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Owner of Japan's Largest Online Fashion Channel to Launch Mobile-Social Play

In response to market pressures, Start Today, which operates Japan's largest fashion e-commerce portal, Zozotown, is set to launch a major 'mobile first' social commerce app, called Wear. JapanConsuming reports.
  • JapanConsuming

TOKYO, Japan — In the last 2 months, Yusaku Maezawa, founder and president of Start Today, the operator of Zozotown, has been tweeting teasers for a new online venture called, creating a great deal of excitement among Japanese fashionistas. Start Today owns Japan's biggest dedicated fashion shopping portal and has an unrivalled loyalty among true fashion devotees.

Start Today formally announced the new service two weeks ago. Wear is a 'mobile first' social commerce concept aimed, at least in theory, at driving fashion lovers into stores. The service, which still hasn’t launched, will leverage Zozotown’s large database of nearly 5 million fashion consumers and massive collection of product code numbers from its merchant base, to create a fashion social network dedicated to discussion of fashion. Access to Wear will be through Zozotown IDs, automatically linking user content to the Zozotown shopping portal.

The idea is simple, a kind of mobile Facebook for fashion; app users can scan barcodes of fashion items they like while browsing in a store and the product image, details and price automatically display on-screen thanks to Zozo’s database of product and existing agreements with thousands of brands and stores. Users can comment on the product in their Wear journals to which friends can add their own comments too. All the scanned items are saved, creating a wish list which the user can browse later. Post-purchase, users can upload photos of themselves in their new outfits. It is also expected that Start Today will offer brands the opportunity to send push notifications to users who have saved an item from their brand, offering discounts and other promotions.

In theory, the service sounds a win-win for stores, brands and fashion loving consumers, but there is a caveat. Saved items may well be browsed through later and indeed help consumers remember clothes they have seen before, but having already checked out the item in a store, it is questionable how likely consumers will be to return rather than simply click through and buy on Zozotown. This will be nice for Start Today, but some retailers may baulk at the lost opportunity to sell through their own stores or e-commerce sites.

A promising new business is just what Start Today needs to appease demanding investors. The online portal posted solid results for financial year 2012, with transaction values of ¥95.8 billion (about $960 million at current exchange rates), up 19.5 percent, delivering sales of ¥35 billion, up 10 percent. However, this was less than forecast, and slower than the rapid growth rates of the last decade, resulting in some painful commentary from analysts. For the year ahead Start Today has released more conservative forecasts, with transaction values of ¥108 billion, up 13 percent and operating profit of ¥10 billion, up 21 percent.

Some new ideas for growth have been cancelled, worrying investors further, such as a Zozo catalogue operation which was pulled after one printing. And overseas, Start Today recently cancelled its tie-up with Ebay Korea, two years after signing a collaboration to promote Zozotown in the Korean market.

Other new marketing ideas may prove more enduring, however. It launched an exhibition called Zozo Collection last Autumn to display the latest collections from Zozo merchants. The first show only attracted around 10,000 visitors against a forecast 20,000, but Start Today plans to continue the event and increase its frequency to two to three times per year to raise awareness and increase traction.

A recent new venture, Zozo Used, is proving a success. Zozo Used has been created out of Crown Jewel, an auction site acquired by Start Today in 2011. It already has sales of ¥2 billion, and given the rapid growth in the acceptance of used clothing, could well turn into a major business for the online firm. While physical used clothing chains like DonDonDown on Wednesday are also expanding at a fair clip thanks to the growing mainstream acceptance of used fashion retailing, Start Today has a serious advantage in its large database of 5 million fashion fans — often with wardrobes full of hardly used fashion items that would sell well on the site. It says it is seeing many shoppers buying and selling used clothing for the first time through Zozo Used largely because of the trust in the Zozo brand. It is investing in new logistics capacity to handle used sales of ¥4 billion, and is targeting sales of ¥10 billion in the medium term.

As well as the new Wear social fashion network, Start Today is also working with merchants to make Zozo into a driver of O2O marketing to develop stronger ties between client retailers and its customers. Since March, Start Today has offered a platform for shop staff from merchant clients to model looks from ranges in their own stores, introducing new items and posting pictures of themselves in new outfits. This is similar to Urban Research’s shop staff blogging service The looks now feature on Zozo’s top page and are linked to existing product pages, marrying the benefits of a human stylist with high definition product photos and details. “Real” people putting together styles has a strong impact and shop staff like it too: 4,000 shop staff posted more than 10,000 pictures in the first month. As a result more customers are now accessing product pages from these look pages rather than, as before, sales rankings, helping to broaden sales across more merchandise.

Zozotown is at a point where it can expect somewhat slower growth from its core business simply because it is now a large, mature business. It faces serious competition from Amazon in particular, as well as Rakuten, but has a loyalty and brand value among dedicated fashion consumers that the general shopping portals don't currently have — although Amazon is working very hard on raising the profile of its fashion offering. In the mobile space, there are a host of small competitors but the largest could well be NTT Docomo if its new Magaseek business can help raise the fashion profile of its DShopping mobile commerce venture.

None of these issues can detract from Start Today’s achievement in carving out an online presence as one of the first sites consumers think of when they want to buy fashion. Above all its databases of 5 million plus fashion lovers are the crown jewels of the company. It is why the Zozo Used business makes so much sense — exploiting the value in this database to generate sales in a new market — and why the launch of a third potential pillar,, will be closely watched.

JapanConsuming is a leading provider of intelligence on Japanese retail and consumer markets.

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The State of Fashion: Technology