How can MARUI GROUP

With eyes to 2050, MARUI GROUP has defined three businesses founded on co-creation as thehelp transcend dichotomies?

­instruments for realizing its vision of “harnessing the power of business to build a world that­transcends ­dichotomies.” These three businesses capitalize on MARUI GROUP’s core value—
the co-creation of creditability—as well as on the strengths and platforms cultivated through existingThree Businesses Founded on
Co-Creation for Generating Happinessbusinesses. Furthermore, the businesses overlap with one another, as opposed to being completely
isolated. By expanding the intersection between these three businesses and thereby generating­happiness for all people, including future generations, MARUI GROUP’s 2050 Vision can be realized.

Inter-Generational BusinessesInter-Generational Businesses
Provision of options for coexistence withthe global environment and future generations

In the world of 2050, we expect only those businesses that coexist with the global­environment will be able to survive. Moreover, forging a sustainable future in harmony
with the global environment for future generations will require us to cultivate theyounger generations that will shape society 30 years from now, growing them into
leaders that can guide society. Recognizing this fact, MARUI GROUP has subdivided
its inter-generational businesses into green businesses and human businesses,
through which it will provide options for coexistence with the global environment
and future generations.

See pages 16–23

Co-Creative Businesses


Co-Creative Businesses

Financial Inclusion

Provision of options emphasizing balance
between individuality and connections

Provision of options foralleviating income disparity

The rapid expansion of virtual space and the backlash against raw individualism
will likely make the world of 2050 a world that emphasizes individuality while alsofinding value in connections that transcend the boundaries of country and race.
MARUI GROUP functions as a platform to society, enabling it to provide spaces
and services emphasizing balance between individuality and connections through­co-creation with all the stakeholders that touch its value chain.

See pages 24–27

Financial Inclusion
Happiness

We predict that a massive global market catering to low- and middle-income individ­
uals will appear in the world of 2050. MARUI GROUP intends to extend its financial­inclusion initiatives, which involve supplying financial services for everyone, beyond
their current home in the domestic market into overseas markets. Through this undertaking, we aim to provide options for alleviating income disparity and other concerns
regarding money felt by people around the world.

See pages 28–31

By expanding the intersection between these three businesses and thereby generating happinessfor all people, MARUI GROUP’s 2050 Vision can be realized.

14

VISION BOOK 2050

VISION BOOK 2050

15

Inter-Generational Businesses

Provision of options for coexistence with the global environment and future generations

Inter-Generational Businesses
MARUI GROUP is developing inter-generational businesses that cater to the interests of both current and future
generations. We recognized that building a sustainable society and global environment through business requires
co-creation with the stakeholders that are future generations. When looking at environmental issues, one can avoid
taking action if they only think of current generations. However, if one considers children and future generations,
it is clear that immediate action is required. MARUI GROUP views this action as an ethical responsibility.

Options for Coexistence with the Global Environment
MARUI GROUP defines inter-generational green businesses as businesses that provide sustainable options forcoexistence with the global environment which transcend
the current and future generations. Activities and investments for reducing environmental impacts can place
down­ward pressure on short-term earnings in the form ofcosts. However, if we avoid these actions, we will burden
future generations with the disadvantages of environmental issues. Adopting renewable energy, for example,
requires short-term costs to make the necessary initial­investments. Viewed from a long-term perspective,

however, these investments will create sustainable value
for future generations. Initiatives for reducing CO2 emissions, meanwhile, are themselves sources of innovation
for creating new green businesses and thus have the­potential to increase long-term earnings. In recognitionof this fact, MARUI GROUP has set key performance­indicators (KPIs) for its long-term targets that are linked
to activities for reducing environmental impacts and toearnings. By managing these KPIs, we will advance environmental issues as a business.

EnergyReduction ofenvironmental impacts

MARUI GROUP’s

Environmental=
efficiency

MARUI GROUP promises to develop businesses by 2050
that increase the interests of both current and future generations.

Operating income

e.g., scope 1, 2, and 3 applicable usage of electricity, gas, etc.

Waste

CO2 emissions
e.g., waste from the Company and tenants (food,plastic, paper, etc.)

Green businesses
Reducee.g., reduction in Company resource usage (sizes
matched to customers, sharing economies,
stores that do not sell, etc.)

Circular economies

Options for coexistence with the global environment (green businesses)
Options for coexistence with future generations (human businesses)

Ratio of circular=revenue

Circular sales /Transactions
Total Retailingsegment transactions

Reusee.g., apparel trade-in and resale

Recyclee.g., recycling by tenants (apparel, meals, etc.)

People dreaming of a sustainable society and global environmentLong-Term Targets

All members of current and future generations
Medium-Term Targets(5 years in the future)
Environmental efficiency 10.2
• 20% reduction in greenhousegas emissions*• 70% of electricity sourced fromrenewable energy• 60% rate of resource recycling

Long-Term Targets(10 years in the future)

Ultralong-Term Targets(30 years in the future)

Environmental efficiency 15 or more

Environmental efficiency 20 or more•4
 0% reduction in greenhousegas emissions•1
 00% of electricity sourced fromrenewable energy•7 0% rate of resource recycling•8 0% reduction in greenhousegas emissions

Ratio of circular revenue 30% or more Ratio of circular revenue 40% or more•1
 00% rate of resource recycling
Ratio of circular revenue 50% or more* Approximately 99% of greenhouse gas emissions from MARUI GROUP were in the form of CO2 emissions in the fiscal year ended March 31, 2018.

