Japan’s youngest unicorn, Mercari, has dominated the domestic ecommerce space and wants to conquer the US next
Mercari is Japan’s youngest unicorn and first tech company pegged with the title since 2008. Lately it’s been busy shining its horn to charge into the US ecommerce market. Unlike most Japanese companies, Mercari is focusing 90 percent of its resources on the States, said co-founder and CEO Shintaro Yamada on stage today at Tech in Asia’s Tokyo conference.
As traditional ecommerce sites like Rakuten decline in Japan, Mercari has established dominance in the community marketplace space. The total worth of goods sold through the service was at more than $100 million monthly in March – more than three times the amount from the second and third largest competitors combined.
In December of last year, Shintaro revealed that Mercari was already turning a few million dollars in net profit per month. Expectations are high for the company with over $110 million of the country’s venture capital invested in the team.
Fast growth led Mercari into the US market less than one year after launching in Japan. Shintaro is no stranger to foreign business – he sold his social gaming startup Unoh to Zynga in 2010 and ran the Japanese branch until taking off to see the world in 2012.
“In the US, there’s a chance to grab something that has 10 times the profit,” he explains. Now the company tests new features in the States first and brings successful changes back to Japan; the opposite of how most Japanese companies with interests abroad operate.
At any time, there are at least 40 full-time staff in America and often more with teams moving back and forth between countries to experience the market directly. Shintaro confirmed that the app now has 19 million downloads in the US, up from 12 million at the end of July and 35 million in Japan which is up from 30 million in May. The total monthly dollar amount of goods sold through Mercari has grown sixfold since August of last year. Although not normally discussed, Shintaro revealed that 30 to 40 percent of users who downloaded the app are still using it.
“We have been really focusing on the US this past year,” Shintaro says. “It’s not that we reached out to influencers, but that all the hard work this past year finally ignited.”
Mercari recently topped the US app rankings at the number three spot, and its Uber-like campaign which aims to get users to invite friends has seen a lot of success. If you join the app from an invitation, both parties get $2 to use on purchases. The first viral chain started when a user invited 90 people who each invited their friends as well. 40 users invited over 1,000 people.
In terms of items sold in the States, it’s still mostly women’s fashion like in Japan, with brands like Louis Vuitton and Victoria’s Secret proving popular. Shintaro confirmed in a follow up interview that the top five categories in America are cosmetics, women’s tops and blouses, cell phones and accessories, women’s jewelry, and women’s shoes.
Although Mercari still hasn’t raised any venture capital from outside Japan, Shintaro says he has been in close talks with American and European VCs since the beginning of this year. He does not seem concerned by Rakuten’s recent acquisition of fashion marketplace app Fril, even though the purchase combines the number two and three community marketplaces in Japan. He is committed to the global success of Mercari and eyeing England next.
This is part of the coverage of Tech in Asia Tokyo 2016, our conference taking place on September 6 and 7.