There may be few people who associate “sales” with Mercari Group. However, Mercari’s sales organization is currently expanding and evolving. In fact, Mercari is developing a fairly unique business portfolio, and this unlocks big potential to maximize sales efforts and make the business grow. Let’s dive deep into that potential.

Exactly what kind of strategy does Mercari have in mind? We sat down with Tsugumasa Egawa (@tsugu), VP of Mercari Business Solutions, for an hour and learned about his leading role in enhancing Mercari’s sales organization and establishing Mercari’s advertising business.

Combining finished products with business potential to maximize sales

——Since joining Mercari in 2024 as VP of Mercari Business Solutions, you have led various endeavors such as enhancing Mercari’s sales organization and establishing Mercari’s advertising business. Could you again share your thoughts on Mercari’s business potential and uniqueness, and the problems you’ve encountered?

@tsugu: I feel that the biggest potential of Mercari’s business is in its products. After all, they’re the core of our business. We have the technical ability to refine all these wonderful products, and then we develop our C2C, B2C, Fintech, and on-demand work service businesses around those products.

I don’t think there are any other Japanese companies with a business portfolio like ours. A lot of companies combine businesses, like fintech and commerce, or commerce and advertising, but having a business portfolio that also includes an on-demand work business is pretty unique. This uniqueness is also our strength, as work services are desirable in almost every area. Businesses in almost all industries need to hire people, so having an on-demand work business is significant in terms of the size of our target audience. After our on-demand work service, our next largest business is payments, and this serves as a platform for our B2C business Mercari Shops.

Tsugumasa Egawa (@tsugu)

There are currently 1.77 million corporations in Japan, and our on-demand work business Mercari Hallo can service corporations in many different industries. Our B2C business Mercari Shops mainly focuses on wholesale and retail, which accounts for about 25% of those 1.77 million corporations. Considering industry structure, having an on-demand work business helps us streamline sales for both B2C and Fintech and create a structure that solidly connects our services through upselling and cross-selling. Then, adding our advertising business to that generates the effect of boosting the top line and will help us maximize per-capita productivity. I think that’s pretty amazing, if I do say so myself (laughs).

——From an industry structure perspective, there’s definitely a lot of potential to maximize our strengths! Could you tell me where Business Solutions is at now?

As I mentioned before, the combination of having wonderful products and servicing such a large portion of the industry will become very important.

The Mercari app exists as a platform that connects users who use Mercari Group services and corporations such as retailers, manufacturers, and service industry businesses. This platform includes not only our C2C marketplace but also Mercari Shops and our Crossborder business, and gives corporations the option to run advertisements in addition to selling items.

In terms of improving convenience for users outside of this platform, users can use Merpay to make external payments and find work through Mercari Hallo. This creates a very unique circular structure of different forms of money inflow and outflow inside and outside the platform.

What’s unique about our C2C business is that a user can be both the buyer and seller. When a user sells something on Mercari, they receive the money for the sale as sales proceeds in the platform, and those proceeds can be used to buy an item using Merpay. Then, that item can be sold again on Mercari, completing the cycle. This circular structure has already brought about synergy that encompasses services inside and outside the platform. We want to maximize this synergy, that is, get users to use our services more frequently so that we can provide corporations with bigger solutions. Companies can sell items using our e-commerce service Mercari Shops and find workers (users) with Mercari Hello. Even if a company doesn’t have a Mercari Shops store, they can reach our large number of users by introducing Merpay payments. What’s important here is the circulation of value inside and outside the platform. Going forward, we will strengthen the services within the platform and expand more services to outside the platform. I feel that there’s potential in accelerating the business in both directions.

——I see! Are you already feeling the synergy from maximizing the use of the Group’s assets?

@tsugu: To be honest, we’re still optimizing things as we go. Our business is growing at an astonishing pace, so we’re really in the process of making changes along the way.

But we already know that mega-enterprise corporations find it attractive that we can offer our multiple services as solutions. For instance, a large-scale electronics store could introduce our Merpay payment system, consider listing items on our B2C service Mercari Shops, and hire part-time workers to work in their stockrooms using Mercari Hallo. They can also make use of our advertising business to test whether they should list items on Mercari Shops. If the advertisements drive traffic to their website and lead to sales, they could open a shop on Mercari Shops. I’m sure there are many other ways we can combine assets to offer sales solutions that I haven’t even thought of yet.

——You just mentioned that it’s important to have a solid cycle that encompasses services inside and outside of the platform. Having a wide range of items offered by both B2C and C2C sellers is very attractive for buyers. On the other hand, considering that users are also sellers, does having B2C sellers on the platform take sales opportunities away from C2C sellers?

@tsugu: There might be some contention in the future, but there are also many areas where this wouldn’t occur. There are certain items that are difficult to sell C2C and that only corporations can sell. For example, C2C sellers are unlikely to sell consumables or high-end food products, and users will buy these from corporations instead as it feels safer.