16

VISION BOOK 2050

VISION BOOK 2050

17

Provision of options for coexistence with the global environment and future generations

Inter-Generational Businesses

Overview of CO2 Emissions and Priority Issues

Decision to Change Source of Electricity

Utilizing defined standards for calculating CO2 and other greenhouse gas emissions, MARUI GROUP has been calculating emissions based on Scope 1 andScope 2 (emissions from MARUI GROUP) and Scope 3 (emissions from thevalue chain outside of MARUI GROUP) since the fiscal year ended March 31,
2014. Third-party verification has been received for these emissions calculations
since the fiscal year ended March 31, 2017.
Emissions applicable under Scope 1 and Scope 2 are CO2 emitted fromMARUI GROUP itself while emissions applicable under Scope 3 represent CO2
emitted throughout the Company’s value chain. The Company has realized­reductions in total CO2 emissions across the value chain for five consecutive
years. Seeking to prioritize the reduction of its own CO2 emissions (Scope 1
and 2), MARUI GROUP has established clear reduction targets based on scientific rationale, which were certified by the Science Based Targets initiative.
We are making steady progress toward lowering environmental impacts basedon our long-term targets.

Roughly 80% of MARUI GROUP’s CO2 emissions (Scope 1 and 2) are attributable to electricity use. To lower these emissions, we have proceeded to implement electricity conservation activities, including the introduction ofelectricity-saving equipment at Marui and Modi stores and offices and the
reduction of overtime through work style reforms.
At the same time, it can be expected that electricity use will increase as
business model reforms result in the installation of additional kitchens andrefrigerators in stores to accommodate increased food vendors and as distribution centers are operated 24 hours a day through the AutoStore robotic
warehouse system to accommodate the trend toward e-commerce. MARUIGROUP has thus chosen to pivot away from reducing electricity use tochanging the source of its electricity to renewable energy, setting the targets ofsourcing 70% of its electricity from renewable energy by 2025 and sourcing
100% by 2030.

In 2018, MARUI GROUP became the firstJapanese retailing company to be included in
the Climate A-List, signifying that it engages insuperior climate change response initiatives.
Approximately 7,000 companies from acrossthe globe were investigated during the process ofcompiling the 2018 Climate A-List, and a total of
126 companies were selected.

Evolution from Reducing Environmental Impacts to Providing Options
for Coexistence with the Global Environment

MARUI GROUP’s CO2 Emissions across the Value Chain
660,000 t-CO2

FY2014640,000 t-CO2

FY2015FY2016610,000 t-CO2

FY2017600,000 t-CO2
520,000 t-CO2

FY2018In July 2018, MARUI GROUP became a memberof the international initiative RE100 to more effectively pursue its target of sourcing 100% of its
electricity from renewable energy by 2030.

(Down 13% year on year)

Scope 3 410,000 t-CO2 78.9%
Emissions from raw material procurement, transportation,and products purchased by customers
Scope 2 100,000 t-CO2 19.2%
Emissions from operation of MARUI GROUP’s stores and offices
Scope 1 10,000 t-CO2 1.9%
Emissions from transportation by MARUI GROUP’s vehicles

In the fiscal year ended March 31, 2018, MARUIGROUP established the targets of achieving a 40%
reduction in Groupwide total greenhouse gas
emissions attributable to Scope 1 and Scope 2
from the level in the fiscal year ended March 31,
2017, by the fiscal year ending March 31, 2031,
and a 35% reduction in Scope 3 emissions overthe same period. In addition, we have set a longterm target of pursuing an 80% reduction in the
combined volume of Scope 1 and Scope 2 emissions from the level in the fiscal year ended March
31, 2017, by the fiscal year ending March 31,
2051. These targets have been certified by
Science Based Targets.

Minna Denryoku Co., Ltd.

MARUI GROUP’s CO2 emissions reduction activities go beyond simply
lowering environmental impacts to function as green businesses that provide
options for coexistence with the global environment through co-creation withcustomers, business partners, and investors.
For example, MARUI GROUP procured ¥10.0 billion through its issuanceof the first green bonds to be offered by a Japanese retailer in October 2018
to further it toward its goal of sourcing 100% of its electricity from renewablesources.* The seven domestic institutions that expressed intent to invest inthese bonds praised them as “options for ESG investment.”
Furthermore, MARUI GROUP is examining the possibility of providing
EPOS cardholders with electricity generated from renewable sources throughco-creation with Minna Denryoku Co., Ltd. Moreover, by encouraging customers to pay their monthly electricity bills with their EPOS card, we provide sustainable options while developing MARUI GROUP’s business.

MARUI GROUP helped establish a framework for astable and prioritized supply of renewable energy
through a business and capital alliance with Minna
Denryoku, the first company in Japan to realize
power supply traceability.

MARUI GROUP was the first Japanese retailer
to declare its endorsement of the Task Force on­Climate-related Financial Disclosures. The Company
plans to begin disclosing information pertaining toclimate-related risks, opportunities, and financial
impacts in March 2019.

* MARUI GROUP has received a second opinion regarding the eligibility of its initiatives for green bonds in theform of a third-party evaluation from ESG evaluation company Sustainalytics. This evaluation verified that theCompany’s initiatives were highly reliable, contributed to meaningful improvements, and conformed to thefour conditions of the 2018 Green Bond Principles.

