Vision

Shaping the Future of Fashion Through Technology and Human Perspective

Roadmap to the Next Stage of Growth

Over the 20 years since the launch of ZOZOTOWN, we have combined fashion and technology, continuously evolved, and built the business foundation that makes ZOZO today. In the fiscal year under review, we are about to take the next step with a Medium-Term Business Plan to further strengthen that foundation and drive our next stage of growth. The plan sets out our roadmap for enhancing corporate value over the medium to long term.

The rapid evolution of technologies, including generative AI, is a strong tailwind for us. Fashion is a highly complex field that reflects each individual’s preferences, sensibilities, and lifestyle. Over the years, ZOZO has built unique expertise in helping each individual find their ideal style by combining our deep understanding of fashion with data and technologies specialized in the fashion field. We are confident that these strengths will deliver even greater value as technological innovation continues to accelerate.

To realize sustainable growth based on these strengths, it is essential to strengthen our organizational foundation and the resources needed for growth. At ZOZO, we have steadily strengthened those resources, including our people, technology, and financial foundation. With external tailwinds and our stronger internal foundation coming together, we believe now is the right time to take the next step in our growth.

The Medium-Term Business Plan Across Three Business Domains

Under our Medium-Term Business Plan, we have set a target of achieving ¥90 billion in adjusted EBITA for the fiscal year ending March 2030. To reach this goal, we will further strengthen ZOZOTOWN across the three business domains of "More Fashion," "Near Fashion," and "Global," while developing new growth drivers beyond ZOZOTOWN itself.

In the "More Fashion" domain, centered around ZOZOTOWN, we will further strengthen the foundation of our existing business. This domain serves as both the growth engine for ZOZO as a whole and the foundation supporting our future business expansion, including "Near Fashion" and "Global". While further enhancing our presence in Japan's fashion e-commerce market, we will deliver unique value to more customers by creating diverse touchpoints—not only online, but also in physical settings such as pop-up stores.

A key driver in this domain is the evolution of the experience delivering "your style" to each individual customer. In the ZOZOTOWN business, we are currently focusing on developing a "fashion-specialized AI agent" that deeply understands each customer's individuality and preferences, helping them find the ideal products and styles.

Fashion is a highly complex field shaped by individual preferences and sensibilities. That is why we believe that our unique expertise in helping people find their ideal style, together with the fashion-specific data and technologies we have developed over the years, will create even greater value. As technological innovation, including generative AI, continues to accelerate, we believe these strengths will become even more powerful. By understanding each customer's preferences and helping them find new fashion possibilities, we will further enhance the value of ZOZOTOWN as a platform.

In the "Near Fashion" domain, we will build new growth drivers in Japan by expanding into areas closely connected to ZOZOTOWN users. We believe that growth opportunities lie in fields such as fragrance, beauty, and lifestyle beyond fashion. By leveraging ZOZOTOWN’s 13.17 million total buyers (*1) through M&A, partnerships, and new business development, we aim to make ZOZO the place "for" fashion in a wider range of everyday scenes.

(*1) As of March 2026

In the "Global" domain, we will bring the unique value ZOZO has created by combining fashion and technology to customers around the world through services such as Lyst and ZOZOFIT, with a focus on the North American and European markets. With Lyst, a fashion shopping platform widely recognized across Europe and the United States, we aim to build a competitive advantage in global markets by leveraging the expertise and know-how we have built through our fashion e-commerce business in Japan.

Medium- to Long-Term Corporate Value and Capital Efficiency

While remaining focused on executing our Medium-term Business Plan, we are also closely monitoring changes that will shape the future business environment. Several megatrends are reshaping the fashion industry: the evolution of generative AI, which is transforming how people discover and consume fashion; the accelerating globalization of fashion through cross-border e-commerce; and shifting consumer demographics, with Gen Z and Gen Alpha emerging as key spending groups.

