variety of storefronts, including those from third-party specialty sellers, a source close to the matter told the Japan Times earlier this month. Yahoo Japan did not return Retail Dive's request for comment.

• The report comes a month after Aeon closed down the website of its brick-and-mortar Aeon Mall, where tenants of the physical mall had been able to sell their products. Aeon also continues to operate other e-commerce sites.

• The companies are likely to announce a deal soon, though for now the parties continue to negotiate terms, according to the report.

Dive Insight:

Aeon and Yahoo Japan have not had tremendous success with their own e-commerce ventures, according to the report. Softbank’s IT prowess is seen as key to enabling Aeon to make the most of its brick-and-mortar assets in a retail sector quickly evolving as customer data and technologies such as artificial intelligence are leveraged to create better, more personalized shopping experiences. A teaming of these companies could also help Aeon keep up with the trend toward rolling out cashierless or unmanned stores, while helping Yahoo Japan become a more formidable, competitive e-commerce player.

As with many strategic alignments between brick-and-mortar and e-commerce retailers, this potential partnership is being seen as an attempt to build an alliance worthy of challenging the international Goliath Amazon, which has set its sights on expanding in Japan.

Physical retailers and e-commerce companies in other countries are becoming especially sensitive to Amazon’s threat as it continues to expand e-commerce interests internationally while also building up a brick-and-mortar presence through efforts like physical bookstores, Amazon Go and Whole Foods.

As the largest retailers in many countries prepare for inevitable war with Amazon, as well as one another in some cases, there are two priorities. One is to become even larger and broader through partnership, acquisition or strategic investment. The other is to have solid footholds in both e-commerce and brick-and-mortar.

Aeon, Softbank and Yahoo Japan are not the only ones evolving with these priorities in mind. We already have seen significant efforts from some of the world’s largest retailers and e-commerce players to do the same. For example, Walmart recently aligned with Japan’s Rakuten. China’s JD.com has been looking to expand into the U.S. and Europe, and fellow Chinese e-commerce giant Alibaba is aggressively investing in brick-and-mortar retail firms.

By getting together in one way or another, Aeon and Yahoo Japan in particular may be looking to strengthen what have been weaknesses in their respective retail and e-commerce strategies, but they also would be positioned to play the game at a whole new level — that of a retail superpower fit to tackle new opportunities at home and abroad.