Message from a Green Business Representative

Transcending of the Dichotomy between the Interests of Current Generations and Future Generations

Hirotsugu Kato
Director andSenior Executive Officer
Chief Digital Officer,
General Manager, IR Department
In charge of Corporate Planningand ESG Promotion
MARUI GROUP CO., LTD.

18

MARUI GROUP engages with all of its stakeholders while practicing co-creation management to expand the intersection between the interests of different stakeholders. We recently added future generations to the groups of stakeholders that we consider. This move clarifies our intent to focus on the interests of not just current generations but
also future generations or, in other words, to conduct management with an eye toward increasing lifetime value. This
move is thus crucial to upgrading our co-creation management approach to co-creation sustainability management.
Moreover, the perspective this move brings is vital to green businesses. In 2016, we were basing energy procurement
decisions purely on price, which led to ESG-minded investors pointing out that our CO2 emissions had increased.
This decision may have seemed rational when only considering the interests of current generations. However, it likely
came at the expense of the interests of future generations and thus risked saddling them with environmental issues
and other substantial burdens. It was for this reason that the KPIs for green businesses were set to transcend the­dichotomy between the interests of current generations and future generations and to increase lifetime value without
becoming overly preoccupied with the interests of either party. I am confident that achieving the targets for these
KPIs will effectively enhance our co-creation sustainability management.

VISION BOOK 2050

Breakdown of MARUI GROUP’s CO2 Emissions(Scope 1 & 2)

Roadmap to Accomplishing 100% Renewable Energy Goal
Total electricity use

200 GWh

Other

Gas
10%

Approx.
11,000 tons

Fiscal year ended
March 31, 2018

113,104 t-CO2

6%
Approx.
5,000 tons
Electricity
84%

Approx.
95,000 tons

170 GWh

Ratio ofrenewableenergy0%

1%

FY2017(0 stores)

FY2019(1 store)50%■ Non-renewable energy

VISION BOOK 2050

FY2021(13 stores)

70%

FY2026(18 stores)

100%

FY2031(All stores)■ Renewable energy

19

Provision of options for coexistence with the global environment and future generations

Inter-Generational Businesses

Circular Economy for Transcending Dichotomy between Apparel
Supply and Demand

Options for Coexistence with Future Generations

In Japan, approximately 1 million tons of apparel items are thrown away eachyear, and less than 30% of apparel items are reused or recycled.* MARUIGROUP’s efforts to address this social issue started in 2010 when it began
accepting trade-ins of clothing and shoes that customers no longer needed
and reusing these items. We later expanded our efforts to reduce waste by­developing products that were matched to customer needs.
Today, however, the apparel supply and demand gap is widening (see graphbelow). The nearly 1.5 billion apparel items produced in excess of consumer
demand are not purchased and are therefore disposed of as waste. If this serious
social issue is left unchecked, the social costs of these wasted resources will
become the burden of future generations. MARUI GROUP seeks to over­come
this issue by creating sharing and other new businesses and promoting acircular economy model to turn wasted resources into profits.

Rakuchin Kirei series shoes are designed throughplanning meetings with customers to realize levelsof comfort that guarantee shoes are not thrownaway due to discomfort stemming from mismatched sizes. We are expanding our lineup ofthese shoes to cover 100% of foot sizes with thegoal of providing shoes matched to the unique
physical characteristics of each customer.

One of MARUI GROUP’s missions is to increase the happiness of all people, including those of future generations.
Our vision for 2050 and the long-term targets for thethree businesses were established to guide us in fulfilling
this mission. However, the accomplishment of this visionand targets will require us to enhance our corporate
culture in order to foster human resources with a capacity
for empathy, which is the ability to share one’s beliefs andunderstand others, and a propensity for innovation,
which is a drive for autonomous action. It is stated in
MARUI GROUP’s philosophy that we should “equate thedevelopment of our people with the development of ourcompany.” Accordingly, we see a company as being aplatform for supporting the growth of its people. Companies are thus only able to grow when they effectively
operate this platform. MARUI GROUP’s long-term targets
provide a wide range of options for coexistence with
future generations through co-creation with external
entities, which will be conducted alongside humanresource investment and the cultivation of a corporate
culture that fosters a propensity for innovation foundedon co-creation.

* Source: Organization for Small & Medium Enterprises and Regional Innovation

Corporate culture

Shift from Ownership to Use Offering Environmental ValueMARUI GROUP has expanded the scope of its ongoing reduction initiatives
to incorporate the concept of a shift from ownership to use advocated by thecircular economy model. This decision was the impetus for our creation of
sharing businesses that handle articles such as clothing, bags, and watches
and our reorientation toward experience-providing stores that do not sell.
We see sharing-oriented circular economies as having the potential to offer
environmental value. Taking a dress that a person will only wear once as an
example, rather than that person owning the dress, it would be better for
MARUI GROUP to own the dress instead and rent it to multiple customers sothat they can use it when needed. This situation would create environmental
value by reducing the number of new dresses produced. Moreover, service
value would also increase as customers have the joy of choosing from a wider
selection of products because they will only use them once. By providing­customers with options for coexistence with the global environment thatare enjoyable and waste free, we aim to increase the volume of transactions
associated with circular economies.

Apparel Supply and Demand Gap

30.000000

2,798

23.333333
16.666667

1,196
10.000000
1,154
1990

DRENi is a directly operated dress rental shop.
This new store offers rentals of dresses for which
opportunities to wear are limited, thus creating
leeway in customers’ finances and closets andenabling customers to try out designs and colors
that they would be hesitant to purchase, making
for a new business that is friendly to the environment and to customers’ wallets.

