Market expansion driven by dual-income households, children on waiting lists and free early childhood education and childcare

「According to the "Summary of Conditions Related to Childcare Facilities and Similar Services (1 April 2025)" published by the Children and Families Agency, the number of children on waiting lists was 2,254 as of 1 April 2025, a decrease of 313 from the previous year.」

「In the authorized childcare group within the domestic education area, there are currently no plans to open new facilities for the time being in view of the increasingly saturated market environment, although」

「According to the "Summary of Conditions Related to Childcare Facilities and Similar Services (1 April 2024)" published by the Children and Families Agency, the number of children on waiting lists was 2,567 as of 1 April 2024, a decrease of 113 from the previous year. Although the number is trending downward, national and local government efforts to eliminate waiting lists are expected to continue for the time being. At the same time, the declining birth rate is a fact, and failure to secure the expected number of enrolled children could affect the Group's operating performance.」

「In the childcare and early childhood education market in which the Group operates, the government approved the "Children's Future Strategy Policy" at a Cabinet meeting on 13 June 2023, positioning measures to address the declining birth rate as one of the major pillars of its policies. In addition, on 22 December 2023, the government approved the "Children's Charter" at a Cabinet meeting, setting out the goal of realizing a "child-centered society" in which all children and young people can lead happy lives, and incorporating seamless support tailored to each stage of life as a key priority.」

「In addition, in December 2023, the government approved the "Children's Charter" at a Cabinet meeting, setting out the goal of realizing a "child-centered society" in which all children and young people can lead happy lives, and incorporating seamless support tailored to each stage of life as a key priority.」

「The overall utilization rate for childcare facilities and similar services continued to rise, reaching 52.4%, up 1.5 percentage points from the previous year, while the number of children on waiting lists continued to decline, reaching 2,680. Children aged 1 and 2 accounted for 2,280, or 85.1%, of those on waiting lists.」

「In the childcare market in which the Group operates, the declining birth rate shows no sign of abating, with the number of births in 2022 falling to the 770,000 range. Against this backdrop, the government established the Children and Families Agency on 1 April 2023 to centralize measures addressing the declining birth rate and support for child-rearing previously handled by the Ministry of Health, Labour and Welfare, the Cabinet Office and other bodies. On 13 June 2023, it also announced the "Children's Future Strategy Policy." This includes measures to strengthen support for child-rearing, such as establishing the proposed "Universal Childcare System," which would allow flexible, hourly use of childcare facilities regardless of employment requirements, expanding child allowances and reducing the burden of education costs. In addition, as the government has promoted the development of childcare facilities, the number of children on waiting lists has been trending downward, reaching 2,944 as of April 2022.」

「In the childcare and early childhood education market in which the Group operates, the number of births fell below 800,000, the lowest level on record, and the declining birth rate is accelerating faster than the government forecast with no sign of abating.」

「Although the number of children on waiting lists for childcare facilities continues to decline, according to the Ministry of Health, Labour and Welfare, as of May 2022, 15,180 elementary school children from dual-income and other households were on waiting lists for after-school children's clubs, or after-school childcare. This was an increase of 1,764 from the same month of the previous year and the first increase in 3 years. By prefecture, Tokyo had the highest number, at 3,465.」

「In Tokyo, where many of the authorized childcare facilities operated by the Group are located, the number of children using childcare services as of April 2022 declined slightly from the previous year. However, against the backdrop of expanded childcare services and revisions to the childcare leave system, the rate of childcare service use among the preschool-age population rose by 2 percentage points year on year to 54.4%, while the rate of applications to use childcare facilities and similar services also increased by 1.9 percentage points to 53.8%. In addition, particularly among parents who expect childcare facilities to provide education, the market is shifting from an era of simply looking for a place to leave children to an era in which parents choose facilities based on the quality of childcare.」

「The Group believes that, as the balance between supply and demand in the childcare industry reverses and the industry becomes a competitive market, initiatives to operate “schools and centers chosen by users” will become increasingly important」

「In addition to the expansion of childcare capacity, the number of children using childcare facilities and similar services has remained flat, partly because users have refrained from using them due to COVID-19, while the number of children on waiting lists continues to trend downward. Meanwhile, education-related services for preschool children, particularly those sought by education-conscious parents, are supported by solid demand, and the market continues to expand.」

「In the childcare and early childhood education market in which the Group operates, the number of children using childcare facilities and similar services has been trending upward as the female employment rate improves. However, although childcare capacity is being expanded, some users have refrained from using these services due to concerns about COVID-19. In addition, municipalities with higher population growth rates tend to have more children on waiting lists, while municipalities experiencing population declines are facing difficulties operating childcare facilities because they are unable to fill their capacity.」

「The trend of users refraining from placing their children in childcare due to concerns about the impact of COVID-19 is beginning to subside, and solid demand continues. Meanwhile, the number of children on waiting lists continues to decline as capacity expands.」

「The environment surrounding the childcare and early childhood education market in which the Group operates is also changing, including a seemingly temporary decline in births due to concerns about COVID-19 and changes in working styles and lifestyles resulting from infection-prevention measures.」

「Demand for new authorized childcare facilities has become limited to certain regions, including the Tokyo metropolitan area, the Group's primary operating region.」

「The number of childcare facilities has increased as a result of these government initiatives, and overall demand for childcare facilities is expected to moderate going forward. However, in urban areas, demand for childcare continues to increase due to population inflows and other factors, so demand for new facilities is expected to continue for the time being, depending on the region.」

「The number of childcare facilities has increased as a result of these government initiatives, and overall demand for childcare facilities is expected to moderate going forward. However, in urban areas, demand for childcare continues to increase due to population inflows and other factors, so demand for new facilities is expected to continue for the time being, depending on the region.」

「Demand for childcare has increased against the backdrop of women's growing participation in the workforce, while the issue of children on childcare waiting lists remains serious.」