Strategy & Business

Review of FY2024

In FY2024, promotional measures on “ZOZOTOWN” and “LINE Yahoo Commerce(*)” proved effective in acquiring new customers and retaining existing ones, which in turn drove record highs in product transaction volume and net sales. In addition, improvements in operational efficiency at our logistics center helped to curb personnel expenses, contributing to an increase in operating profit. As a result of these efforts, we achieved record profits for the sixth consecutive fiscal year.

Net income attributable to owners of the parent increased by 2.3% year on year. Compared with the 7.8% growth in operating profit, the pace of growth was more moderate, mainly due to a decline in the tax credit for sustainability measures that was recognized in the previous fiscal year. Nevertheless, net income was in line with our plan.

* LY Corporation Commerce represents the combined total of "Yahoo! JAPAN Shopping" and "Yahoo! JAPAN Auction".

Future Investment Strategy

Guided by our management strategy — More Fashion × Better Fashion Tech– Explore your style. Make you delighted — we have been implementing various measures.
Domestically, in August 2024, we began operations at our logistics center, “DPL Tsukuba Central,” and have continued upgrading equipment at existing sites to further strengthen our logistics infrastructure. In December 2024, we also signed an MOU with the South Korean fashion company MUSINSA Co., Ltd. for a strategic partnership, and we are currently preparing to introduce MUSINSA’s extensive K-FASHION brand lineup on ZOZOTOWN. These efforts aim to expand our existing categories while actively exploring new ones.

Our fashion coordination app, “WEAR by ZOZO,” which relaunched in 2024, helps users discover the latest fashion trends. Since May 2024, it has offered “Fashion Genre Diagnosis,” a service that uses AI to identify each customer’s preferred fashion styles. Building on this foundation, in June 2025, we launched “ZOZO Match,” a matching app powered by our proprietary AI that introduces users to someone with their preferred “vibe,” leveraging our know-how and technology.

In addition to these efforts, we are also pursuing the development of services and technologies with a view to expanding our business globally. In the United States and other countries, we offer a 3D body scanning service for individuals called “ZOZOFIT.” Furthermore, in April 2025, we welcomed LYST Ltd, the operator of the popular fashion shopping platform Lyst, into our group. By combining LYST’s brand strength and user base in Europe with our expertise in AI and measurement technologies, we aim to enhance both user experience and our profitability, accelerating our expansion in the media commerce field across Europe and the U.S. This partnership also provides access to previously hard-to-reach markets, including the European and luxury segments, taking our overseas strategy to a new stage.

Currently, the overseas fashion e-commerce market is characterized by services that prioritize customer convenience, including aggressive price competition, widespread free shipping, and flexible return policies. However, behind these trends lie structural challenges that can negatively affect overall business profitability and brand value. In response to this market environment, we are working to establish a new market model that positions “experiential value” as a key competitive differentiator.

Improvement of Capital Efficiency

We believe that generating returns above our cost of capital is essential for the continuous enhancement of corporate value, and therefore we use return on equity (ROE) as a key management indicator. To manage capital efficiently, we aim to maintain ROE above 30%, referring to levels of comparable global companies. In FY2024, ROE reached 49.4%, significantly exceeding our target. We will continue to enhance capital efficiency and corporate value through appropriate investment and the execution of our capital policies.

Shareholder Return Policy

Based on our basic policy regarding returns to shareholders, we consider various factors—including business performance, financial condition, and future business and investment plans—and distribute benefits while maintaining a balance with retained earnings. In line with this approach, in October 2023, we announced a new policy aiming for a total shareholder return ratio, including share buybacks, of over 80% on a five-year average from the fiscal year ending March 2024 onward. Pursuant to this policy, we decided on a share buyback in April 2025 and completed the repurchase in July 2025. In addition, a portion of the treasury shares we held was canceled. Going forward, we will continue striving to achieve capital returns exceeding our cost of capital, while balancing medium to long-term corporate value with returns to shareholders.

Message to Our Stakeholders

We are strengthening our management foundation from both financial and sustainability aspects to achieve continuous growth. While maintaining capital-efficiency, we actively incorporate ESG initiatives, engage in constructive dialogue with stakeholders, and reflect feedback from ESG rating agencies in our management system. As a result, we have received high external recognition, including the highest rating of “AAA” in the MSCI ESG Ratings and selection to the “A List” in CDP’s climate change category. By signing an MOU with the South Korean fashion company MUSINSA and acquiring LYST as a subsidiary, we are steadily capturing new growth opportunities. As a platform company in the fashion industry, we will continue delivering valuable services to our stakeholders while pursuing our corporate philosophy, “Inspire the world. Deliver joy every day.”