Sale

Rental

3.5t-CO2

0.5t-CO2

1,343

85% reduction in emissions per transaction
Buyers/Users

1,000

1,000

Dresses produced

2,000

333

2017

Source: MARUI GROUP CO., LTD.

VISION BOOK 2050

External (society)e.g., financial literacy and sustainability education

Long-Term Targets
Medium-Term Targets(5 years in the future)

Long-Term Targets(10 years in the future)

Ultralong-Term Targets(30 years in the future)• Annual human resource investments of ¥1 billion or more (continued over the long term)

Consumed
million items

e.g., future leader development program,secondment to start-up companies

Human businesses

million items

Source: Kojima Fashion Marketing Co., Ltd.
www.fcn.co.jp/ (Japanese only)
Numbers of items supplied are calculated by adding imported anddomestically produced items (excluding undergarments). Numbers of
items consumed are estimated based on the average numbers of annual
purchases per household and the total numbers of households describedin household surveys by the Ministry of Internal Affairs andCommunications.

20

Human resource investment

Environmental Impact of One Dress Sold/Rented
Suppliede.g., voluntary participation,
new business creation

Internal• Voluntary participation by 10,000 employees or more each year (continued over the long term)• Aggregate total of 120 or more
future MARUI GROUP
leaders cultivated• Aggregate total of 4,000 or more­individuals capable of creating
future value cultivated•F inancial and sustainability education for future generations in Japan(continued over the long term)

VISION BOOK 2050

• Aggregate total of 10,000 or more­individuals capable of creating future
value cultivated• Financial and sustainability education for
future generations overseas

21

Provision of options for coexistence with the global environment and future generations

Inter-Generational Businesses

Ongoing Human Resource Investments for Realizing 2050 Vision
Human resource investments are recorded as expenses for accounting
purposes, causing short-term declines in profit. However, ongoing humanresource investments are essential to carrying out our philosophy: “equate
the development of our people with the development of our company.” More
importantly, MARUI GROUP emphasizes the importance of human resource
investments to accumulate the intangible assets that are a wellspring of future
corporate value. This belief has prompted us to disclose and track humanresource investment amounts and trends since the fiscal year ended March
31, 2017. The Company plans to conduct human resource investments inthe fiscal year ending March 31, 2019, for cultivating human resources for the
future totaling ¥1,030 million, a year-on-year increase of over 40%. Furthermore, we intend to conduct approximately ¥1,000 million worth of humanresource investments each year going forward to ensure the accomplishmentof MARUI GROUP’s 2050 Vision.

Declaration of Support for UN Standards of Conduct for Businessfor Tackling Discrimination of LGBTI IndividualsGroupwide project teams serve as forums for­in-depth, forward-looking discussion on themesthat will affect the Company or society from a­medium-to-long-term perspective.

Cultivation of Corporate Culture for Fostering a Propensity for Innovation
MARUI GROUP began building frameworks for encouraging employees togrow through voluntary participation in the fiscal year ended March 31, 2017.
New business fields require completely different success models. Accordingly,
we are advancing an organization-wide push to foster a propensity for innovation that drives employees to autonomous thought and action, seeing everything as relevant to themselves, founded on the capacity for empathy that wehave aspired to since our founding.
Initiatives to this end have included Groupwide project teams for broadening employees’ perspectives and dispatches to business schools as well as­secondment to start-up companies creating new businesses, work-experience
programs in Africa through ultralong-term research associations, assistancefor future planning via financial seminars, and the establishment of Singularity
University and other research organizations. Furthermore, the Co-Creation
Management Academy was established as a future leader development program
to address one of the issues identified when evaluating the effectiveness of
the Board of Directors. Through this program, each year 20 candidates are
selected to participate in a yearlong curriculum during which they learn
about management. In the fiscal year ending March 31, 2019, the third­iteration of this program was enhanced with a view toward participants
becoming managers of MARUI GROUP as well as improved post-completionskill improvement support and revised evaluation systems.

Human Resource Investments for the Future

Nearly2.2 times higher

FY2018FY2019(Target)MARUI GROUP provides financial education that emphasizes coexistence with
future generations. Financial literacy in Japan is lower than in other countries.
MARUI GROUP seeks to address this issue with Money Seminars and other­financial education programs designed to provide opportunities to think about
asset building conducted through tsumiki Securities Co., Ltd., a securities
company that started service in August 2018. Looking ahead, we hope to supply
a wide range of options by offering financial literacy education overseas as well.
MARUI GROUP also publishes messages in the LGBT section of the children’s newspaper published by The Mainichi Newspapers Co., Ltd., for elementary school students. The goal of these messages is to raise awarenessregarding LGBT individuals. In addition, we team up with the NPO ReBit toconstruct educational materials designed to bestow basic knowledge on LGBT
individuals to elementary school students.

FY2018Training-related
personnel expenses¥250 million

External training /education fees
¥180 million

FY2020~VISION BOOK 2050

MARUI GROUP is formulating plans to provide­financial education to elementary school students
as part of its sustainability education for future
generations. By teaching students about the advantages and disadvantages of money and theoptions for using, saving, and increasing theirmoney, we hope to alleviate concerns for the future
pertaining to money and improve financial literacy
among future generations.

