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    Zozo General Information & Financial Performance: Customer Value Proposition

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    Ái Thi Dương
    Zozo was established in 2004 and operates primarily through Zozotown, an e-commerce site for consignment sales of fashion items. In 2019, Zozo had gross merchandise value of ¥345 billion with most sales coming from consignment and used goods. It targets customers in their 20s to 30s and has over 1,300 physical stores offering brands. While Zozo has credibility in fashion, its own clothing brand Zozosuit has struggled due to inexperience in production and supply chain management.

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    Zozo General Information & Financial Performance: Customer Value Proposition

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    Ái Thi Dương
    141 views4 pages
    Zozo was established in 2004 and operates primarily through Zozotown, an e-commerce site for consignment sales of fashion items. In 2019, Zozo had gross merchandise value of ¥345 billion with most sales coming from consignment and used goods. It targets customers in their 20s to 30s and has over 1,300 physical stores offering brands. While Zozo has credibility in fashion, its own clothing brand Zozosuit has struggled due to inexperience in production and supply chain management.

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    ZOZO FASHION

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    Zozo was established in 2004 and operates primarily through Zozotown, an e-commerce site for consignment sales of fashion items. In 2019, Zozo had gross merchandise value of ¥345 billion with most sales coming from consignment and used goods. It targets customers in their 20s to 30s and has over 1,300 physical stores offering brands. While Zozo has credibility in fashion, its own clothing brand Zozosuit has struggled due to inexperience in production and supply chain management.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    141 views4 pages

    Zozo General Information & Financial Performance: Customer Value Proposition

    Uploaded by

    Ái Thi Dương
    Zozo was established in 2004 and operates primarily through Zozotown, an e-commerce site for consignment sales of fashion items. In 2019, Zozo had gross merchandise value of ¥345 billion with most sales coming from consignment and used goods. It targets customers in their 20s to 30s and has over 1,300 physical stores offering brands. While Zozo has credibility in fashion, its own clothing brand Zozosuit has struggled due to inexperience in production and supply chain management.

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    © All Rights Reserved
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    ZOZO GENERAL INFORMATION & FINANCIAL PERFORMANCE

     ZOZOTOWN established in 2004


     90% of business is composed of ZOZOTOWN, an E-commerce operation for consignment sales of
    fashion items.
     Financial highlight in 2019,
    o Gross Merchandise Value: ¥345,085 million (+6.6% yoy) with 89.4% of Consignment and
    4.6% of ZOZOUSED
    o Net sales: ¥125,517 million
     1,337 physical-stores offer 7,643 brands – FY2019
     Number of employees: 1,158 – average age: 33 – FY2019
     Number of shareholders: 28,087

    CUSTOMER VALUE PROPOSITION

     Average retail price: ¥3,900 - ¥4,500 ～ $35-$41 – FY2019 (Gross Merchandise Value/Number
    of pieces)
     Average order value: ¥7,500 - ¥9000/shipment ～ $68 - $83/shipment – FY2019 (Gross
    Merchandise Value/Number of shipments)
     Target customer: Luxury and in middle-class, 20s-30s

     Gender ratio: 32% Men; 68% Woman – FY2019


     Average age: 33.6 (Men 31.6; Woman 33.9) – FY2019

    BtoB TARGET
     Mainly individual shops, not Multinational corporations.
     Supporting everything from production to sales, enabling influencers, who are more likely
    individuals rather than celebrities to launch their own brands.
     For 2020, ZOZO aims to increase recognition of the Chinese business in cross-border e-
    Commerce and expand advertisement business by adding new advertising products.

