CO-CREATION MANAGEMENT REPORT
CO-CREATION MANAGEMENT REPORT 2023

2023

FOSTERING OF INNOVATION

Publication date: February 2024
Publisher: Co-Creation Management Promotion Project Team, MARUI GROUP CO., LTD.
Planning and production: EDGE INTERNATIONAL, INC.
Printed in Japaninequality and social divides. We thus find ourselves placed at a crossroads in our quest to ensure that the
future offers hope for all. In 2021, MARUI GROUP declared its commitment to generating a positive social
impact together with members of younger generations. Our impact targets act as the guiding principles forour efforts to shape a better future while also indicating the social issues we intend to tackle. At the sametime, we realize that, as a company, MARUI GROUP cannot survive if it does not achieve earnings growth.
This is why we are adopting an approach aimed at achieving earnings growth while generating our desired
impact as two leaves of the same plant. MARUI GROUP is in the process of undertaking a social experiment tofoster the innovation that will enable it to accomplish these objectives. These initiatives will be supported byour efforts to pursue co-creation with customers and other stakeholders, the assets MARUI GROUP uses inthese efforts, and our updated corporate culture.

ProfitImpact

CO-CREATION MANAGEMENT REPORT 2023

The world is currently plagued with a myriad of pressing issues, ranging from climate change to economic

CONTENTS

Constant Fostering of Innovation
Fueled by Individual Passions

02

CEO Message— Hiroshi Aoi, President and Representative Director, Representative Executive Officer, CEO, MARUI GROUP CO., LTD.

10

Evolution into a Company That Contributes to the
Resolution of Social Issues
12

Business & Culture—Innovation and Evolution

14

Assets Forged through Merger of Finance and Retailing

16

MARUI GROUP’s Strengths—Unique Excellence18

A Company That Contributes to the Resolution of Social Issues

20

Dialogue 01: The Variety of Ways We Can Change Society— Toshiki Abe, Representative, Ridilover Inc. andHiroshi Aoi, President and Representative Director, Representative Executive Officer, CEO, MARUI GROUP CO., LTD.

26

Social Experiment 1: Fostering of Innovation
28

Sustainable Lifestyles

32

Financial Inclusion
34

42

50

Transition from Installment Payments to Embedded FinanceSupport for Individuals in Pursuing Their Interests

Social Experiment 2: Corporate Culture 2.0
52“Flow”—A State of Heightened Engagement That Fosters Well-Being and Innovation— Reiko Kojima, Director, Senior Executive Officer, and CWO, MARUI GROUP CO., LTD.

58

Three Flows for Heightening Future Corporate Value— Akira Sato, Partner, Value Create Inc.

62

Update from Version 1.0 to Version 2.0 of Ever-Evolving Corporate Culture
64

Workstyle and Organizational Innovation

66

Digital Transformation

69

S ocial Experiment as Part of Evolution into a Company
That Contributes to the Resolution of Social Issues

70

Dialogue 02: Corporate Transformation to Allow Employees to Embrace
Their Emotions and Unleash Their Creativity— Naofumi Tsuchiya, Representative Director and CEO, Goodpatch Inc. andHiroshi Aoi, President and Representative Director, Representative Executive Officer, CEO, MARUI GROUP CO., LTD.

74

Intangible Assets Driving Growth in MARUI GROUP’s Corporate Value— Hirotsugu Kato, Director, Managing Executive Officer, and CFO, MARUI GROUP CO., LTD.

79

Corporate Culture Unleashing Individual Creativity
It is people who create innovation, and their ability to do so hinges on the degree to which they
can unleash their creativity. This is why MARUI GROUP is so committed to cultivating a culture of
acceptance of failure and encouragement of ambition. We hope to develop an environment inwhich setbacks are expected and employees are driven to constantly tackle new challenges inorder to evolve into a company that contributes to the resolution of social issues.

MARUI GROUP’s Governance Focused on Six Stakeholder Groups
83

Our Flow Experiences

92

Officer Skill Matrix

98

Overview of MARUI GROUP

104

Editorial Policy

Cautionary Notice regarding Forward-Looking Statements
Performance forecasts and other forward-looking statements contained in this report represent the Group’s best judgments based on
information available at the time of this report’s publication and therefore contain a degree of uncertainty. It is possible that actual
performance could differ materially from these forecasts due to a variety of factors. Economic conditions, foreign exchange rates,and stock price movements are among the factors that could have a major impact on performance.

01

MARUI GROUP will function as a social experiment for how we can transcend
the dichotomy between earnings growth and the resolution of social issues.

Hiroshi Aoi
President and Representative Director, Representative Executive Officer, CEO