Message from a Human Business Representative

Refinement of Propensity for Innovation by Increasing Knowledge and Expanding Perspectives
through Learning Opportunities

Training center
expenses¥80 million

22

MARUI GROUP’s future leader development
program allows participants to learn about management perspectives through a yearlong curriculum established under the supervision of outsideorganizations and external directors.

¥730 million¥480 million

FY2017The Medium-Term Management Visionary Committee is a venue for brisk discussion about important themes ­pertaining to future management.

Recruitment and otherhuman resource development expenses¥220 million¥730 million

MARUI GROUP has been awarded the highest
rating of gold in the PRIDE INDEX for two consecutive years from work with Pride, an organizationthat seeks to create comfortable workplaces forLGBT individuals and other sexual minorities
through initiatives that go beyond the boundaries
of companies.

Financial and Sustainability Education for Future Generations

Breakdown of Human Resource Investments

Approximately ¥1,000 million
each year over the long term
¥1,030 million

Eliminating discrimination of LGBT individuals is imperative to expanding therange of options for connections with others and for coexistence with future
generations. In December 2018, MARUI GROUP declared its support for theStandards of Conduct for Business for tackling discrimination against LGBTI
individuals, becoming the first Japanese retailer to do so. Furthermore, thestatement that individuals are not to suffer discrimination on the basis ofsexual identity or sexual orientation is included in the Company’s labor agreements and the MARUI GROUP Human Rights Policy states that “we stand in
opposition of all discrimination, whether on the basis of race, nationality,
religion, ideology, biological sex, age, physical characteristic, gender identity,
or sexual orientation, and exercise respect for the personalities and individuality of all people.” In addition, the scope of application of human resource
systems pertaining to spouses was expanded in April 2018 to include not only
spouses from legal marriages but also spouses from common-law marriages
and same-sex partners. In conjunction with this change, the word “spouse”
was replaced with “partner” in these systems.

Tomoo Ishii
Director and Senior Managing­Executive Officer
Chief Security Officer
and Chief Health Officer
In charge of Audit, General Affairs,
Personnel, and Health Promotion
MARUI GROUP CO., LTD.

One of the dichotomies to be faced in the future is that of people versus AI. This dichotomy is rooted in the fear ofpeople being replaced by AI. However, there are opportunities to be gleaned from this dichotomy if one takes apositive outlook, believing in their own skills and potential, rather than such a negative one. Part of our philosophy
is to “equate the development of our people with the development of our company.” The driving force behind suchdevelopment is voluntary learning. It is for this reason that frameworks for voluntary participation have been incorporated into our human resource systems, project team activities, and all other aspects of our organization inorder to cultivate a corporate culture encouraging a strong appetite for growth. I feel that an important mission ofmine is to help refine our propensity for innovation by increasing the knowledge and expanding the perspectivesof employees through learning opportunities while fostering altruistic human resources. I therefore hope to accelerate our growth initiatives to ensure that MARUI GROUP is always a company that benefits society.

VISION BOOK 2050

23

Co-Creative Businesses

Provision of options emphasizing balance between individuality and connections

Co-Creative Businesses
MARUI GROUP’s co-creative businesses are geared toward transcending dichotomies that cause division,
such as those separating senior citizens, LGBT individuals, and non-Japanese individuals from others; those
dividing races; the dichotomy between current and future generations; and that between short-term profitsand environmental destruction. Our goal in these businesses is to include previously excluded people throughproducts and services as well as through co-creation to contribute to the interests of all parties. By exercising
its core value—the co-creation of creditability—MARUI GROUP will provide options emphasizing balance
between individuality and connections through its co-creative businesses.

Options Emphasizing Balance between Individuality and Connections

Co-creative businesses provide options for members ofmature societies that emphasize individuality while also
valuing connections. In these businesses, a capacity for
empathy—the ability of employees to adopt the viewpoints of various stakeholders to understand theirthinking and their pain—is of utmost importance. MARUIGROUP seeks to expand the intersection between the interests (happiness) of six groups of stakeholders, including future generations, and co-creation activities withstakeholders are a vital part of this process. Among thelong-term targets defined below are those pertaining toco-creation activities that contribute to improved corporate value. These targets are emblematic of our commitment to expanding options as part of MARUI GROUP’s
daily co-creation activities, embodiments of the credit
philosophy that “creditability should be built together
with customers,” as options for stakeholders.

Co-creation with customers

MARUI GROUP’s

e.g., store development, product development,
customer services

Open innovatione.g., business partners, start-up companies

Co-creation with communities
and societye.g., community and regional development

Co-creation with investorse.g., management emphasizing capital costs

Co-creative businesses

MARUI GROUP promises to step up co-creation andopen innovation activities to provide services emphasizing
connections between people by 2050.

Spaces and services that foster connections between
all stakeholders as a platform for society

People valuing individuality
People valuing connections

Long-Term Targets
Medium-Term Targets(5 years in the future)

Ultralong-Term Targets(30 years in the future)

Long-Term Targets(10 years in the future)• Co-creation with aggregate total of
100,000 or more customers*• Co-creation with aggregate total of
500,000 or more customers*• Co-creation with aggregate total of
1,000,000 or more customers*•O pen innovation with 100 or morecompanies• Open innovation with 500 or morecompanies• Open innovation with 1,000 or morecompanies• Engagement with 50 or morecommunities• Engagement with 100 or morecommunities•E ngagement with 200 or morecommunities• 50 or more cases of engagement
leading to increased corporate value•1 00 or more cases of engagement
leading to increased corporate value•3 00 or more cases of engagement
leading to increased corporate value* The number of customers that take part in MARUI GROUP’s business process through planning meetings or other venues

