Latest Business Results

In the first quarter of the fiscal year ending in June 2025, the Japanese economy has been gradually recovering, supported by improvements in employment and income environments and an increase in inbound demand. However, prolonged yen depreciation has led to higher costs and inflation, and weakening personal consumption. Meanwhile, on the international stage, prolonged conflicts in Ukraine and the Middle East continue to destabilize the global situation. Additionally, financial market trends influenced by monetary policies in Japan and the U.S. have at times resulted in sharp yen appreciation and a decline in stock price, adding to economic uncertainty. Given these conditions, a careful assessment of future economic developments is essential.

Consumers in Japan have an even stronger desire to economize and seek low prices because of rapid inflation. However, this is not the only defining characteristic of consumer spending. Purchasing activity by consumers in Japan is becoming more diverse as the range of ways people spend their money expands to reflect the different values and preferences of consumers. These trends are most pronounced on purchases made using the Internet. In this social environment, activities of the Market Enterprise Group are guided by the “optimized trading company” vision that reflects the growing diversity of consumption behavior, and the increasing interest in smart consumption has the goal of giving everyone the best options for purchasing products and services. Another goal is to use business operations to play a role in the creation of the circular economy aimed at the realization of SDGs, which have become a global trend in recent years.

The Market Enterprise Group’s vision is to operate as an “optimized trading company for the creation of a sustainable society.” Group companies are dedicated to providing products and services that match the increasingly diverse range of consumption behaviors and styles of people and for some products and services, business operators and companies. Activities include the use of the Internet to give customers a selection of purchasing channels to match their needs.

Based on the latest changes and trends in the external and internal environment, we announced a new rolling medium-term management plan on August 14, 2023. To achieve its performance goals (net sales of 30 billion yen and operating income of 2 billion yen) for the final year of the plan (fiscal year ending June 30, 2026), we are currently aiming to establish a presence in the ever-expanding reuse market by increasing investments mainly in our second-hand business for individuals. The following is a summary of the initiatives taken in the first quarter of the fiscal year ending in June 2024 to realize this plan.

Second-hand Online Business

(Second-hand business for individuals)

・Review of the optimal purchase channel according to merchandise and quantities, and optimization of staffing

・Serious consulting sales activities for the purchase of second-hand items at the customers’ homes

・Promotion of DX measures to improve productivity (System function upgrades aimed at improving operational efficiency, including the version upgrade of the auto-call system, partial automation of purchasing operations, and the introduction of RAG chat)

(Agricultural equipment)

・Strengthen credit management in response to expanding overseas sales and increasing the scale of transactions with domestic corporations

・Usability improvement of overseas cross-border e-commerce sites

(Oikura)

・IT system investments to increase the earnings of Oikura as a second-hand distribution platform

・Cooperation with the local governments for public-private sector initiatives that contribute to accomplishing the SDGs (increase the second-hand distribution of consumer products to reduce the amount of second-hand products in the trash and the environmental impact of these products)

・Conduct sales activities focused on acquiring new franchisees

Media Business

・Maintenance activities for articles in this business to accommodate search engine algorithms and development of new media related to mobile & telecommunications and preowned vehicle purchases

Mobile & Telecommunications Business

・Acquiring new line contracts by promoting simple and easy-to-understand pricing plans that meet the needs of customers, mainly through online advertising

・Increase the option attachment rate by adding option plans that are highly compatible with the user's usage scenario (increase the unit fee per line)

・Extending user contract periods and reducing cancellations by promoting plan upgrades for existing users (from 4G to 5G and from 5G NSA to 5G SA)

・Creation of new revenue opportunities at the time of cancellation (e.g., introduction of new plans based on reasons for cancellation)

As a result, net sales were 5,492 billion yen, 33.7% higher than in the third quarter of the previous fiscal year. Operating profit was 69 million yen, compared with a loss of 154 million yen one year earlier; and ordinary profit was 25 million yen, compared with a loss of 263 million yen one year earlier. Loss attributable to owners of the parent was 48 million yen, compared with a loss of 325 million yen one year earlier, mainly due to total income taxes.

Overview by Business Segment

・Second-Hand Online Business

This business is the core business of the Market Enterprise Group, which buys and sells second-hand merchandise using only the Internet and operates no brick-and-mortar stores.