Given this long-term perspective, our basic policy for enhancing medium- to long-term corporate value is to steadily strengthen the profitability of our existing businesses centered on ZOZOTOWN, while pursuing disciplined growth investment.

To balance growth investments with shareholder returns, we will continue to improve capital efficiency and strengthen cash flow. At the same time, we will maintain our policy of a dividend payout ratio of 70% or higher, aiming to deliver both sustainable growth and strong shareholder returns.

Establishing Effective Corporate Governance

Enhancing effective governance is essential for long-term corporate value creation. On ZOZO’s Board of Directors, members with diverse backgrounds—including independent outside directors—actively discuss business strategies and key decisions.

In addition to regular board meetings, we hold dedicated Strategy Review Sessions where directors discuss ways to achieve sustainable corporate value. Leveraging the expertise and unique perspectives of each director, including our outside directors, we ensure sufficient time for discussions on governance and corporate strategy.

Under this practice, we are taking steps to strengthen governance effectiveness in implementing our Medium-Term Business plan as well. We have established a clear accountability system by assigning executive officers to lead each business area, while also updating our decision-making authority so the Board of Directors can oversee management effectively without slowing down new business development. Going beyond compliance, the Board of Directors will exercise its oversight function to achieve effective governance and maintain a high level of transparency in management.

Based on this governance foundation, we are steadily advancing practices to increase corporate value by placing sustainability at the core of our management. In promoting DE&I, as a member of top management, I will actively drive efforts to advance women's participation, realize work styles free from gender stereotypes, create a workplace where people with disabilities can demonstrate their full potential, expand corporate systems that respect diverse family structures, and build an organization where people with diverse cultural backgrounds can thrive while being true to themselves.

The diverse individuality of each of our 1,876 employees (*2) is a source of value creation at ZOZO. We believe that it is a key responsibility of management to create a workplace where everyone can fully demonstrate their abilities and where people can work together based on mutual trust.

We also view the environmental impact and supply chain challenges faced by the fashion industry as important management issues. By implementing measures such as introducing renewable energy, sharing sustainability information through “elove by ZOZO,” and conducting supply chain assessments, we aim to build trust with society, strengthen ZOZO’s long-term competitiveness, and contribute to a sustainable society.

(*2) As of March 2026

Message to Our Stakeholders

To fulfill our corporate philosophy, "Inspire the world. Deliver joy every day.," ZOZO will continue to challenge ourselves to create new value and address social issues by combining the power of fashion and technology. Even as technology continues to evolve, we will always place value on combining it with human perspectives. Because we believe fashion has the power to brighten people’s lives and encourage them to take new steps forward, delivering this power to as many people as possible is our mission. In this rapidly changing era, we will continue to challenge ourselves boldly while maintaining a solid foundation, further strengthening our relationships of trust with all stakeholders.

Driving Transformative Growth with AI

Stepping into the Next Stage with AI

At ZOZO, 97% of our staff currently use generative AI in their work at least once a week (*1). This figure reflects the results of our efforts over the past several years to establish a foundation for stretching our organizational potential, including the company-wide adoption of multiple generative AI tools and the deployment of AI agents for development work to all engineers. However, this is merely a milestone on our journey. Our goal is to evolve into an organization that can redesign business processes and create new value through the use of AI. Moving beyond the stage where individuals use AI in limited ways, we aim to integrate AI into our organization-wide business processes and create value beyond what could be achieved through human capabilities alone. This is the next stage we are pursuing.

(*1) As of March 2026

In April 2026, ZOZO introduced its proprietary AI utilization index, the “All ZOZO AI Readiness Score (AZARS).” AZARS consists of two dimensions: “Individual AI Utilization Level” and “Organizational AI Utilization Level,” enabling us to visualize and assess the status of AI utilization across the company based on unified standards. A key feature of AZARS is that it applies a common standard to both engineers and non-engineers, with the aim of enabling AI to be fully utilized across the organization regardless of job function. Our goal is to achieve a state in which business processes themselves are redesigned with AI integrated into them—defined as Level 4 (*2) under AZARS. We will build an organization that can continuously create value through organizational capabilities rather than relying on individuals.

