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Japanese C2C marketplace app unicorn Mercari files for IPO

Mercari

The Bridge 2018.05.20

See the original story in Japanese. Tokyo-headquartered Mercari announced on Monday that its IPO application to the Tokyo Stock Exchange (TSE) has been approved. The company will be listed on the TSE Mothers Market on 19 June. Daiwa Securities will lead the underwriting. Mercari was founded in 2013 by Shintaro Yamada who previously founded social game developer Unoh (subsequently acquired by Zynga). The company is well known for offering a mobile-focused C2C (consumer-to-consumer) marketplace but recently launched a bike-sharing service called Merchari as well as Mercari Fund to invest in other startups while developing a financial service called Merpay. According to the consolidated statement as of June of 2017, they posted a revenue of 22 billion yen (about $200 million, about 180% increase from last fiscal year) with an ordinary loss of 4.2 billion yen ($38 million, 1,200% increase). Led by the company’s founder/CEO Shintaro Yamada (28.83%), United (10.59%), co-founder Hiroshi Tomishima (7.20%) and Global Brain (5.60%) head up the top investors’ roster. See our past coverage of Mercari here. Edited by “Tex” Pomeroy

See the original story in Japanese.

Tokyo-headquartered Mercari announced on Monday that its IPO application to the Tokyo Stock Exchange (TSE) has been approved. The company will be listed on the TSE Mothers Market on 19 June. Daiwa Securities will lead the underwriting.

Mercari was founded in 2013 by Shintaro Yamada who previously founded social game developer Unoh (subsequently acquired by Zynga). The company is well known for offering a mobile-focused C2C (consumer-to-consumer) marketplace but recently launched a bike-sharing service called Merchari as well as Mercari Fund to invest in other startups while developing a financial service called Merpay.

According to the consolidated statement as of June of 2017, they posted a revenue of 22 billion yen (about $200 million, about 180% increase from last fiscal year) with an ordinary loss of 4.2 billion yen ($38 million, 1,200% increase). Led by the company’s founder/CEO Shintaro Yamada (28.83%), United (10.59%), co-founder Hiroshi Tomishima (7.20%) and Global Brain (5.60%) head up the top investors’ roster.

See our past coverage of Mercari here.

Edited by “Tex” Pomeroy

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Japan’s Mercari forays into bike-sharing service with first launch in Fukuoka

The Bridge 2018.03.03

See the original story in Japanese. Japan’s Souzoh operating the local community app Mercari Atte, a subsidiary of Japanese unicorn Mercari behind the c2c (consumer-to-consumer) marketplace app under the same name, announced last month that it would enter the bike-sharing business with a new service called Merchari. The firm launched the service on Tuesday within Fukuoka City. Merchari is a jointly-managed bike-sharing service. Users can rent bicycles at Merchari’s bicycle ports shown in the app and return them at ports near each destination. It charges 4 yen (about 4 cents) per minute for riding. Use time is measured from when a user unlocks the smart lock on a bicycle using QR code until when he finishes riding and locks it. The firm launches the service for iOS in advance. Gai Inoue, Product Manager of Souzoh, explained about the service: This service is assumed to be used in a short time of around 15 minutes, so we set the charge plan for promoting frequent use in a short term. The service will be provided based in Hakata, Tenjin and the waterfront area within Fukuoka City. The firm had prepared 50 ports and 400 bicycles at the time of launch and will…

L to R: Ryusuke Matsumoto (Executive Officer, Mercari / CEO, Souzoh), Gai Inoue (Product Manager in charge of Merchari, Souzoh)

See the original story in Japanese.

Japan’s Souzoh operating the local community app Mercari Atte, a subsidiary of Japanese unicorn Mercari behind the c2c (consumer-to-consumer) marketplace app under the same name, announced last month that it would enter the bike-sharing business with a new service called Merchari. The firm launched the service on Tuesday within Fukuoka City.

Merchari is a jointly-managed bike-sharing service. Users can rent bicycles at Merchari’s bicycle ports shown in the app and return them at ports near each destination. It charges 4 yen (about 4 cents) per minute for riding. Use time is measured from when a user unlocks the smart lock on a bicycle using QR code until when he finishes riding and locks it. The firm launches the service for iOS in advance. Gai Inoue, Product Manager of Souzoh, explained about the service:

This service is assumed to be used in a short time of around 15 minutes, so we set the charge plan for promoting frequent use in a short term.

