We primarily operate businesses in three segments: Marketplace (our flagship cross-category C2C marketplace Mercari and the B2C marketplace Mercari Shops), Fintech (the mobile payment service Merpay), and US (the C2C marketplace Mercari in the US). See our Business Activities page for more information regarding our main services.
Through our businesses, Mercari works to contribute to solving environmental issues and create a “planet-positive”* world in which people can continue to create new value by sharing limited resources across generations. We have identified five topics as our materiality, and take on initiatives in these areas as part of our continued efforts to achieve a more abundant society. Our five material topics are “Creating a Circular Economy/Mitigating Climate Change,” “Diversity & Inclusion,” “Local Empowerment,” “Safe, Secure, and Fair Transactions,” and “Corporate Governance and Compliance.” For more details, see our Sustainability page.
*“Planet positive” is based on the concept of “planetary boundaries” (the earth’s limited resources). Mercari Group adopted this term to express our stance of being a company that has a positive impact on the environment through the growth of our business.
See our Corporate Governance pages (Our Corporate Governance Principles, Corporate Governance Structure, Effectiveness of the Board of Directors, Compliance and Risk Management).
See our IR Calendar.
With regard to Marketplace and Fintech, adjusted figures exclude internal transactions between the two companies (outsourced payment processing fees).
With regard to Mercari US, adjusted operating income is the amount after non-cash items (i.e., stock-based compensation and depreciation) are deducted. This adjustment is carried out to match the disclosure standards of other companies in the industry in the US market.
This figure comprises the sales balance we temporarily hold for sellers after they sell an item on Mercari, the money we hold for users when they add funds to their Merpay account from a bank account, and the sales balance we temporarily hold for merchants after users choose to pay for purchases using Merpay at merchants.
This figure refers to the security deposit we deposit to institutions in accordance with laws and ordinances as a guarantee for the deposits received that we temporarily hold for users.
This figure primarily refers to money that we have deposited mainly with payment service providers so that users are able to withdraw their sales balance early, which is a part of the deposits received that we temporarily hold for users.
This figure includes expected payments for the unpaid balance of Merpay Smart Payments (lump-sum payment/fixed-amount payment) made by users. This is climbing primarily due to the increase in unpaid balance as a result of continuous product improvements creating more opportunities for users to utilize this service.
This mainly refers to fees paid to contracted payment service providers.
At the present stage of our business, in which we have determined that we still have significant room for growth, we believe that it is most important to maximize future profits while growing our top line by strengthening our existing businesses and breaking into new areas both within Japan and overseas. However, we strive to maintain an appropriate balance between growth and profitability by evaluating the cost-effectiveness of initiatives using internal criteria and making disciplined investment decisions.
Given changes in the external environment, we reviewed our investment discipline and priorities to focus investments more on mid- to long-term growth, rather than short-term results. For example, when considering marketing initiatives, we reduced investments that tend to contribute to short-term GMV growth but are less cost-effective, and instead prioritized investments that will steadily accumulate results in the mid-to-long term, such as new user acquisition and listing initiatives. With regard to product initiatives, we will promote simplifying listing, packing, and shipping in order to grow the user base by enhancing the user experience for listers.
Unlike typical B2C businesses, C2C marketplaces are unique in that the sellers of items are ordinary consumers as well. It is essential to maintain an optimal balance of sellers and buyers in order to grow the business. If there are not enough buyers, sellers have difficulty selling their items; if there are not enough sellers, buyers have difficulty finding items to buy. We promote product improvements and marketing initiatives with this balance in mind.
In both Japan and the US, Q2 (October–December) and Q3 (January–March) are the peak season due to increased demand for winter clothing items, which tend to have high unit prices.
We consider Mercari’s greatest strength to be that users can buy and sell anything, rather than any one specific category. As such, our policy is to strengthen all categories for a well-balanced marketplace.
In both our C2C and B2C businesses, our primary source of sales is the selling fee (10% of the purchase price) we receive from sellers upon the sale of an item.
While we have no plans to change our fees at present, we will reconsider it as necessary taking into consideration similar services and the market environment.
In a survey carried out by Mercari in April 2021, we estimated that there are approx. 36 million lister prospects1. We believe that by acquiring new users mainly in the middle-aged and older demographic, we can achieve further growth. Additionally, according to an estimate by the Ministry of Economy, Trade and Industry (METI), the C2C EC market reached 2,212.1 billion JPY in 2021, an increase of 12.9% YoY.2
1. Based on a survey conducted in April 2021 that polled 9,189 men and women aged 18 to 74. Lister prospects refers to people who are aware of Mercari and intend to list items, but have not listed anything yet; the survey does not take into consideration whether the respondent has downloaded the app or has experience buying items on Mercari. Survey contractor: Macromill
2. “FY2021 E-Commerce Market Survey Report”, METI
Currently, we are targeting small businesses, including small-scale producers and creators. Many of these businesses have not opened up their own online shops. In 2020, the percentage of businesses in Japan that offered online sales was only 8.1%*, which was lower than many other countries. Based on this data, we believe that this represents a large business opportunity.
