MarketEnterprise Co.,Ltd.

The majority of net-based reuse business sales depends on "Yahoo! Auctions" operated by LINE Yahoo Corporation, and if this service were discontinued or otherwise disrupted, it could have a material impact on business performance. The Group has been working to reduce this dependence by developing an inventory-linked system and securing six sales channels including direct sales, but the transition to alternative channels remains incomplete.

The purchase of reuse goods is the source of the Group's revenue base, but changes in economic conditions, rising purchase prices due to intensifying competition, and changes in consumer sentiment may make it difficult to secure a stable supply of reuse goods in terms of both quality and quantity. The Group is addressing this through a focus on web marketing and diversification of procurement channels including home pickup, in-store, and on-site purchasing, but structural vulnerability to changes in the external environment remains.

In the reuse industry, new entrants such as flea market apps have become prominent, intensifying the competitive environment. The Group strives to build entry barriers through a unique business model utilizing web marketing, IT, and operations, but if competition intensifies further, it could affect business performance. Similarly, risks of intensifying competition due to an increase in competitors and entry by major companies also exist in the mobile communications business and digital marketing business.

Products handled in the net-based reuse business fall under "secondhand goods" as defined by the Secondhand Goods Dealer Act, and the Group operates based on permits from each prefectural public safety commission; if a violation of this law were to occur, it could have a significant impact on business activities due to permit revocation or other measures. There have been no violations since the company's founding, and identity verification, thorough management of secondhand goods ledgers, internal education, and employee testing are implemented; however, given the nature of the business, it is inherently difficult to completely prevent the purchase of stolen goods or counterfeit items, and legal risk remains inherent.

Due to regulations under the Secondhand Goods Dealer Act, personal information is acquired, databased, and stored at each stage of purchasing, sales, and shipping; if an information leak were to occur, it could affect business performance through loss of public trust and significant expenses. The Group thoroughly manages this through establishing internal regulations and operational manuals, strengthening physical management and monitoring systems, thorough employee training, and enhancing IT system security, but risks such as cyberattacks and human error cannot be eliminated.

The Group's business processes depend on in-house developed IT systems, and if the systems fail to operate normally due to natural disasters, computer viruses, unauthorized access, human error, or other causes, it could affect business performance. The Group has established a backup system utilizing multiple web services, but given the structure in which all businesses—EC, reuse, mobile communications, and digital marketing—depend on the system, the scope of impact in the event of a failure is extensive.

User traffic to sites operated by the Group depends heavily on search engine display results, and if the Group's response to algorithm changes made by search engine operators is delayed, customer acquisition efficiency could decline and adversely affect business performance. The Group strives to improve content quality and site convenience, but algorithm changes are an external factor largely beyond the Group's control.

The mobile communications business does not own its own communication infrastructure and provides services by procuring lines from external communication line providers; if long-term line disruptions or deterioration of business relationships were to occur, it could affect financial position and business results. In addition, if inventory shortages arise due to disruptions in the supply chain for communication devices, there is also a risk of losing business opportunities due to an inability to supply customers in a timely manner.

The Group holds fixed assets such as property, plant and equipment and goodwill, and if the recovery of investment amounts becomes unlikely due to a significant deterioration in the business environment or a decline in business profitability, an impairment loss could occur and affect financial position and business results. The Group conducts impairment testing based on future cash flows in accordance with current accounting standards, but there is a risk that a significant revision of book values could become necessary in the event of a sudden change in the business environment.

Taishi Kobayashi, the founder and Representative Director and President, plays an important role in brand formation through exposure in various media, and if he were to become unable to continue his duties, it could affect business promotion and other activities. The Group strives to reduce dependence on specific individuals through standardization of business processes and the recruitment and development of talented personnel, but the establishment of an organizational alternative system for brand formation remains a work in progress.