(*2)
Individual AI Utilization Level — LV.4: Transformation. Reconstructing work processes based on AI utilization and redefining the roles of humans and AI.
Organizational AI Utilization Level — LV.4: Transformation. Core operations are redesigned based on AI, with team structures and division of labor fundamentally redefined.

An Organization Evolving Through the Power of People and Technology

As AI use becomes increasingly common in the workplace, the role of engineers is undergoing significant change. While AI reduces the burden of coding, the ability to accurately evaluate and make decisions based on AI-generated outputs, as well as the ability to participate in upstream decision-making regarding “what” to create and “why” it should be created, has become increasingly important. By shifting the focus of the development organization from “how to build” to “what to build,” we believe engineers can actively participate in business discussions and enhance the overall value of our services. These changes are not limited to engineers. The growing use of AI is prompting us to rethink the nature of work across all job functions.

To support this broader transformation across the organization, we are working closely with our Human Resources Division to continuously explore the qualities and ways of working that will be required in the AI era. One of our key missions is to build an organization in which every employee is equipped with AI as a “powered suit,” enabling them to continue creating value in their own fields. To achieve this, we must first increase the number of employees who possess both strong AI utilization skills and a deep understanding of their work, regardless of their job function or department. We believe that as these employees become catalysts for sharing knowledge and expertise within their respective organizations, they will help elevate the capabilities of the organization as a whole.

Competitive Advantage Driven by Data and Expertise

ZOZO's competitive advantage lies in the vast amount of purchase data, item data, and outfit images we have accumulated through years of dedication to our fashion e-commerce business, as well as our unique expertise in helping customers find what suits them best. Fashion is an exceptionally complex field, shaped by a combination of factors such as trends, size, color, and individual preferences. Unlike products that can be easily compared based on specifications or price, there is no single standardized answer in fashion.

We believe that ZOZO’s strength lies in our ability to address this complexity through technology and data. This complexity, which is unique to fashion, cannot be fully understood by general-purpose AI alone. That is why we are developing AI by leveraging ZOZO’s proprietary data and expertise. By understanding customers’ needs and preferences that are often difficult to express in words and delivering personalized recommendations, we aim to be recognized as the place "for" fashion in the AI era. We believe that continued investment in these efforts will be a key driver of long-term revenue growth and improved profitability.

Shaping ZOZO’s Future Through Technology

The role of our Development Division is becoming increasingly important as AI and technology development become increasingly important drivers of business growth. We believe that achieving the goals of our Medium-Term Business Plan will require enhancing both the speed and quality of product development through the use of AI, enabling us to move beyond linear growth and achieve Transformative Growth. We view investment in technology not simply as a cost, but as a key driver of business growth. Accordingly, we will continue investing in our Development Division.

The role of our Technology Division is becoming increasingly important in collaboration with our group companies. By working with group companies including LYST and HIGH LINK, INC. to leverage technology and data across the Group, we will contribute to enhancing the value of the ZOZO Group as a whole. At the same time, as we advance these efforts, it is essential to address AI governance and security as integral parts of our management approach. As the scope of AI utilization expands, establishing rules for data handling and AI involvement in decision-making processes, as well as ensuring transparency, will become increasingly important. As CTO, I am committed to ensuring that we remain an organization with strong technological capabilities, maximizing business value through technology while maintaining trust through responsible risk management.

Message to Our Stakeholders

ZOZO’s business is closely tied to product development, and the quality and speed of development have a significant impact on our growth. While continuing to deepen our presence in the "More Fashion" domain outlined in our Medium-Term Business Plan, our Development Division will continue to play a key role in expanding business opportunities in the "Near Fashion" and "Global" domains through the power of technology and data. Guided by our corporate philosophy, “Inspire the world. Deliver joy every day.,” we will continue to create new value by combining the power of people and technology in the AI era and pursue sustainable growth.