Risks associated with competitive entry, technological innovation, and changes in customer needs

「As more companies seek to bring operations in-house, there is a risk that more companies will use AI to conduct digital marketing internally, placing the revenue of the DX and marketing business under relatively greater pressure.」

「In the automotive sales market where the Group operates, many new entrants, including emerging companies and companies from other industries, are joining existing operators. The Group is responding quickly by differentiating itself from competitors and adapting to changes in consumer trends. However, if the Group cannot respond to intensified competition from new entrants, technological innovation or changes in customer needs, or if doing so requires substantial systems investment, personnel costs or other expenses, its business and performance may be affected.」

「In the marketing-related markets where the Group operates, technological innovation and customer needs are changing extremely rapidly, as illustrated by the rapid spread of generative AI. In particular, generative AI has lowered the barriers to article production, affecting demand for outsourcing, while the quality required of outsourcing providers is rising. We will therefore expand the solutions we can provide by leveraging the Group’s existing expertise and technologies.」

「Meanwhile, competition intensified as competitors expanded, causing the Media & Solutions Business to record lower revenue.」

「However, if the Company cannot respond to intensifying competition from new entrants, technological innovation or changes in customer needs, or if responding to such changes requires substantial expenses such as systems investment and personnel costs, its business and performance may be affected.」