You could say that there’s overlap in terms of selling new and used versions of the same product, but this is not a bad thing and just increases the choices available to the user. For instance, they may have been looking for a used item but found it new instead. This in itself is a benefit to the user, and they’re free to choose which product they want. It’s also an advantage for businesses who sell B2C, so I think these services coexist with each other well. We have to think about how to make Mercari stand out when it comes to certain categories.

——What do you mean by “stand out”?

@tsugu: Well, I think of our marketplace as a shelf. We want to provide users with the largest number of choices possible, so we want to increase the variety and quality of products we have on the shelf. For example, crab sold really well on Mercari Shops last year. Once the information that “crab is cheap on Mercari” gets out and people associate crab with Mercari, users will start to use the app more and more.

However, one other thing we have to think about is the type of products that users will just buy at big online retailers like Amazon or Rakuten. We have our “core fans” who prefer to buy everything on Mercari, but other platforms might be better at certain things, like being a bit cheaper, or providing faster shipping. To compete with this, one option is to start offering products that the big online retailers don’t often sell to make it more well known that Mercari is the best service for buying certain types of items.

I think there’s real potential for that in terms of items that are only sold in a few places. For example, it would be a big plus for us to offer items that most other online retailers don’t sell, like a certain shampoo that’s only available at hair salons, or idol goods to appeal to the fandom culture that is really compatible with how people use Mercari. It’s difficult to differentiate ourselves solely based on types of items, so thinking in terms of distribution scale could lead us to a new “winning formula.”

Having bold goals to find the winning formula

——What will you be prioritizing first?

@tsugu: That’s a good question… I just mentioned a “winning formula,” but figuring out how to reproduce a winning formula is most important. There’s no point in just using it once. Sometimes we’re successful in the categories we aim to be successful in, but we have to be able to reproduce that strategy for other categories.

——So, making a strategy that can be reproduced means finding the “winning formula.” However, improving things in the organization in order to implement that strategy is also important, right?

@tsugu: Yes, that’s exactly what I meant by “winning formula.” When implementing a strategy, I want the people in that organization to be eager to aim for bold goals or create new businesses, and to be ready to take on anything. How can we achieve disruptive growth like a startup? I think the key lies in how to identify essential user needs. And when doing so, it’s really important to aim big. I truly believe that setting big goals changes the way you think about a problem and makes your strategy more precise.

Even a great strategy won’t get you very far if you aren’t ready to take on a challenge. For those who already have that kind of mindset, taking on challenges will probably be really fun! We’re still in the phase of making everything on our own, but now is the time to find a clear winning formula and implement it with confidence. We might fail to find a good strategy and have to start over, but I want people to see that as part of the challenge.

Not to be too negative, but Japan’s economy is stagnant, and I think the country is in a lull. Looking at GDP and growth rate per capita, it’s clear that Japan is falling behind other countries. The same thing is happening in the tech industry, which is approaching a stagnant period.

But despite all this, Mercari has a strong core business, brand power that we’ve built up over the years, and ample resources. Also, not many companies have the ambition to further diversify their business from that point. One other thing to note is that Mercari has 23 million active users. Having all these group assets and being able to try different things to achieve a bold goal actually makes us extremely lucky. Startups really have it hard. They often run out of money or people… (laughs)

Becoming a business that can accelerate growth in the stagnating Japanese economy

——So, could you share the Business Solution organization’s vision for the future?

@tsugu: Going forward, we’ll be standardizing operations across the B2C, Fintech, on-demand work service, and advertising businesses, and designing synergy to improve operational productivity.

These four businesses are currently operating in their own ways, and we want to standardize everything, from our approaches to getting leads, developing actionable plans, business negotiations, and securing contracts. For small-to-medium businesses (SMBs), our goal is to gain merchants efficiently through inbound strategies and BPO, while for the middle segment, we will use outbound strategies so that we can sell Merpay, Mercari Hallo, and Mercari Shops as a package. Also, we have specialists who deal with mega enterprises (ENTs).

We’ll be entering a phase where we create a template for all four businesses and then broaden the range of our products. This will involve scoping the needs of clients, then devising new products that will sell within each industry based on those needs and creating solutions for upselling. Ultimately, if we can provide new solutions incorporating all of Mercari’s group assets as a single “entity,” we will have created a significant winning strategy. Well, it’s easy to talk about it. It’s very hard to actually do. (laughs) It’s hard because no company in history has ever accomplished it. Customizing services and then combining those services to provide individual solutions to clients would mean very poor productivity, right? I’m aware that it will be a big challenge, but I think that also makes it interesting.

If we do it, we want to be the best. But, we don’t want to just focus on size; we want to provide services to as many clients as possible. We want to improve the user experience and user satisfaction, which will then allow us to become a business that can further accelerate Japan’s stagnant economic growth. That’s the dream, at least. (laughs)

We are currently laying the foundation to achieve all this, and I hope that those who join us will continue to take on new challenges. By introducing new systems combining products and sales, we can take our growth to the next level. This is an exciting time, and we want everyone to enjoy it with us.

I really hope that more and more people will use more of the assets we’ve gained from our trials to take on their next challenge. With an eye on the future, let’s Go Bold!