The service will be provided based in Hakata, Tenjin and the waterfront area within Fukuoka City. The firm had prepared 50 ports and 400 bicycles at the time of launch and will increase them to 200 ports and 2,000 bicycles by this summer. Ryusuke Matsumoto, CEO of Souzoh, explained the reason why they had chosen Fukuoka as a place for service launch.

That is because we already have a customer support base in Fukuoka and this city consists overall of flat terrain suitable for cycling.

Additionally, we regard Fukuoka as a place where we can fill a gap of public transportation through improvement of the convenience of town transport within midtown.

The spec of rental bicycle in Merchari is as follows: 20-inch wheel, three-stage gear, without motor power assistance and made in Japan. It also has smart lock unlockable by QR code, provided by Japanese connected lock developer Tsumug. In addition, GPS is mounted on the bicycle so that users can grasp the bicycle location in real time by using the app.

Joint management to handle troubles

One of the features of this service is being managed jointly with local companies or individuals. 13 partner companies participated in the port provision at the time of launch, namely, Apa Hotel, Investors Cloud (TSE:1435), Family Mart, and Shinseido. Souzoh continues to ask the public to provide vacant spaces in individual housing or retailers, as well as the same of local private companies.

By making vacant spaces in front of houses into bicycle ports, new convenient lifestyle can be expected, like leaving house by a rental bicycle and dropping it off anywhere. We also think it allows retailers to increasing opportunity for customer to visit there.

The support service including monitoring and fault / trouble handling system is provided for 365 days. Tying up with Nishi-Nippion Railroard, Souzoh runs support trucks across town in order to move / pick up left bicycles in the wrong place or disabled bicycles.

To users who cooperated in fault handling or trouble prevention, the firm gives Merchari mileage to apply a concrete joint management system. A user is given mileage by putting a left bicycle back to ports or reporting a disabled bicycle via the app.

Ito said:

We have to adjust the imbalance among ports having excess / insufficient bicycles by relocation or to take measures to left bicycles. Since there is a limit to handle these problems by one company, we plan to ask supports by individuals and companies.

To do this, we develop various systems to give users a sense of satisfaction such as, motivate stimulation by incentive, mileage giving, game-like factor to find left bicycles, or visualization of outcomes.

Service collaboration in the future

Merchari mileage cannot be used as point in the flea market app Mercari as of now, but the firm will explore the possibility of the service collaboration in the future. The firm currently plans a bonus system not allowing users to use mileage as bonus points but giving them additional services or novelties according to a certain amount of mileage.

Ito added:

You see Merchari in the town at a glance and can ride it quickly. We image such a concept.

The firm is considering further service development to new areas, although when and where have not been decided.

Translated by Taijiro Takeda
Edited by “Tex” Pomeroy

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Japanese hottest unicorn Mercari expands AI research with Sharp and academia leaders

Mercari

The Bridge 2018.01.08

See the original story in Japanese. Japan’s Mercari, providing the peer-to-peer marketplace app under the same name, announced in December that it has established Mercari R4D, a Research & Development organization with the aim to deploy emerging technologies to the society. Toshiya Kimura, Manager of Engineering Department at Mercari, was appointed the head of the new initiative. The name R4D stands for ‘Research for Development, Design, Deployment and Disruption.’ Mercari has been utilizing Artificial Intelligence (AI) and Machine Learning technologies so far, and the firm will begin projects for social deployment and commercialization of these technologies in cooperation with other enterprises or educational organizations through the initiative. At this time, eight research themes jointly with Sharp and university laboratories have already been chosen, as follows: Communications with multiple locations utilizing 8K TVs with Corporate R&D Business Unit, Sharp Outletless office with wireless power feed system with Kawahara Lab, The University of Tokyo Deep Hashing Network for similar image search with Ochiai Lab, Tsukuba University 3D form estimation from product image posted on the marketplace with Ochiai Lab, Tsukuba University Background auto-specification from product image with Ochiai Lab, Tsukuba University Trust framework using blockchain with Keio University Internet of Things ecosystem…

Mercari CEO Shintaro Yamada introduces in-house AI research initiative Mercari R4D
Image credit: Sekiko Suzuki/The Bridge

See the original story in Japanese.

Japan’s Mercari, providing the peer-to-peer marketplace app under the same name, announced in December that it has established Mercari R4D, a Research & Development organization with the aim to deploy emerging technologies to the society. Toshiya Kimura, Manager of Engineering Department at Mercari, was appointed the head of the new initiative.

