< Fashion and Apparel Market >

The domestic market for clothing and personal belongings (apparel, shoes, footwear, Japanese/Western umbrellas, bags, trunks, handbags, sewing supplies, jewelry, and accessories excluding precious metals) is expected to be worth approximately 10.2 trillion yen in 2020, of which the fashion eCommerce market is assumed to be worth approximately 2.0 trillion yen. (Our estimate is based on the Current Survey of Commerce and Market Research on eCommerce published by the Ministry of Economy, Trade and Industry.) Although the overall size of the fashion retail market, including offline stores, shrank due to the spread of COVID-19, the eCommerce market continued to grow and rapidly shifted online. However, the ratio of the eCommerce market to the total fashion retail market (hereinafter referred to as "EC penetration") is still only about 20% in Japan, while it is around 30% in Europe and the U.S. This suggests that there is still much room for growth.

We classify the fashion eCommerce market into three areas: high price range, medium price range, and low price range.

Since our establishment, we had been building up our brand portfolio by opening stores mainly in the high and medium price range. However, in the past few years, we have been attracting brands in the low price range to meet diversifying needs. We will strive to attract more brands without limiting the price range in the future.

Based on an estimate that the fashion eCommerce market size is approximately 2.0 trillion yen, it can be said that our market share in terms of Gross Merchandise Value (excluding other GMV) is still around 20%. We will strive to acquire further growth opportunities by comprehensively increasing the number of brands while paying close attention to the branding of our website.

＊In estimating the market share, we used the figures published from January 2020 to December 2020 for comparison.

< Cosmetics Market >

The domestic cosmetics market is estimated to be worth approximately 2.2 trillion yen in FY2020. The market shrank to about 85% of the previous year's level due to the inbound demand that almost disappeared because of the spread of COVID-19, as well as a drop in domestic demand due to the expansion of remote work and voluntary restraint in going out (our estimate is based on a report by the Yano Research Institute). As the impact of COVID-19 has gradually subsided, domestic demand for cosmetics has also begun to improve. Inbound demand is also expected to recover gradually, delayed by several years.

Like the fashion retail market, the cosmetics market also experienced a rapid shift to eCommerce affected by the spread of COVID-19. On the other hand, the EC penetration rate in FY2020 is less than 10%, which is even lower than that of the fashion retail market (our estimate is based on a report by Fuji Keizai and market research on eCommerce published by the Ministry of Economy, Trade and Industry).

We began handling cosmetics in March 2021. We are attracting a wide range of both domestic and international cosmetics brands. We will strive to grow this business by leveraging the compatibility with existing users who purchase fashion /apparel items.