Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

<ul>
<li>Results for FY2022-23 provide a snapshot of winners and losers in Japan's retail sector.</li>
<li>The data shows a big improvement in performance for retailers with sales of ¥250 billion or more and the outlook is positive for most, particularly for profits.</li>
<li>This also means that market concentration is intensifying, particularly in sectors like drugstores but also now in supermarkets. We highlight the winners in each sector.</li>
</ul>


Results for FY2022-23 provide a snapshot of winners and losers in Japan's retail sector.
The data shows a big improvement in performance for retailers with sales of ¥250 billion or more and the outlook is positive for most, particularly for profits.
This also means that market concentration is intensifying, particularly in sectors like drugstores but also now in supermarkets. We highlight the winners in each sector.


Equity Bottom-Up

<ul>
<li>Mercard, the credit card launched by Mercari in late 2022, is a success, helping the the CtoC platform grow its user base and help add to Mercari's financial services business.</li>
<li>The rate of growth in online flea markets has slowed and competition has increased so relying on the CtoC platform alone won't deliver sufficient growth.</li>
<li>Mercari will introduce a new gig-work service this Spring to further differentiate its business from the likes of Rakuma and Yahoo Flea Market.</li>
</ul>


Mercard, the credit card launched by Mercari in late 2022, is a success, helping the the CtoC platform grow its user base and help add to Mercari's financial services business.
The rate of growth in online flea markets has slowed and competition has increased so relying on the CtoC platform alone won't deliver sufficient growth.
Mercari will introduce a new gig-work service this Spring to further differentiate its business from the likes of Rakuma and Yahoo Flea Market.


Mercari's Credit Card Boosts Sales, New Gig Worker Service to Add New Revenue Stream

<ul>
<li>Consumption of used products is rising fast as exemplified by the rise of 2nd Street. </li>
<li>Operated by <a href="https://www.smartkarma.com/entities/geo-holdings-corp" target="_blank" data-smartkarma-citation="entities:2453:1" rel="noopener">Geo Holdings (2681 JP)</a>, once just a DVD rental business, it is now Japan’s largest used goods retailer.</li>
<li>Sales are booming in a market increasingly focused on thrift and re-use, allowing 2nd Street to even take on the might of Mercari.</li>
</ul>


Consumption of used products is rising fast as exemplified by the rise of 2nd Street. 
Operated by Geo Holdings (2681 JP), once just a DVD rental business, it is now Japan’s largest used goods retailer.
Sales are booming in a market increasingly focused on thrift and re-use, allowing 2nd Street to even take on the might of Mercari.


Geo Holdings: Plenty of Money in Old Rope

<ul>
<li>Komehyo, the secondhand retailer, opened a new flagship last month on Chuo-dori in Ginza, replacing a less visible store. </li>
<li>The company expects to sell ¥3 billion a year in the 500 sqm store, which should be feasible given the return of inbound tourists, but the company continues to underperform.</li>
<li>Competitors are circling too, with their own upscale stores and online rivals are also growing fast.</li>
</ul>


Komehyo, the secondhand retailer, opened a new flagship last month on Chuo-dori in Ginza, replacing a less visible store. 
The company expects to sell ¥3 billion a year in the 500 sqm store, which should be feasible given the return of inbound tourists, but the company continues to underperform.
Competitors are circling too, with their own upscale stores and online rivals are also growing fast.


Komehyo New Ginza Flagship Opens as Tourists Return

<ul>
<li>We remain very optimistic about the outlook for Mercari's fundamentals, both gross transaction values and operating margins.</li>
<li>The sharing economy in Japan alone remains nascent and Mercari has only just started adding on adjunct value-add services, most of which are (and will) carry high margins.</li>
<li>Even in the core fashion category, which some analysts have assumed is already reaching saturation, CtoC platforms and used retailers have barely scratched the surface as new research shows.</li>
</ul>


We remain very optimistic about the outlook for Mercari's fundamentals, both gross transaction values and operating margins.
The sharing economy in Japan alone remains nascent and Mercari has only just started adding on adjunct value-add services, most of which are (and will) carry high margins.
Even in the core fashion category, which some analysts have assumed is already reaching saturation, CtoC platforms and used retailers have barely scratched the surface as new research shows.


2022 High Conviction – Plenty of Growth Avenues for Mercari, the Apple of CtoC Services

Japan

GEO Holdings Corporation operates stores that rent and sell videos, CDs, DVDs, games, and books nationwide. The Company also buys and sells used books and CDs. GEO operates its own stores and also franchise stores.

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Geo Holdings (2681 JP)

Japan's Best Performing Retailers

There were strong improvements in both sales and profits for leading retailers last year and the following insight looks at the main winners and...

Michael Causton

Mercari's Credit Card Boosts Sales, New Gig Worker Service to Add New Revenue Stream

Mercari's Mercard, is boosting the user base and fintech revenues, while the start of a gig-work service could mean a 3rd major revenue stream....

Michael Causton

Geo Holdings: Plenty of Money in Old Rope

Consumption of used products is on the rise, with 2nd Street emerging as Japan's largest used goods retailer, challenging the dominance of Mercari.

Michael Causton

Komehyo New Ginza Flagship Opens as Tourists Return

Komehyo's new Ginza flagship is timely and should benefit from high domestic demand for luxury goods as well as a resurgent inbound trade. The...

Michael Causton

2022 High Conviction – Plenty of Growth Avenues for Mercari, the Apple of CtoC Services

Mercari is much, much more than its CtoC platform and will emerge as a pivotal part of Japan's consumer goods/services/finance distribution system...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan's Best Performing Retailers

There were strong improvements in both sales and profits for leading retailers last year and the following insight looks at the main winners and...

Michael Causton

Mercari's Credit Card Boosts Sales, New Gig Worker Service to Add New Revenue Stream

​Mercari's Mercard, is boosting the user base and fintech revenues, while the start of a gig-work service could mean a 3rd major revenue stream....

Michael Causton

Geo Holdings: Plenty of Money in Old Rope

​Consumption of used products is on the rise, with 2nd Street emerging as Japan's largest used goods retailer, challenging the dominance of Mercari.

Michael Causton

Komehyo New Ginza Flagship Opens as Tourists Return

Komehyo's new Ginza flagship is timely and should benefit from high domestic demand for luxury goods as well as a resurgent inbound trade. The...

Michael Causton

2022 High Conviction – Plenty of Growth Avenues for Mercari, the Apple of CtoC Services

Mercari is much, much more than its CtoC platform and will emerge as a pivotal part of Japan's consumer goods/services/finance distribution system...

Michael Causton

Mercari's Mercard, is boosting the user base and fintech revenues, while the start of a gig-work service could mean a 3rd major revenue stream....

Consumption of used products is on the rise, with 2nd Street emerging as Japan's largest used goods retailer, challenging the dominance of Mercari.