The name R4D stands for ‘Research for Development, Design, Deployment and Disruption.’ Mercari has been utilizing Artificial Intelligence (AI) and Machine Learning technologies so far, and the firm will begin projects for social deployment and commercialization of these technologies in cooperation with other enterprises or educational organizations through the initiative. At this time, eight research themes jointly with Sharp and university laboratories have already been chosen, as follows:

Communications with multiple locations utilizing 8K TVs with Corporate R&D Business Unit, Sharp
Outletless office with wireless power feed system with Kawahara Lab, The University of Tokyo
Deep Hashing Network for similar image search with Ochiai Lab, Tsukuba University
3D form estimation from product image posted on the marketplace with Ochiai Lab, Tsukuba University
Background auto-specification from product image with Ochiai Lab, Tsukuba University
Trust framework using blockchain with Keio University
Internet of Things ecosystem with Cross-tech Design Lab, Kyoto University of Art & Design
Application of quantum annealing technology to art field with Ohzeki Lab, Tohoku University

According to Mercari CEO Shintaro Yamada, the investment amount to these research activities has not been clearly set yet, but it will be at several hundred millions of yen (several millions of dollars)-scale next year. The research themes are chosen from mid-to long-term plans requiring 3 to 5 years, as well as ones utilizing IoT or blockchain technologies having application possibility of social infrastructure.

Research is already being undertaken in the above eight themes and more themes will possibly be added. The commercialization and deployment of research results may be brought about as a Mercari product in the future. Yamada explains the background to the foundation of R4D:

Mercari achieved 100 million downloads just the other day. Meanwhile, we have implemented the wrongful exhibit detection system utilizing AI technology or the auto-estimation of weight of items to the app for the U.S.. One of our purposes is to differentiate the app by technologies through R&D.

The firm plans to enhance its engineer structure to 1000-staffer organization from current 100-staffer one. In addition, it started establishment of an organization capable of scaling by micronizing each function. Kimura explains the firm’s future vision:

As Fujifilm engaged in development of cosmetics, we may start different business in the future and are considering how to make good use of our owned technologies.

As the Japanese artist Sputniko!, a renowned British/Japanese artist and designer, who joined the team as Senior Producer, various direction of deployment can be seen, for example utilizing technologies which are hard to deploy immediately into a form of design or art. The firm focuses on research as well as commercialization and visualization of technology jointly with external research organizations.

Translated by Taijiro Takeda
Edited by “Tex” Pomeroy

news

Japanese marketplace app Mercari launches own fund to invest in C2C startups

Mercari

Takeshi Hirano 2017.07.07

See the original story in Japanese. In January of 2016 Japanese C2C (consumer-to-consumer) marketplace app Mercari announced a 450 million yen (about $4.1M US dollars) investment in Base, the Japanese version of Shopify, effectively shocking it back to life. Somehow it feels as if the Japanese entrepreneurial ecosystem has been enriched. On Tuesday Tokyo-based Mercari revealed their project “Mercari Fund” to invest in startups specialized in C2C products/services and marketplaces. It is an “investment project” with Mercari itself making the investments rather than establishing an investment arm or subsidiary. The companies invested in will also be considered for partnerships with Mercari’s services, such as Mercari (marketplace app) and Mercari Atte (a service enabling users to sell/buy stuff on a meeting basis). Up to now, Mercari has been investing in startups such as Base (Shopify-like instant e-commerce platform), Rentio (rental service of home appliances and camera), Flamingo (language learning service). In February of this year they acquired Zawatt, the Japanese startup which has been operating the Sumaoku flea market app. Although I confirmed the company’s goals, I feel that the main purpose is to create an economic zone with Mercari at the center, meet the needs of even more users, and…

See the original story in Japanese.

In January of 2016 Japanese C2C (consumer-to-consumer) marketplace app Mercari announced a 450 million yen (about $4.1M US dollars) investment in Base, the Japanese version of Shopify, effectively shocking it back to life.

Somehow it feels as if the Japanese entrepreneurial ecosystem has been enriched.

On Tuesday Tokyo-based Mercari revealed their project “Mercari Fund” to invest in startups specialized in C2C products/services and marketplaces. It is an “investment project” with Mercari itself making the investments rather than establishing an investment arm or subsidiary. The companies invested in will also be considered for partnerships with Mercari’s services, such as Mercari (marketplace app) and Mercari Atte (a service enabling users to sell/buy stuff on a meeting basis).