To purchase second-hand merchandise, this business operates the takakuureru.com comprehensive purchasing website for all types of merchandise and other purchasing websites for specific categories of merchandise. Second-hand merchandise is sold by posting goods simultaneously on many websites, including Yahoo! Auctions, Rakuten, Amazon, Mercari, ReRe, our e-commerce site, and others. The main targets of this business are large or expensive merchandise and merchandise in large quantities. These types of merchandise are not suitable for C2C transactions because of the difficulty of packaging and sending these items. Using the C2B2C structure instead gives people confidence about the quality of merchandise and other aspects of these transactions due to the inclusion of a reputable company as an intermediary. During the past few years, we have used the knowledge acquired by operating this business to start a second-hand agricultural equipment business. In addition to operating this business in Japan, we plan to diversify this business using synergies with other group businesses, such as exporting used agricultural equipment. There are also numerous initiatives underway for enlarging the base of operations for Oikura, an Internet platform that matches sellers of second-hand items or ordinary consumers with buyers or second-hand stores.

Results by category during the first quarter are as follows.

(Second-hand business for individuals)

From the previous fiscal year, we have continued productivity improvement measures, such as optimizing purchase channels, relocating staff, and promoting DX measures, thereby vigorously strengthening our profitability framework.

As a result of these efforts, profitability in the second-hand business for individuals steadily improved, and revenue for the first quarter of the fiscal year exceeded the projections made at the beginning of the period.

(Agricultural equipment)

While overseas demand has remained strong, agricultural equipment sales experienced a temporary slowdown in growth during this first quarter due to a surge in ocean freight rates. In addition, due to the review of credit management standards to appropriately manage risk in light of the growing ratio of overseas sales to total sales, we have been able to secure appropriate lead time from the receipt of orders to the booking of sales, which caused a portion of revenue from new orders to shift into the second quarter of this fiscal year. Furthermore, the number of container vessels skipping ports has been increasing and has led to a temporary rise in inventory awaiting shipment.

As a result, the agricultural equipment segment posted lower revenues and profits in this first quarter. However, ocean freight rates are gradually stabilizing back to previous levels, and the lead time is expected to normalize over the ongoing second quarter.

(Oikura)

In the Oikura business, we kept investing in IT systems as a second-hand platform to build a larger and more powerful base for long-term earnings. Public-private sector collaboration involving the SDGs is another major theme of this business. We are establishing partnerships with the local governments to increase the utilization of markets for used consumer goods to reduce the volume of waste materials and the environmental impact of discarded items. At the end of September 2024, there were 179 of these partnerships, 37 more than at the end of June 2024, and the population coverage ratio (ratio of the total population of the local governments with the partnership to the total population of Japan) was 35.3%. Due to efforts to increase the number of purchase requests and to acquire franchisees through our owned media, the number of franchisees has remained steady. Additionally, sales have been progressing smoothly due to the increase in the number of franchisees resulting from a major partnership implemented in June 2024.

Sales increased 16.6% to 2,805 billion yen, and segment profit increased 1,882.4 % to 204 million yen.

・Media Business

The media business uses the Internet to distribute useful information concerning purchasing activities to people interested in smart consumption. This business operates nine Internet media in five categories.

　・iPhone Kakuyasu SIM Tsushin, SIMCHANGE and KASHI･ONE, which have information about mobile phones and services

　・Takakuureru.com Magazine and Oikura Magazine, which have information about selling and disposing of items

　・Beginners, which have information about buying items

　・Saiyasu-Syuuri.com, which has information about repairing items

　・UMM (Used Machine Market), a platform for buying and selling used agricultural equipment

　

During this first quarter, the total number of page views (PVs) fluctuated significantly due to the impact on search rankings of our main media, caused primarily by changes in Google’s core search algorithm implemented in the previous fiscal year. Although the ranking of our media content has shown some signs of recovery, the revenue and profit decreased compared to the same period last year.

As a result, sales decreased by 21.3% to 138 million yen, and segment profit decreased by 11.0% to 72 million yen.

・Mobile & Telecommunications Business

Consolidated subsidiary MEmobile Co., Ltd. is the primary component of this business. This company provides telecommunication services that are less expensive, simpler, and easier to understand. The main service, which uses the Kashimo brand (an abbreviation for the phrase “smart mobile” in Japanese), is an Internet connection service that uses a mobile Wi-Fi router.

During this first quarter, a large number of customers were sent to this business from our mobile phone and services media as strong collaboration with the media business increased. In addition, this business increased its exposure to media operated by other companies. At the same time, by analyzing the reasons for cancellations, we began to provide new guidance on switching from WiMAX to fiber-optic internet, to create profit opportunities in the event of cancellations. In addition, we worked to increase the fee per line by enhancing the lineup of ancillary options tailored to user usage patterns. We will continue to increase revenues by securing recurring income (income recorded monthly over the term of the user’s contract) by accumulating the number of contract lines and one-time income (income recorded all at once when a new line is acquired).

Because of these numerous marketing initiatives, sales increased by 67.0% to 2,578 billion yen and segment profit increased by 95.5% to 125 million yen.