GENERATION PASS CO.,LTD (3195) Stock Price

Generation Pass is a company whose core business is "EC Marketing," which involves selling products online. Using its proprietary marketing method called "EPO (EC Platform Optimization)," the company operates 87 stores centered on "Recomen-do" across multiple EC malls including Rakuten Ichiba and Amazon. It handles 2.49 million products across diverse categories ranging from furniture to beauty cosmetics, primarily operating on a drop-shipping model without holding inventory.

The company's customers are mainly manufacturers and wholesalers, with which it has established business relationships with 1,013 companies. Its revenue structure works by analyzing data to sell products proposed by these companies under optimal conditions and earning commissions based on sales. In its support business, which assists other companies with EC operations, the company adopts a performance-based business model, generating revenue only when products are actually sold.

The business consists of three segments. The core EC Marketing segment includes marketing operations that comprehensively handle big data collection and analysis through product sales, as well as a support business that assists other companies with EC operations. The Product Planning segment leverages data accumulated through EC to conduct joint product development with manufacturers and production management through direct partnerships with overseas factories. Other operations include custom software development and media business, with the entire group operating as a nine-company structure.

Generation Pass operates under the management philosophy of "bridging people across generations." The company is pursuing a growth strategy centered on EC (e-commerce) marketing, with key targets of expanding revenue and securing stable profits. It is focusing on increasing merchandise transaction volume while continuing investments with a medium to long-term growth perspective. In particular, the company aims to achieve profit growth by strengthening its EC support business, which assists other companies, and its media business.

In priority investment areas, the company is enhancing web production capabilities through its subsidiary Cannart. Founded in 2005, this subsidiary has strong expertise in web marketing within the EC sector and has built a system that handles everything from EC system development to production and operation. Through in-house operations and business partnerships, the company is deploying a differentiation strategy that realizes large-scale EC site construction and operation while preventing the outflow of EC marketing know-how. Additionally, the company's proprietary brand "S!mplus" home appliance series surpassed 3 million cumulative units shipped in February 2024, steadily enhancing corporate brand value.

For new market development, the company is advancing cross-border EC business using Qingdao Xinzhu Textile Trade Co., Ltd. in China as an operational base. This base supplies high-quality raw materials and high-value-added products to countries worldwide, while also providing competitively priced original merchandise to the company's domestic EC marketing operations. In product planning-related business, the company plans to accelerate product proposals and new customer acquisition by leveraging big data accumulated through EC marketing operations, thereby expanding revenue and profits.

Regarding technological innovation, the company is actively investing in productivity improvements centered on AI utilization. It is expanding system personnel to approximately 20% of its workforce and maintaining a continuous average employee salary increase rate of 5% or more to secure and develop talented personnel. In product planning-related business, the company is advancing proprietary high-function fiber development, obtaining numerous patents, and promoting joint development with specialty and general trading companies to build technological competitive advantage.