Up to now, Mercari has been investing in startups such as Base (Shopify-like instant e-commerce platform), Rentio (rental service of home appliances and camera), Flamingo (language learning service). In February of this year they acquired Zawatt, the Japanese startup which has been operating the Sumaoku flea market app.

Although I confirmed the company’s goals, I feel that the main purpose is to create an economic zone with Mercari at the center, meet the needs of even more users, and carve out a secure place for themselves. One example is Kauru, Mercari’s new service released in May, it takes the established market of books and gives an enriched user experience by providing them with estimated market prices from information gained when they input a barcode.

See also:

Base, Japan’s answer to Shopify, snags $14M to strengthen payment solutions unit

It is possible to tackle this type of specialized service through their own initiative alone, but if they are looking to expand the economic zone more speedily, investment will be a natural way. I also confirmed this, but we can assume there will be more cases of acquisition, similar to Zawatt. Regarding concrete methods of collaboration, the company is considering further collaborations with Mercari ID and Atte, and has plans to make this information public in the future.

Also, while the individual investment amount will not be disclosed, keeping in mind the considerable investment volume of 450 million yen in Base in January of last year, we can think of it as being in the investment amount range where business synergies are felt and adjust it individually. Unlike an investment fund that keeps external funds here and there, it will be an investment project purely for business synergy.

Translated by Amanda Imasaka
Edited by Masaru Ikeda

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Japanese C2C marketplace app Mercari to acquire Asia-focused auction site Smaoku

Masaru Ikeda 2017.02.20

Japanese C2C(consumer-to-consumer) marketplace app producer Mercari announced today that it will acquire Zawatt, the startup behind a Japan-based online auction site catering in brand goods, called Smaoku. The deal takes effect as of Feb.27 but financial details thereof have not been disclosed. Smaoku (short for Smart Auction) allows users to buy/sell authentic second-hand items vis-a-vis other users. Last May, English and traditional Chinese interfaces became usable in addition to the Japanese one, aiming to serve U.S., Hong Kong, Taiwanese and Singaporean buyers. Since being established in May of 2011, Zawatt has released several web services including WebScope (social list bulletin board) and Ohako (karaoke companion finder). The company launched Smaoku in October of 2013 and won KDDI Mugen Labo’s 5th batch demo day with the ‘real-time auction’ concept that makes users feel as if they are at a real auction site when buying items online. In 2015, Zawatt raised 250 million yen(USD 2 million) from IMJ Investment Partners (IMJ-IP), plus China’s SIG Asia Investments and its partner VC firm MS Capital of Japan. Upon the acquisition at this time, Zawatt co-founder and CEO Daisaku Harada will join Mercari while Smaoku will continue to be run by the current staff. See…

Japanese C2C(consumer-to-consumer) marketplace app producer Mercari announced today that it will acquire Zawatt, the startup behind a Japan-based online auction site catering in brand goods, called Smaoku. The deal takes effect as of Feb.27 but financial details thereof have not been disclosed.

Smaoku (short for Smart Auction) allows users to buy/sell authentic second-hand items vis-a-vis other users. Last May, English and traditional Chinese interfaces became usable in addition to the Japanese one, aiming to serve U.S., Hong Kong, Taiwanese and Singaporean buyers.

Since being established in May of 2011, Zawatt has released several web services including WebScope (social list bulletin board) and Ohako (karaoke companion finder). The company launched Smaoku in October of 2013 and won KDDI Mugen Labo’s 5th batch demo day with the ‘real-time auction’ concept that makes users feel as if they are at a real auction site when buying items online.

In 2015, Zawatt raised 250 million yen(USD 2 million) from IMJ Investment Partners (IMJ-IP), plus China’s SIG Asia Investments and its partner VC firm MS Capital of Japan.

Upon the acquisition at this time, Zawatt co-founder and CEO Daisaku Harada will join Mercari while Smaoku will continue to be run by the current staff.

See also:

Japan’s Smart Auction is a destination for fashionable working ladies

Edited by “Tex” Pomeroy

news

Japan’s C2C marketplace app Mercari secures $74 million series D round

Mercari

Takeshi Hirano 2016.03.02

This is the abridged version from our original article in Japanese. Tokyo-based Mercari, the Japanese startup behind C2C (consumer-to-consumer) marketplace app under the same name, announced today that it has fundraised 8.4 billion yen ($74 million) in a series D round. Participating investors include Globis Capital Partners, World Innovation Lab (WiL), Global Brain, Mercari’s board members, Mitsui & Co., Development Bank of Japan, and Japan Co-invest Limited Partnership. With the latest funding, the company has fundraised a total of 1.26 billion yen ($110 million) since its launch in February 2013. Coinciding with this announcement, the company disclosed that the app has surpassed 25 million downloads in Japan and 7 million downloads in the US, and has transacted more than 10 billion yen ($88 million) in deals through the platform. They claim that the primary purpose of this round is to boost global expansion, especially in the US. In addition, they will use the funds to develop new business at Souzou, a subsidiary of Mercari, as well as strengthening the team for mergers and acquisitions, and investing in other businesses. See also: Japanese mobile flea market app Mercari raises $14 million, will expand to US market Japanese flea market app Mercari…

This is the abridged version from our original article in Japanese.

