Business Model

ZOZO Group mainly develops two businesses; ZOZOTOWN business which operates the fashion e-commerce site “ZOZOTOWN” and BtoB business which supports the management of brands’ own e-commerce sites. In addition, we also operate a fashion media “WEAR” to revitalize the entire fashion industry. In the future, we will further enhance our earnings base by initiating the advertising business utilizing attractiveness of ZOZOTOWN and WEAR, and the full-scale launch of the private brand “ZOZO”.

1. ZOZOTOWN Business

ZOZOTOWN business consists 3 business forms: Consignment shop, purchased stock shop and ZOZOUSED.

The consignment shop is a business form where each brand’s products are stocked in our logistics bases as consigned inventory, and brands open their shops in ZOZOTOWN as tenant form. As of March 2018, there are 1,105 shops (excluding the private brand shop) on ZOZOTOWN. Of products price settled on ZOZOTOWN, consignment sales commission from each brand will be recorded as the net sales.

The purchased stock shop is a business form where ZOZOTOWN purchases products from multiple brands and sells the products at shops operated by the company. As of March 2018, there are 6 shops on ZOZOTOWN. Products price settled on ZOZOTOWN directly becomes the net sales.

ZOZOUSED a business form where it purchases second-hand fashion goods from individual users and others as its own inventory, and sell products at the shop in ZOZOTOWN (operated by ZOZOUSED, Inc. a subsidiary of the company). Products price settled on ZOZOUSED directly become the net sales.

From Q4 of FYE 2018, we have started to operate a marketplace business in addition to the existing purchase business. For the marketplace business, of products prices settled on ZOZOUSED, consignment sales commission from each shop will be recorded as the net sales.

2. BtoB Business

The BtoB is a business form where the company is entrusted various fulfillment related services of brands for their own e-commerce sites operation. As of March 2018, the company supports 8 companies’ own e-commerce site operations. Of product prices settled on own e-commerce sites, certain amount of commission from the companies will be recorded as the net sales.

3. WEAR Business

WEAR is the Japan’s largest fashion coordination app aimed at revitalizing the entire fashion market. Under the concept of “Fashion media where users can find clothes they want” and continuous introduction of contents and improvement of user interfaces etc., the number of app download exceeded 11 million as of March 2018. WEAR will contribute to group net sales by creating traffic to ZOZOTOWN through user generated contents and providing advertisement spot utilizing its value as a fashion media.

4. Advertisement Business

Advertisement business will gain advertisement income from client companies including brands by providing advertisement spots utilizing the user base of ZOZOTOWN and WEAR. Advertisement fee from client companies will be recorded as the net sales.

5. Private Brand Business

The private brand “ZOZO” is a business that sells in-house designed apparel items which are produced at affiliated companies of OEM manufacturers. Based on the measurement results of users from “ZOZOSUIT”, the body measurement suit developed by the company and distributed free of charge, it enables the company to offer best sized items for users.

Each item has a few thousand patterns of sizes depending on the item category. The structure of delivering ordered items instantly is in place by purchasing a certain amount of inventory from OEM manufacturers in advance for the size with higher expectation and concentration of orders. For items not in the stock, we have constructed the structure to produce and deliver items in short lead-time of less than 2 weeks. Items are sold at the private brand shop on ZOZOTOWN in Japan, and will be sold at dedicated sales sites overseas (both operated either by the company or its sales subsidiaries). Products price settled on ZOZOTOWN and the dedicated sales sites are recorded as the net sales.