*Source: “FY2020 E-Commerce Market Survey Report”, METI (July 2021)
In hearings Mercari has carried out, we found that two of the major issues small businesses and producers face when opening online shops are the technical knowledge required to operate an online shop and a lack of successful sales after opening a shop. Mercari Shops provides a platform just like Mercari where anyone can easily open a shop and sell items, as well as the ability to leverage Mercari’s user base of over 20 million people. We aim to use these solutions to allow a wide variety of small businesses and producers to easily open up online shops and successfully sell their products.
We believe that by including items listed on Mercari Shops alongside items listed by individual users, we can increase the variation of items available on Mercari, enhancing the shopping experience for buyers. We also believe that as Mercari Shops gains more attractive shops, it will create opportunities for an even wider range of people to use Mercari, including those who have never used Mercari before. This increase in users will likely lead to more opportunities for individual sellers to sell their items as well.
The payment domain is an essential infrastructure for all transactions on the Mercari service. Since Merpay was established, we have worked to enhance the UI and UX to provide a seamless transaction experience. With respect to enhancing profitability, we have been focusing on the credit domain since FY2021.6. As a result, we have made progress in establishing a profit base, achieving a full-year unadjusted operating profit for the first time in FY2022.6. We will continue to advance business growth, particularly in the credit domain, and promote the concept of circular finance as we work toward establishing a new financial culture.
One of our primary focus areas is our deferred payment service. We consider this a promising market with continued growth potential, with studies estimating that the total payment volume of deferred payment services in the EC market will rise from 1,089 billion JPY in 2021 to 1,909 billion JPY in 2025.*
*Source: “Online Payment/Settlement Service Providers 2021”, Yano Research Institute Ltd. (published April 27, 2021) (Note: Numbers based on transaction volume of deferred payment service providers)
In 2021, we were the first business to obtain No.1 certification as a comprehensive credit purchase intermediary (AI credit). We carry out rigid risk management, leveraging our unique AI credit by calculating appropriate usage amounts that take into account credit based on each user’s behavior history, such as Mercari usage history, instead of traditional attribute information.
Our mission is to circulate all forms of value to unleash the potential in all people. Since 2017, our internal research and development organization has carried out research regarding cryptoassets and blockchain technology, with the belief that leveraging blockchain technology for value exchange will allow us to create a new user experience where anyone can easily exchange all forms of value, including services and digital content in addition to goods and money.
We believe that it is important to create an environment that our users can use with confidence and that makes cryptoassets and NFTs easy to understand, and that by providing a service familiar to a large number of people such as Mercari, we can contribute to helping these technologies become more widespread.
We receive a selling fee (10% of the purchase price) from sellers upon the sale of an item. Our actual take rate* consists of this selling fee, a 2.9% + $0.50 payment processing fee, and fees for additional services utilized by many of our users, such as our Instant Pay and Mercari Authenticate services.
*Calculated based on net sales data that is calculated based on net results for shipping revenue and costs. Under US GAAP, net sales for Mercari US are calculated based on gross results for shipping revenue and costs. Under Japanese GAAP, net sales were calculated based on net results through FY2021.6, but due to the adoption of the new sales recognition standards, are calculated based on gross results as of FY2022.6.
The US market has multiple specialized services, such as services that only offer shipping options, services specific to certain categories, and services that require face-to-face transactions. However, we are establishing a unique position in the market as a cross-category C2C service that offers a variety of shipping options. We plan to continue strengthening this unique position to aim for mid- to long-term growth.
The US online reuse market has more than doubled since 2015. We consider this a promising market with continued growth potential, with a study carried out by Mercari US (Mercari US, “The Reuse Report”) estimating that it is expected to grow from 56 billion USD in 2020 to approx. 200 billion USD by 2030.
Currently, we do not provide a shareholder benefit plan. Please see Shareholder Returns Policy for more details.
The Shareholders Meeting is held in September every year. The date and venue will be updated on the Shareholders Meeting page upon confirmation.
Sumitomo Mitsui Trust Bank, Limited.
Please contact the securities company at which you made your trading account. If you have a special account in which shares are recorded, the Securities Agency Department from Sumitomo Mitsui Trust Bank, Limited will be responsible for your stock procedures. For further details, please take a look at our Stock Procedures page.