Tokyo-based Mercari, the Japanese startup behind C2C (consumer-to-consumer) marketplace app under the same name, announced today that it has fundraised 8.4 billion yen ($74 million) in a series D round. Participating investors include Globis Capital Partners, World Innovation Lab (WiL), Global Brain, Mercari’s board members, Mitsui & Co., Development Bank of Japan, and Japan Co-invest Limited Partnership. With the latest funding, the company has fundraised a total of 1.26 billion yen ($110 million) since its launch in February 2013.

Coinciding with this announcement, the company disclosed that the app has surpassed 25 million downloads in Japan and 7 million downloads in the US, and has transacted more than 10 billion yen ($88 million) in deals through the platform. They claim that the primary purpose of this round is to boost global expansion, especially in the US. In addition, they will use the funds to develop new business at Souzou, a subsidiary of Mercari, as well as strengthening the team for mergers and acquisitions, and investing in other businesses.

See also:

Translated by Masaru Ikeda
Edited by Kurt Hanson

news

Japanese mobile flea market app Mercari raises $14 million, will expand to US market

Mercari

Takeshi Hirano 2014.03.31

See the original story in Japanese. Tokyo-based Mercari, the startup behind the mobile flea market app of the same name, announced today it has raised 1.45 billion yen (approximately $14.1 million) from Global Brain, Globis Capital Partners, Itochu Technology Ventures, GMO Venture Partners, and other unnamed investors. Coinciding with this funding, Fumiaki Koizumi, who had been serving as a part-time director, was appointed as a full-time officer. In addition, Shinichi Takamiya, the chief strategy officer at Globis Capital Partners has joined the board of directors. Since the service’s launch back in July, the Mercari app has surpassed one million listed items, growing at a pace of 10,000 items every day (as of last December). Their daily submissions recently grew to tens of thousand of items, and total transactions on the platform also reached several million of US dollars. The app has seen 1.5 million downloads to date. Furthermore, the company is planning to launch a subsidiary in the US to begin its international business operations. Mercari co-founder Ryo Ishizuka, former senior architect at Rock You, will be appointed as a representative for the US company. The company’s CEO Shintaro Yamada told us a little about who their typical users are,…

See the original story in Japanese.

Tokyo-based Mercari, the startup behind the mobile flea market app of the same name, announced today it has raised 1.45 billion yen (approximately $14.1 million) from Global Brain, Globis Capital Partners, Itochu Technology Ventures, GMO Venture Partners, and other unnamed investors.

Coinciding with this funding, Fumiaki Koizumi, who had been serving as a part-time director, was appointed as a full-time officer. In addition, Shinichi Takamiya, the chief strategy officer at Globis Capital Partners has joined the board of directors.

Since the service’s launch back in July, the Mercari app has surpassed one million listed items, growing at a pace of 10,000 items every day (as of last December). Their daily submissions recently grew to tens of thousand of items, and total transactions on the platform also reached several million of US dollars. The app has seen 1.5 million downloads to date.

Furthermore, the company is planning to launch a subsidiary in the US to begin its international business operations. Mercari co-founder Ryo Ishizuka, former senior architect at Rock You, will be appointed as a representative for the US company.

fumiaki-koizumi_shintaro-yamada — From the left: Director Fumiaki Koizumi and co-founder/CEO Shintaro Yamada

The company’s CEO Shintaro Yamada told us a little about who their typical users are, and how those users behave:

Ladies and kids apparel account for the majority of items traded in the app, comprising about 70%. Our typical users are housewives living in remote areas. They sell unnecessary items to earn spending money, and they often buy a new item with the app.

Many expensive items, like consumer electronics for example, are submitted these days, and he expects to make Mercari a more comprehensive flea market platform.

So how are other flea market apps and auction services doing these days in comparison? Yahoo Auction leads this space in Japan, transacting over $500 million a month. Yamada expects his Mercari to eventually account for about 40% of the entire online flea market industry in Japan.