24

VISION BOOK 2050

25

Provision of options emphasizing balance between individuality and connections

Co-Creative Businesses

Origin of Inclusion—Co-Creation with Customers

Co-Creation with Start-up Companies through Open Innovation

The origin of co-creation can be found in the act of valuing both individuality
and connections with others, a sentiment that has been part of MARUI GROUP’s
operations since its founding. Regardless, there was a chapter of our history
during which we were too bound by past successes and too focused on theperspectives and thinking of industry and of the Company itself. To overcome
this management crisis, we chose to return to the point of origin of co-creation.
Forming the new philosophy of “continue evolving to better aid our customers,” we completely revamped our prior, Company-centric store development,
product creation, and credit card operation practices. This undertaking gave
rise to planning meetings with customers, which are forums for incorporating
customers into all business processes and practicing co-creation with them.
Rakuchin Kirei series shoes and EPOS cards were both products of thisco-creation.
A prominent example of co-creation with customers can be seen at Hakata
Marui, which was opened in 2016. Prior to opening this store, we held morethan 600 planning meetings with customers, involving an aggregate total ofover 15,000 people in the process. Input from customers led to a store development process that overturned prior conventions through innovations suchas the introduction of food vendors on entry levels. The view of co-creation
born out of collaboration with customers is the origin of MARUI GROUP’s­co-creative businesses.

Valuing both individuality and connections with others requires expertise
related to IT, AI, and other cutting-edge technologies, areas in which start-up
companies excel. MARUI GROUP seconds its employees to such start-up
companies to nurture perspectives that may lead to the creation of new,­forward-looking businesses and to have them experience various opportunities to make decisions at their own discretion. Employees that have had thisexperience will help us combine different expertise to develop unprecedented
co-creative businesses.
Co-creation evolved to incorporate tenants at
Marui Family Mizonokuchi. At this store, tenants
are provided with explanations on MARUI GROUP’s
approach to co-creation and the goals of Marui
Family Mizonokuchi when it is first decided thatthey will join the store. Moreover, tenants areinvited to planning meetings with customers totake part in discussions so that they can reflect
the needs of customers in their merchandising,
services, and sales floor development.

Co-Creation with Communities and Society
Co-creation with communities and society is made possible by infusing
co‑creation with customers with the perspective of inclusion. We have therefore been participating in RAINBOW PRIDE LGBT pride events, promoting
regional development through collaborative events between popular anime
works and local shopping districts, and engaging in other such activities.
­Furthermore, the AI and IT technologies developed through EPOS card operations have been used to produce the EPOS Pay QR code payment service.
With this service, we are enhancing co-creative businesses that link customer
convenience to community prosperity by expanding the range of stores atwhich this cashless payment service can be used.

As part of its collaboration with BASE, Inc.,
operator of the BASE smartphone shopping application, MARUI GROUP helped open SHIBUYA BASE,
this company’s first full-time physical venue, in
Shibuya Marui. Leveraging MARUI GROUP’s
physical spaces for connecting with customers
and its sales floor operation and sales know-how,
SHIBUYA BASE provides a venue for customers
to discover new brands and products offering
fresh value.

Co-Creation with Long-Term Investors
Evolution of Co-Creation Store Development Approach
MARUI GROUP reframed the expertise and capacity for empathy it cultivatedat the sites of co-creation pertaining to store development, product creation,and customer service from the perspectives of its wide-ranging stakeholders,
including senior citizens, LGBT individuals, and non-Japanese. This reframing
expanded our focus from the happiness of customers to the happiness ofall stakeholders. We then incorporated social issues into our conventional­co-creation activities from the perspective of inclusion, making it possible
to broaden the reach of our main business. Increases in co-creation with­customers effectively enable us to include previously excluded individuals,
thereby expanding the interests (happiness) of stakeholders.
Meanwhile, the transition to shopping centers and fixed-term rental contracts transformed MARUI GROUP’s stores into real estate-model businesses
that rent space, which is expected to make co-creation with tenants even moresignificant than co-creation with customers.

Rakuchin Kirei series shoes are developed toprovide a perfect fit based on input from customers that have felt discomfort with shoes or are
unable to find the perfect size. With a focus on thebalance between comfort, design, and affordability,
we offer sizes ranging from 19.5 cm to 27.0 cm,
covering 100% of foot sizes, all developed basedon customer input.

VISION BOOK 2050

The EPOS Pay QR code payment service was introduced following the conclusion of affiliate agreements with shopping districts and restaurants
surrounding Nakano Marui, expanding the range ofstores at which small-sum payments can be made,many of which did not p­ reviously accept EPOS cards.
By creating regional economic spheres centered on
customers, we aim to develop communities that linkregions and customers.

Message from a Co-Creative Business Representative

New Value Created by Generating Happiness through Co-Creative Businesses

Discussions were held with customers for the
purpose of promoting usage among EPOS Gold
cardholders, during which many wondered why we
did not offer a family card. This was the inspiration
for the EPOS Family Gold card, a card forgedthrough repeated hypothesizing and verification
via co-creation with customers to offer a uniqueservice that values both individual independence
and family bonds.

26

Expanding the happiness of stakeholders requires the endorsement of longterm investors. ESG investment and other approaches toward investing in­sustainability are investments in sustainability and thereby provide the option
to move away from focusing on short-term profit to pursue sustainable growthover the medium-to-long term. Given the emphasis currently being placedon ESG investment, MARUI GROUP aims to facilitate the long-term expansionof stakeholder interests (happiness) through constructive dialogue with longterm investors that understand such principles.

