Risk of Slower E-Commerce Market Growth Due to Domestic Economic Conditions and Consumer Spending Trends

「As consumers returned to brick-and-mortar stores following the easing of recent activity restrictions, the growth rate of brick-and-mortar stores exceeded that of e-commerce for the first time in several years.」

「On the other hand, global inflation accelerated due to surging raw-material prices and supply constraints resulting from the prolonged situation in Ukraine. Although monetary authorities in various countries implemented monetary tightening, prices continued to rise. In addition, the yen weakened substantially, primarily due to interest-rate differentials arising from differences in domestic and overseas monetary policies, and the outlook for Japan’s economy remained uncertain.」

「During the three-month period ended the first quarter, Japan’s economy showed signs of recovery as restrictions on economic and social activity associated with the COVID-19 pandemic were eased. On the other hand, inflation accelerated due to higher raw-material prices related to the situation in Ukraine and the weaker yen. As countries significantly shifted their monetary policies in response to this global inflation, disruption in the financial and foreign exchange markets continued, and the outlook remained uncertain.」

「An uncertain outlook continued due to factors including accelerating inflation caused by surging crude oil and other raw-material prices resulting from economic sanctions against Russia, led by the G7 countries, following Russia’s invasion of Ukraine in late February.」

「During the nine-month period ended the third quarter, Japan’s economy remained in an uncertain situation due to the spread of COVID-19, although signs of recovery emerged in various areas against the backdrop of a recovery in the global economy and progress in vaccinations. However, uncertainty in the near term increased with the recent rapid spread of the Omicron variant.」

「During the six-month period ended the second quarter, Japan’s economy remained in a difficult situation as the emergence of COVID-19 variants increased the number of new infections, leading to the issuance of states of emergency and priority preventive measures in some areas and restricting economic activity. On the other hand, expectations for the normalization of economic activity in Japan and overseas increased as the implementation of infection-control measures and vaccinations progressed and the number of new infections declined.」

「During the three-month period ended the first quarter, Japan’s economy remained in a difficult situation as the renewed spread of COVID-19 led to the reissuance of states of emergency in some regions and economic activity remained stagnant due to voluntary business closures, particularly in the food service industry. Although there were positive developments, including the expansion of vaccinations and the reopening of economic activity in Europe and the United States, the outlook remained uncertain.」

「Japan’s economy remained in a difficult situation during the fiscal year due to the impact of the spread of COVID-19, which had continued since the beginning of the fiscal year. In addition, the outlook remained uncertain due to the renewed spread of COVID-19, particularly in major metropolitan areas, during the fourth quarter and delays in the rollout of COVID-19 vaccinations in Japan.」

「During the nine-month period ended the third quarter, Japan’s economy remained in a difficult situation due to the so-called third wave of COVID-19, centered on renewed infections in major metropolitan areas. In addition, the overseas environment remained uncertain due to renewed infections, particularly in Europe and the United States.」

「During the six-month period ended the second quarter, Japan’s economy remained in a difficult situation due to the impact of COVID-19. In addition, concerns about a renewed global spread of infections could not be dispelled, and an uncertain outlook continued.」

「In the internet retailing sector surrounding our group, the rapid expansion in the merchandise segment of Japan’s domestic B2C e-commerce market paused last year, although the market continued to grow alongside a rising e-commerce penetration rate. Meanwhile, concerns about a decline in domestic consumption increased following the declaration of a state of emergency in April this year due to the spread of COVID-19 in Japan.」

「Although the domestic e-commerce market is expected to expand as described above, we recognize that it is a market in which business conditions are affected by the domestic economic environment, particularly the macroeconomic environment reflected in consumer spending trends. Accordingly, if the growth rate of the domestic e-commerce market slows or growth stagnates due to a deterioration in the domestic economic environment or other factors, this could affect our group’s financial results through a deterioration in the business conditions of the e-commerce operators that are our customers.」