If that’s the case, we can estimate the leading C2C platform in Japan can transact about $200 million a month. Mercari still has a small share but has the potential to beat its competitors. Yamada expects to acquire new users on smartphone rather than going after users that live in other existing buy-and-sell platforms. The company is currently a 40-person team, with about half of those dedicated to user support.

Of course, if the company only does business in Japan, the market ceiling would be hundreds of millions of dollars. Yamada and his team often visit the U.S., and it seems they’ve been preparing international expansion since their launch. They have already started hiring in San Francisco. According to Yamada, the company figures to launch a service from a scratch in the U.S., rather than making use of what they’ve learned and built in Japan.

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Japanese mobile flea market startup Mercari adds former Mixi CFO to board

Mercari

Takeshi Hirano 2014.01.05

See the original article in Japanese To win in a competitive market, building strong management is necessary for a company. An increasingly competitive market in Japan is the flea market app space. Mercari, one of the leading players in this field, announced this past month that Fumiaki Koizumi, the former CFO of Mixi, would join as a board member. Koiziumi previously worked for Daiwa Securities SMBC and took charge of the IPOs for Mixi and DeNA. After he left Mixi, he has been supporting startups, and his recent addition to the board of directors at Trippiece drew some attention as well. At Mercari, he is currently not in a specific managerial position. But he might assume a title later on. Coinciding with this announcement, Mercari also released some interesting figures. The company says that the total number of items listed on their app has surpassed 1 million since the app went live in July 2013. They say that 10,000 items are added to the app everyday. As this market gets more competitive, what kind of strategy does Mercari have? We spoke to Shintaro Yamada, the CEO of Mercari, and Fumiaki Koizumi about this. The Bridge: First of all, I’d like…

See the original article in Japanese

To win in a competitive market, building strong management is necessary for a company. An increasingly competitive market in Japan is the flea market app space.

Mercari, one of the leading players in this field, announced this past month that Fumiaki Koizumi, the former CFO of Mixi, would join as a board member. Koiziumi previously worked for Daiwa Securities SMBC and took charge of the IPOs for Mixi and DeNA. After he left Mixi, he has been supporting startups, and his recent addition to the board of directors at Trippiece drew some attention as well.

At Mercari, he is currently not in a specific managerial position. But he might assume a title later on. Coinciding with this announcement, Mercari also released some interesting figures. The company says that the total number of items listed on their app has surpassed 1 million since the app went live in July 2013. They say that 10,000 items are added to the app everyday.

As this market gets more competitive, what kind of strategy does Mercari have? We spoke to Shintaro Yamada, the CEO of Mercari, and Fumiaki Koizumi about this.

The Bridge: First of all, I’d like to know how Koizumi-san will get involved in the management of the company.

Yamada: As we expand the business, building strong management is key. The company’s advisor, Atsushi Ishikawa (former vice-president of Unoh Inc., CSO of Wonderplanet Inc.) was the first hire of CyberAgent and understands very well what kind of problems a startup goes through as it expands. He points out these possible problems in advance. I invited Koizumi-san as CFO, but I expect him to be active in the overall business, and in PR, aggressive PR. We had been focusing on development, and couldn’t spare much resources for PR so far.

The Bridge: Koizumi-san recently joined Trippiece as well, right?

Yamada: We encourage double work, and I invested in Smartnews myself. So, we don’t have any problem with that.

The Bridge: What do you think of the flea market app space?

Koizumi: Since resources in our society are limited, I was interested in C2C transactions as a solution. And now that this trend moving forward, I’d like to be a part of it.

The Bridge: What strategy do you have for PR and marketing? Will you put advertisements in magazines and such mass media?

Koizumi: We don’t have a plan to put large resources into advertisement.

The Bridge: Japan’s C2C market won’t grow without significant effort. We previously featured classifieds site Jmty.jp and looked at their challenges. What do you think is the key to succeeding in the C2C market?

Yamada: I was talking about this with my friends who have management experience. What makes Mercari different from others is that we really care about the product. For example, we carefully look at points where users drop out from the purchasing process, and try to improve it.

Koizumi: Our customer support is simple, but we think that a good user experience is very important.

Whenever I speak with Yamada, I’m always impressed with his passion to make a perfect product. Considering that the most of the members of Mercari have been engineers, bringing new perspective to make the product more sophisticated must be important. A user-friendly interface and a solid app is inevitable for consumer service.