Hajime Sasaki
Senior Executive Officer
President andRepresentative Director,
MARUI CO., LTD.

Everyone knows the importance of valuing both their individuality while coexisting with and valuing the happinessof others. In practice, however, we are often forced to compromise one of these values or to choose between
them. At MARUI GROUP, we first faced this issue in our business a decade ago when we began developing shoes
through co-creation with customers. These efforts led us to develop a wide range of shoe sizes to accommodate
all customers, an undertaking that had previously been avoided due to its adverse impact on corporate earnings.
After that, we expanded our co-creation activities to include product creation, store development, and other areasof operations, engaging with countless individuals on various issues through these activities. This process mademe realize that co-creative businesses accommodating all customers brought happiness to large numbers ofpeople by addressing previously neglected social issues while simultaneously creating unprecedented value.
Looking ahead, I hope to expand the scope of our co-creation activities with customers, business partners,­communities, society, and other stakeholders to create even greater value for the future.

VISION BOOK 2050

27

Financial Inclusion

Provision of options for alleviating income disparity

Financial Inclusion
MARUI GROUP’s policy of financial inclusion was arrived at by evolving the Company’s co-creation management into co-creation sustainability management. Up until today, MARUI GROUP has continued to provide
credit to younger generations and everyone else in order to overcome the social issue represented by the­exclusivity of financial services to a limited range of wealthy individuals. EPOS cards will be evolved from ahighly convenient business into a vessel for promoting financial inclusion going forward in order to establish
a sustainability platform through which we can transcend the dichotomy represented by globally widening
income disparity.

Options for Alleviating Income Disparity

Through financial inclusion, MARUI GROUP seeks toresolve income disparity starting with existing EPOS
cardholders. The majority of EPOS cardholders are in
their 20s or 30s, meaning that many of them will findthemselves in need of large amounts of money as theirlife stage changes. To communicate to these customers
the importance of lifelong asset building, MARUI GROUP
established a securities company, which became the firstcompany in Japan to allow for investment trusts applicable under Tsumitate NISA to be purchased with credit

cards. We continue to expand the scope of our financial
services for alleviating income disparity. Furthermore, weare expanding the range of options we offer to include
non-Japanese residents of Japan with the goal of supplying new financial services that help them address the difficulties faced when going to school or working in Japan.
Over the long term, we hope to provide these services
both in Japan and overseas, and this aim is reflected in
the following long-term targets.

Younger generations
Non-Japaneseindividuals in Japan

Customers
Non-Japaneseindividuals

MARUI GROUP’s

MARUI GROUP promises to provide financial services
to 10 million or more people worldwide by 2050.

Non-Japaneseindividuals overseas

Financial inclusion
Credit cards

Financial services

Asset building

Financial services through credit cards
Peace of mind for the future through asset building

Other financial services

Financial services for low- and middle-income individuals worldwide
Long-Term Targets

Younger generations andall other customers
Non-Japanese customers
residing in Japan
Overseas customers to be
attracted in the future

28

VISION BOOK 2050

Medium-Term Targets(5 years in the future)

Long-Term Targets(10 years in the future)• EPOS cardholders of 10 million or more• Services provided to 1 million­individuals through tsumiki Securities• Financial services provided to 5 million
or more members of younger
generations• Financial services provided to500,000 or more non-Japaneseindividuals•F inancial inclusion promoted through­investment in 10 or more countries
worldwide• Financial inclusion promoted throughinvestment in 20 or more countries
worldwide

VISION BOOK 2050

Ultralong-Term Targets(30 years in the future)• Financial services provided to 10 million
or more individuals worldwide

29

Provision of options for alleviating income disparity

Financial Inclusion

Transcending of the Income Dichotomy through Credit Cards

Subscription-Based Business Dating Back to Founding

A part of MARUI GROUP’s mission is to promote financial inclusion by providing
financial services to all people, regardless of their age and income. Our decision
to enter into the securities business was based on this mission. The majorityof EPOS cardholders are in their 20s or 30s, and 70% of these cardholders
are women. Input received from customers made us aware of their concerns
for the future regarding money. Seeking to turn these concerns into hope anddevelop a service that will enable customers to increase their money withpeace of mind, we arrived at the scheme of allowing customers to purchaseinvestment trusts with credit cards, a world first. While lowering the hurdle forinvestment, this scheme makes it possible for customers to have payments for
Tsumitate NISA applicable investment trusts be withdrawn from their accountin a similar fashion to their monthly shopping or smartphone bills.

MARUI GROUP launched its business in 1931 by selling furniture to younger
individuals through monthly installment payments. At the time, people who
were new to the workforce could not borrow money. As such products became
more readily available, monthly installment payments arose as a mechanism for
putting those products in the hands of individuals that wanted them but could
not necessarily afford them through a one-time cash payment. Under thissystem, the Company would lend money to customers, which they would pay
back through monthly installments. This differed from one-time cash paymentsin that long-term relationships would be formed as customers repaid theirdebts in 10, 12, or even 24 installments. On reflection, it is clear that thisbusiness was an example of the financial inclusion that MARUI GROUP
promotes today. It could also be said to have been a subscription-type business
in which customers continued to make regular payments after purchase.

