Post on 09-Oct-2020
7Long-Term Operating Environment Changes and Initiatives Targeting New Growth
Awareness of Long-Term (a decade later) Operating Environment Changes
98
1 . E n v i ro n m e nt C ha n ge s ove r N ext D e ca d e : 7 G row t h Tre n d s
1. Transition to e-commerce
2. Shift from goods to experiences
3. Emergence of sharing economy
5. Increase in demand from inbound travelers
6. Rise of cashless payment methods
7. Change of focus from saving to investment
8. End of era of low interest rates
4. Declining birthrate and aging population
99
O p p o r t u n i t i e s , T hreats , a n d M A R U I ’s Re s p o n s e : Reta i l i n g
Thre
ats
5. Increase in demand from inbound travelersInbound travelers: 20 million → Approx. 40 million
1. Transition to e-commerceRatio of e-commerce sales: 5% → 20%
2. Shift from goods to experiencesContinuation of 3% reductions in apparel product selling prices
3. Emergence of sharing economySharing economy usage ratio: 2% → 10%
4. Declining birthrate and aging population7% reduction in working-age population, to 71 million
Transition to shopping centers and fixed-term rentalExpansion of omni-channel retailing
<Business structure transformation>
Diversity and inclusion initiatives targeting customersCompatibility with sharing economy through new businesses(Goods, space)
<Specific Response>
MAR
UI′s
Res
pons
e
Opp
ortu
niti
esHypothetical scenario in which MARUI continued to operate a department store-oriented business focused on selling goods in physical stores without any innovation (Over next decade)
100
O p p o r t u n i t i e s , T hreats , a n d M A R U I ’s Re s p o n s e : F i nTe c h
(Over next decade)
・Coordination with omni-channel retailing operations
・Collaboration with new businesses
<Specific Response>
6. Rise of cashless payment methods1. Transition to e-commerce2. Shift from goods to experiences
Continuation of 7% average annual growth rates in line with past decade
3. Emergence of sharing economy
6. Rise of cashless payment methods(cash advances)Potential contraction of cash advance market
7. Change of focus from saving to investmentPortion of family financial assets represented by stocks and investment trust receivables: of 15% in Japan, and 30%–50% in Europe and U.S.
Shift from in-house credit card to multipurpose credit card
<Business structure transformation>
Transition from credit card services to FinTech
<Business redefinition>
6. Rise of cashless payment methods (diversification of payment methods)Emergence of payment options other than credit cards
8. End of era of low interest rates
Opp
ortu
niti
esTh
reat
s
MAR
UI′s
Res
pons
e
101
I n f l u e n ce o f O p p o r t u n i t i e s , T h reat s , a n d M A R U I ’s Re s p o n s e o n Pe r fo r m a n ce : Reta i l i n g
・Threats to Retailing business to be overcome through innovations including transition to shopping centers and fixed-term rental and expansion of omni-channel retailing as well as growth initiatives in new businesses
約180
Precent 10 yearsfrom now
Fixed cost
SC / Fixed-term rental
1. E-commerce
3. Sharing economy
2. Goods→ Experiences
4. Declining birthrate,aging
population
Omni-channel retailing
Customer diversity and inclusion
<Threats>
<MARUI’s Response>
New businesses
<Opportunities>
5. Inbound
(Influence on Marginal Profit)
(sharing)
102
I n f l u e n ce o f O p p o r t u n i t i e s , T h reat s , a n d M A R U I ’s Re s p o n s e o n Pe r fo r m a n ce : F i nTe c h
・Opportunities created by cashless payment options to be steadily leveraged in the FinTech business while deploying unique initiatives merging Retailing and FinTech
Present 10 yearsfrom now
(Cash advances)
6. Cashless options
<Threats><Opportunities>
Newbusinesses
7. Saving → Investment (Payment services)
(Diversification of payment methods)
Increase in cardholders
Usage of EPOS card as main cardMarket growth
1. E-commerce2. Goods → Experiences3. Sharing economy
<MARUI’s Response>
6. Cashless options
(Influence on Transactions)
Long-term Vision for 30 years
104
A n a l y s i s o f O p e rat i n g E n v i ro n m e n t( G l o ba l O p e rat i n g E n v i ro n m e n t 3 0 Yea r s i n t h e Fu t u re )
・Global population of approx. 10 billion in 2050
・Population of emerging countries71% higher than in 2000
・Concentration of populations in urban areas (expansion of megacities)
Population Trends
Economic Climate
Climate Change and Resource Depletion
Technological Progress
・1°C–2°C rise in average global temperature in comparison to 2000
・Increased demand for food, water, and energy
・Shift toward clean energy
・Deceleration of global economic growth・Emergence of China and India
as No. 1 and 2 GDP leaders
・Approx. 40% of global GDPattributable to China and India
・More than 50% of globalpopulation connected to the Internet
・Further spread of IoT・Evolution of AI
105
MARUI GROUP’s Outlook for the Future (2050)
Realty Ideal
Balance between individuality and
coexistence
・Opposition based onnationality and ethnicity
・Globalism vs. nationalism
・Increased diversity anddilution of concept of
minorities・Connections transcending
traditional dichotomies while valuing individuality
Global income disparity
・Rising wages in developing countries, increasing economic disparity in developed countries
→Wealthy vs. low-income individuals on a global scale
・Business opportunities catering to both low- andmiddle-income individuals creating a massive globalmarket
Coexistence with the natural environment
・Inability for environment to support traditionally high production and consumption levels
→Population growth vs. resource depletion
・Survival only by businesses that coexist with the natural environment
・Renewable energy and circular economies as the norm
Inter dependent world
106
Business Opportunities and Growth Fields for MARUI GROUP
Co-Creation
Provision of options emphasizing balance between individuality and coexistence
Provision of options emphasizing coexistence with the natural environment
Provision of options for alleviating income disparity
107
MARUI GROUP’s 2050 Vision
Harnessingthe power of business
to build a world that transcends dichotomies
108
Path to 2050 Vision
Co-Creation
Inclusive Business
Inter-generational
Financial Inclusion
Inclusive Value= Happiness
Business
Approach to the Business Portfolio
110
Policies for Corporate Value Improvement (Prior)
・Transformation of business structure from prior flow-based businesses to stock-based business focused on credit cards and fixed-term rental contract stores to forge longer-lasting relationships with customers
Past PresentOff-balance sheet assets
On-balance sheet assets
Consignment agreements
Off-balance sheet assets
On-balance sheet assets
Credit cards
Fixed-term rental contract stores
tsumiki SecuritiesRent guarantees
Improvem
ent of LTV
E-commerce E-commerce
Omni-channel retailing
Flow-based
Stock-based
Flow-based
Stock-based
Credit cards
111
・Enhancement of model combining stock-based business and off-balance sheet assets, pursuit of improved corporate value through management emphasizing lifetime value (LTV) and ROIC
Po l i c i e s fo r C o r p o rate Va l u e I m p ro v e m e n t ( G o i n g Fo r wa rd )
Past Future
Credit cards
Fixed-term rental contract stores
tsumiki SecuritiesRent guarantees
Credit cards(Liquidation of receivables)
E-commerce
Fixed-term rental contract storesE-commerce
Omni-channel retailing
New businesses
tsumiki Securities
Rent guarantees
Omni-channel retailing
Heightening of ROIC
Improvem
ent of LTV
Off-balancesheet assets
On-balancesheet assets
Stock-based
Flow-based
Off-balance sheet assets
On-balancesheet assets
Stock-based
Flow-based