    MARKET STRATEGY
    Society strategy

     Sponsorship and Participation of Various Events, especially events in Chiba city where company
    headquarter located.
     Main sponsor of a sport facility operated by “HONDA ESTILO Co., Ltd
     Collaborate with Soccer Team team JEF UNITED ICHIHARA CHIBA to design original uniforms
    and support branding

    Technology applications

     Allows users to measure foot 3D size with a smartphone (February 2020 - ZOZOMAT)
     “Multi-size”: Large number of Levi’s denim size (64 sizes in total February 2020)
     E-commerce: Same-day delivery service (limited areas)/Gift-wrapping service/Deferred payment
     Online community: Over 14.0 million download app WEAR – FY2019
     Has ZOZO point for users to purchase on ZOZOTOWN
     Has account on PayPay Mall to reach wide range of customers, especially over 40 years old
    customers

    Second-hand market available for sustainable use strategy

    OPERATION MODEL and CASHFLOW


    Operation model: Have back end AI to predict customers by customer data, height, weight, customer’s
    behavior on WEAR app/website

    Cashflow from ZOZOTOWN: Gross merchandise and Consignment commission

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

     Consignment shop: brands open shops in ZOZOTOWN, products are stocked as consignment
    inventory. Sales commission from each brand will be recorded as the net sales. There are 1,240
    shops on ZOZOTOWN (03/2019)
     The purchased stock shop: ZOZOTOWN purchases products from multiple brands and sells the
    products at shops operated by the company. Products price settled on ZOZOTOWN directly
    becomes the net sales. There are 5 shops on ZOZOTOWN (03/2019)
     ZOZOUSED: ZOZO purchases second-hand fashion goods from others and sell products (as
    inventory) at the shop in ZOZOTOWN. Products price settled on ZOZOUSED directly become the
    net sales. Also from Q4 of FY2018, they operated a marketplace business for shops/individual to
    sale second-hand fashion and recorded sales commission as the net sales.

    Cashflow from Private fashion brand – ZOZO

     Manufacture a portion of items with strong demands, offers and sells basic items fitting each
    user’s body shape called “Multi-size” and “custom-ordered” such as crewneck T-shirts, Slim
    tapered denim pants, Business suits (men’s only).
     Items are sold as the private brand shop “ZOZO” on ZOZOTOWN and the price of items settled is
    recorded as the net sales.

    Cashflow from BtoB Business

     ZOZO is entrusted various fulfillment related services of brands on ZOZO’s e-commerce sites
    (photographing, price settle, packaging, delivery…). ZOZO provides back-end service to 50 stores
    (FY2019).
     Commission will be recorded as net sales

    Cashflow from Advertising on ZOZO website/app

     Besides ZOZOTOWN, WEAR is another ZOZO fashion app/website offers styling content, allows
    users to post their outfits, search/save celebrities’ outfits, and exchange information/knowledge
    about fashion. There are over 14 million app downloads, and more than 9 million styling posts
    (03/2020).
     Advertisement fee generated from ZOZOTOWN and WEAR will be recorded as net sales

    Cashflow from PayPay Mall

     ZOZOTOWN shop on PayPay Mall, different from ZOZOTOWN app/website, an E-commerce site
    provides cross-category shopping other than the fashion category. There are 1,184 shops on
    ZOZOTOWN shop on PayPay Mall.
     Commission will be recorded as net sales

    NOTES:
    Zozo has serious fashion credibility, but it doesn’t yet sell much of its own product. ZOZO private brand
    (Zozosuit) is evaluated as limited experience in product sourcing, poor supply chain management and
    production control. ZOZO private brand is new (established in 11/2017) which is burdened with ageing
    brands, legacy store network.

    Source:

    Business model: https://corp.zozo.com/en/ir-info/management-policy/business-model/


    Management policy: https://corp.zozo.com/en/ir-info/management-policy/esg/

    FY2019 consolidated financial results: https://d31ex0fa3i203z.cloudfront.net/wp/en/wp-


    content/uploads/2020/04/2003_4Q_E.pdf

    2020 planning: https://d31ex0fa3i203z.cloudfront.net/assets/ja/ir/pdf/2003_4Q_web_E.pdf

    FY2019 Q&A session: https://d31ex0fa3i203z.cloudfront.net/wp/en/wp-


    content/uploads/2020/04/200430_202003Q4_QAEN.pdf

    ZOZOSUIT: https://retailinasia.com/in-markets/japan-korea/japan/zozo-a-%C2%A5700-billion-business-
    in-three-years/

    https://qz.com/quartzy/1539036/the-zozosuit-has-been-an-expensive-mistake-for-japans-zozo-inc/

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