The competition among flea market apps will be fierce in 2014. It reminds me of the past competition in the group buying market. Stay tuned to see who can win out in this space.

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CNet Japan Startup Award nominees: Mobile C2C flea market apps – Fril and Mercari

Yiling Ding 2013.12.06

This is part one of our CNET Japan Startup Awards nominee rundown. The rest can be found here. Several C2C flea market apps have been popping up in Japan recently, including Mainichi Frima, Stulio, and CNet Japan Startup Award nominees Fril and Mercari [1]. Unlike traditional desktop-focused C2C platforms such as Yahoo Auctions, these newer marketplaces are adopting a mobile-first approach. Both Fril and Mercari have a mobile-only strategy. Sellers can complete the entire selling process seamlessly on the app – from photographing their item using their smartphone camera, to posting the listing, to receiving notifications when their item has been sold. A listing can be created in just a few minutes, and is free to create. Both apps charge a 10% commission upon purchase, and a fixed-rate transaction fee. Payment is handled by their system. By providing a payment infrastructure, Fril and Mercari grant buyers the convenience of paying through convenience stores, ATM transactions, or credit cards. Selling is also simplified into the easy processes of listing, shipping, and receiving payment. Compared to traditional platforms, the user experience is easier and comparatively frictionless. The differences Despite similarities in functionality, Fril and Mercari diverge in a few ways as well….

This is part one of our CNET Japan Startup Awards nominee rundown. The rest can be found here.

Several C2C flea market apps have been popping up in Japan recently, including Mainichi Frima, Stulio, and CNet Japan Startup Award nominees Fril and Mercari [1]. Unlike traditional desktop-focused C2C platforms such as Yahoo Auctions, these newer marketplaces are adopting a mobile-first approach.

Both Fril and Mercari have a mobile-only strategy. Sellers can complete the entire selling process seamlessly on the app – from photographing their item using their smartphone camera, to posting the listing, to receiving notifications when their item has been sold.

A listing can be created in just a few minutes, and is free to create. Both apps charge a 10% commission upon purchase, and a fixed-rate transaction fee. Payment is handled by their system.

By providing a payment infrastructure, Fril and Mercari grant buyers the convenience of paying through convenience stores, ATM transactions, or credit cards. Selling is also simplified into the easy processes of listing, shipping, and receiving payment. Compared to traditional platforms, the user experience is easier and comparatively frictionless.

The differences

Despite similarities in functionality, Fril and Mercari diverge in a few ways as well. Fril (pictured right) is primarily targeted towards females in their teens and 20s, and specifically focuses on ladies’ fashion. Mercari (pictured below), on the other hand, offers a range of product categories from ladies’ and men’s fashion to electronic appliances.

Fril’s more specific target allows it to adopt a stronger visual style, with a very girly color palette. It also provides functions that work well with its fashion focus – such as searching by brand names, shop page customization, and following other users.

Mercari, instead of focusing on fashion, differentiates itself with a strong emphasis on buyer and seller security. It uses an escrow payment system, where the payment is held by Mercari and is not transferred to the seller until both parties have reviewed each other.

China’s largest e-commerce platform, Taobao, uses a similar system, and that has been effective in offsetting the issue of low trust in a C2C transaction.

The competition

CyberAgent’s Mainichi Frima and Singapore-based Carousell are two flea market platform apps that are also mobile-only. A common feature of Mainichi Frima, Carousell, and Fril is the “follow” function. Mainichi Frima also allows users to create customized shop pages.

Where Fril and Mercari stand out, however, is that they handle the entire payment process. Both Mainichi Frima and Carousell leave it up to the buyers and sellers to figure out payments themselves. Carousell encourages face-to-face exchanges with a location function that allows buyers to search by the seller’s proximity.

The advantage of Mainichi Frima and Carousell’s model is that they allow for robust negotiations between buyers and sellers. In this sense, they provide a more accurate online representation of the offline flea market experience. However, if users are looking for a simple, frictionless experience, they will find Fril and Mercari much easier to use.