Potential and Challenges of tsumiki Securities
First offering service in August 2018, tsumiki Securities is a securities company
specializing in cumulative investments, a form of investment that can be carriedout with peace of mind even by first-time investors. This company offers customers four carefully selected trusts operated by three fund managers that sharethe same vision as MARUI GROUP and are committed to communicating theimportance of asset building. Since it started offering this service, tsumiki­Securities has received applications from approximately 13,000 individuals(as of January 2019), and the ratio of these applicants that were younger or­first-time investors was much higher than that of existing financial institutions.
This achievement is thought to be due in part to our customer base of 6.6
million EPOS cardholders, the ease of application via the Internet, and theconvenience of credit cards. Another important factor was the staff that offer
support to help alleviate apprehensions regarding asset building, making it
feel more familiar to customers.
Looking ahead, tsumiki Securities will seek to promote the shift from savings
to investment, which has yet to take off in Japan, in order to instill cumulative
investment as a part of our culture. At the same time, cultivating employees
capable of responding to customers’ diverse asset building needs will be a task
to be addressed over the foreseeable future.

4897

4897

GOOD
THRU
有効期限

有効期限
THRU
GOOD

MONTH / YEARMONTH / YEAREPOS cards are IC chip-equipped, multipurpose Visa
cards with a cardholder base of approximately 6.6
million individuals (as of March 2018). A major characteristic of this cardholder base is the large portion
represented by younger generations and women, demographics with high credit needs. This characteristic is a result of MARUI GROUP’s unique expertise inassigning credit based on usage and payment histories, rather than age, profession, or income.

Cumulative investment specialist
tsumiki Securities Co., Ltd.

Fund manager

Trust nameCommons AssetManagement, Inc.

Commons 30 Fund

Saison AssetManagement Co., Ltd.

SAISON Vanguard
Global Balanced Fund
Saison Shisan Keisei no
Tatsujin Fund

Rheos Capital
Works Inc.

Hifumi Plus Fund

Potential of Financial Inclusion
With an increased focus on financial inclusion, MARUI GROUP will turn its­attention to services that are both functional and have a strong subscription
element, such as rent guarantee and asset building services for younger generations. We aim to create the ultimate subscription business by having customers pay for these services with their EPOS cards, thereby creating stable
increases in lifetime value through recurring transactions. Furthermore, we
intend to expand EPOS cards, a vessel for promoting financial inclusion,
overseas in the future in order to evolve these cards into a sustainability
platform and thereby provide options for transcending the dichotomy­represented by globally widening income disparity.

20–29: 33%

Global Promotion of Financial Inclusion

20–49
87%

Distribution
by Age40–49: 20%

30–39: 34%(Reference) Ratio of Applicants Aged 20–49
Approx. 30% based on survey by The Investment
Trusts Association, Japan
Approx. 60% at independent fund managementcompanies

30

No experience:
68%

Experienced: 25%

Yoshinori Saito

Investment
Experience

Novices*: 7%(Reference) R atio of Applicants with No Investment
Experience
Approx. 40% at independent fund managementcompanies* “Novices” refers to customers with less than one
year of investment experience.

VISION BOOK 2050

Non-Japanese individuals can face challenges insetting up their lives in Japan, whether when renting
housing, acquiring a mobile phone, or applying
for a credit card. To help address the living needsof non-Japanese individuals, we issued the GTNEPOS CARD through the combination of thedatabase of non-Japanese individuals of Global
Trust Networks Co., Ltd., and MARUI GROUP’s
credit card platform.

Message from a Financial Inclusion Business Representative

Customer Statistics (As of December 2018)
50 andabove: 13%

The ROOM iD advance-payment rent guarantee
service combines advance payments for rent witha guarantee service to eliminate the need for aguarantor when renting housing, a valuable service
as it becomes more difficult to find a guarantor
due to the aging population and falling birthrate.
By merging MARUI GROUP’s creditability, whichenables it to provide advance-payment services,with EPOS cards, we have achieved impressive
revenues from this service.

We opened a tsumiki Securities pop-up store on thefirst floor of Yurakucho Marui for one month beginning on October 14, 2018. During this period,
customers were given the opportunity to experiencetsumiki Securities’ services, set up an account, or
receive support to address questions, concerns, orissues related to cumulative investment. As anotherfacet of our tailored support for customers offeredthrough Marui stores, a fun talk event was held on
October 26, 2018, in which participants discussed
the benefits of cumulative investments.

Senior Executive Officer
President andRepresentative Director,
Epos Card Co., Ltd.

MARUI GROUP is promoting financial inclusion, the act of providing financial services to all people, regardlessof their age or income. On this front, we have proceeded to develop businesses that are unparalleled in terms ofgrowth, efficiency, and health. These businesses have been built through our credit card-based payment services
provided largely to younger generations, our unique business model that defies the conventions of the financial
and credit industries based on the credit philosophy that “creditability should be built together with customers,”
which has guided us since our founding, and our initiatives for transcending dichotomies as part of our long-term
vision. We entered into the securities business in 2018. This move was representative of our commitment to­expanding the range of financial services we offer, which currently include payment and asset building services,
based on the concept of inclusion. Furthermore, we look to broaden our EPOS cardholder base by attracting
younger generations as well as the growing non-Japanese population in Japan. We will also endeavor to improvefinancial literacy through distinctly MARUI GROUP initiatives in Japan, where financial education is lagging behind
other countries, while promoting financial inclusion through investment on a global scale.

VISION BOOK 2050

31