The CNet Japan Startup Awards are coming up on December 10th. ↩

news

Japanese mobile moguls on how to succeed with smartphone content

Rick Martin 2013.10.07

This is a part of our coverage of B Dash Camp Osaka 2013. On day one of B Dash Camp 2013 in Osaka, we heard an all-star panel speak on the many issues surrounding mobile content in Japan. The moderator was Katsuaki Sato, the CEO of Metaps, and the lineup of speakers included: Shinji Kimura, from news reader app Gunosy. Shin Murakami, operating officer and chief mobil office of Yahoo Japan Eiji Takahashi the president and CEO of Alim Hiroki Teshima, director and executive officer at United Inc (maker of CocoPPa). On the factors that lead to success Gunosy’s Kimura-san explained a little about their news reader application. He notes that they have a general news section, but also a new features that they released today called a content partners channel. Regarding how to succeed with mobile content, he explained: I think it’s really timing that matters. SmartNews Gunosy came out when I think many people were feeling fatigue from Twitter and Facebook. We had an image of how to solve that, with our app confronting that issue head on. In a way, were were meeting a demand, serving news via email. It just worked out to be the right…

bdash-smartphone-content — United’s Hiroki Teshima; Shin Murakami, Yahoo Japan; Eiji Takahashi. Alim; Shinji Kimura, Gunosy

This is a part of our coverage of B Dash Camp Osaka 2013.

On day one of B Dash Camp 2013 in Osaka, we heard an all-star panel speak on the many issues surrounding mobile content in Japan. The moderator was Katsuaki Sato, the CEO of Metaps, and the lineup of speakers included:

Shinji Kimura, from news reader app Gunosy.
Shin Murakami, operating officer and chief mobil office of Yahoo Japan
Eiji Takahashi the president and CEO of Alim
Hiroki Teshima, director and executive officer at United Inc (maker of CocoPPa).

On the factors that lead to success

Gunosy’s Kimura-san explained a little about their news reader application. He notes that they have a general news section, but also a new features that they released today called a content partners channel. Regarding how to succeed with mobile content, he explained:

I think it’s really timing that matters. ~~SmartNews~~ Gunosy came out when I think many people were feeling fatigue from Twitter and Facebook. We had an image of how to solve that, with our app confronting that issue head on. In a way, were were meeting a demand, serving news via email. It just worked out to be the right timing.

In terms of montetization, he added:

If you are taking about tens of millions of users, you need to work on satisfying them, and you can work out the business model at a later stage.

Takahashi started off by introducing Alim’s recently launched game Brave Frontier, noting that they ‘respect’ the structure of Puzzle & Dragons and trying to combine familiar content that Japanese users can enjoy. He disclosed some figures about Brave Frontier, which are as follows, noting that these are pretty high for an RPG:

520,000 user accounts
340,000 monthly active users
120,000 daily active users
monthly PU rate of 10% and monthly ARPPU of 5,000 yen

Takahashi also spoke a little on the use of ads vs viral marketings in promoting a mobile game:

When we started on iOS, we had an affiliation with the Famitsu app, but beyond that it was word of mouth. We had a pre-launch registration. But before our first 100,000 users, there were no ads at all. But when you reach a ceiling, you’ll need to consider investing in ads. (Moderator asks, “TV?”) I can’t say too much more (laughs).

He also acknowledge that the fate of a mobile business can be somewhat beyond your control, especially in the early days.

I think it’s complete luck, because we didn’t expecxt this at all. We had to suspend our service a few days after launch because we couldn’t quite handle the demand. We thought that we can attract a number of users, but we had no idea how much it would be. It was completely beyond our expectation.

united-yahoo — Hiroki Teshima, United; Shin Murakami, Yahoo Japan

Murakami of Yahoo Japan said that their company has over 95 million downloads across iOS and Android. Community Factory, which they bought, has over 25 million downloads in total across their apps. Noted that Kakaotalk was also doing well in Japan with 10 million downloads, even though Line is the leader here.

He appeared to envy the position of up-and-comping startups, which show more agility than an entity than Yahoo Japan ever could:

In order to get the timing right, I think if you are in a venture company you need to look at the market size of your sector. Becoming number one in a niche industry is possible, and you can catch a wave without too much hesitation.

Teshima-san from United gave a brief intro to CocoPPa, which just surpasses 15 million users worldwide. He was wearing a Mercari shirt as well, showing his support the e-commerce app that they recently poured $3 million into.

Things never go as expected, but if you have many ways to attract users, you should be ok. I think there should be a plan B and C, not just a plan A.

From the beginning I we prepared a Chinese and Korean version. We used Conyac, and it was a very simple translation, but it was good enough to help us go global. I would advise that if you think your app can go global, then don’t skimp on translation costs.

He noted that they might try expanding into the browser to offer their service on the web. He explained that collecting valuable information from people is a good way to hedge risk in business.

Mercari

Japanese C2C marketplace app unicorn Mercari files for IPO