02

03

/// CEO MESSAGE ///Courage to Advance Toward the Next Stage,
Inspired by Human Capital Management
I see 2023 as the year in which MARUI GROUP embarked
on its advancement toward its next stage. This is also ayear in which we have finally started to see connections
being formed between the various initiatives we haveundertaken thus far, and the vision we imagined has thus
begun to take shape. Moreover, the times have caught up
with our initiatives, and our values are coming to alignwith those of society.
This realization is underscored by the recent trends
pertaining to human capital management. The basic
tenets of human capital management are to position
people as the primary proponents of value creation andto invest in these people and utilize their talents toheighten corporate value. This approach stands in stark
contrast to prior management conventions, which have04

viewed people as a cost to be controlled. Human capitalmanagement has long been a priority in Europe and theUnited States, but only just recently, specifically since2020 or so, has Japan been turning its attention toward
this approach. Discussions regarding human capitalmanagement in Japan have been advanced largely by
the Ministry of Economy, Trade and Industry.
These discussions have led to the decision to makedisclosure of information related to human capital in acompany’s annual securities report mandatory beginningin the fiscal year ended March 31, 2023. This decision
resulted in a sharp rise in the amount of attention
directed toward human capital management, prompting
many to view 2022 as the start of Japan’s full-fledged
promotion of this practice. MARUI GROUP was quick toembrace this trend, providing explanations on its humancapital management activities for shareholders and otherinvestors at a financial results briefing held in May 2022
(see presentation entitled “Human Capital-Focused
Management of MARUI GROUP #1 Corporate Culture
Reforms” for more information). We also included humancapital-related information in the annual securities report
we disclosed in June of the same year.
In these activities, we came to realize that theapproach which has come to be known as “human capital management” is shockingly similar to the approachthat MARUI GROUP has been taking for the more than
15 years since 2007.
Of course, it is not as though the term “human capitalmanagement” existed 15 years ago, and we were thus
not engaged in “human capital management” in the literal
sense. Rather, what I mean to say, is that the measures
we took to become the type of company we envisioned
or to work as we desired as part of exercising MARUIGROUP’s corporate philosophy—“equate the developmentof our people with the development of our company”—
have resulted in an approach that matched that ofhuman capital management.
When we became aware of this pleasant coincidence,
we found it most empowering. This realization cast lighton the fact that the times had caught up with the principles we have cherished thus far, signifying that ourvalues have aligned with those of society. We were presented with proof that both society and MARUI GROUP
value the same principles and that our values matched
the times. This feeling of empowerment brought us joy/// CEO MESSAGE ///and gave us the courage to start our advancement
toward the next stage.
Human Capital-Focused Management of MARUI GROUP #1
Corporate Culture Reforms
www.0101maruigroup.co.jp/en/ir/pdf/others/h_report.pdf

Introduction of New Article, “Exercise of Corporate
Philosophy,” into Articles of Incorporation toFurther Cement Vision
I would now like to continue our discussion of the topic
of human capital management by talking about the steps
we have taken thus far and the path we will take going
forward (see presentation entitled “Human CapitalFocused Management of MARUI GROUP #2 Evolution toCompany Resolving Social Issues” for more information).
Human Capital-Focused Management of MARUI GROUP #2
Evolution to Company Resolving Social Issues
www.0101maruigroup.co.jp/en/ir/pdf/others/h_report_2.pdf

In 2019, we unveiled MARUI GROUP’s 2050 Vision,
which describes our vision of harnessing the power ofbusiness to build a world that transcends the dichotomies of impact and profit. This move created the current
that would culminate in our definition of impact targets,alongside standard financial targets pertaining to earnings and capital efficiency, in the medium-term management plan that was launched in 2021.
Our impact targets pertain to the social issues MARUIGROUP strives to tackle. The goal in defining these targets was not merely to introduce a new set of targets.
Rather, we sought to reshape our approach toward management so that our financial targets would be met asa result of the accomplishment of our impact targets.
However, even after we had effectively defined the overarching themes for our impact targets, we still needed
to undertake a process of trial and error to determine
how best to incorporate these targets into our actual
business activities.
As we undertook this process, we began to witness
the gradual creation of innovations that enabled us togenerate earnings while still having our desired impact
on society. Examples of such innovations found in
Co-Creation Management Report 2023 include our Kesoubrand of sustainable shoes, renewable energy initiatives,

Newly Established Article 2. Exercise of
Corporate Philosophy
Through the exercise of its corporate philosophy of“continue evolving to better aid our customers” and“equate the development of our people with the development of our company,” MARUI GROUP strives to fulfill its
mission of contributing to the creation of an inclusive
society that offers happiness to all.
By merging finance and retailing, the Company aspires
to provide economic enrichment as well as emotional
enrichment in the form of happiness and to create asociety in which everyone is able to obtain this happiness.
However, this important mission cannot be carried out
by the Company alone. Accordingly, an approach toward
fulfilling this mission has been adopted entailing cocreation with customers, investors, communities andsociety, business partners, and future generations.
By engaging in such co-creation management withstakeholders, MARUI GROUP works to create harmony
between the interests and happiness of all of its stakeholders while generating earnings and contributing to theresolution of social issues through its business.

social bonds, and the HERALBONY Card. These initiatives may still only be in their infancy, but this does notchange the fact that they are helping us produce earnings along with our desired impact.
It is our goal to increase and develop such initiatives inorder to generate larger and more wide-reaching results
so that MARUI GROUP can evolve into a company that
contributes to the resolution of social issues. To further
cement this vision, we revised our articles of incorporation to include the new article of “Exercise of Corporate
Philosophy” following approval at the General Meeting of
Shareholders held in June 2023. Articles of incorporation
stipulate the rules that must be followed in the operationof a company and are therefore sometimes referred toas the “constitution” of that company. I recognize that thearticles of incorporation are important, not just for shareholders but for all stakeholders. For this reason, we havechosen to include the text of the newly introduced article
in its entirety in this report.
Here, I declare MARUI GROUP’s intention to evolve into
a company that contributes to the resolution of social
issues by fulfilling its mission of co-creating an inclusive
society that offers happiness to all together with stakeholders in accordance with its corporate philosophy.
05

/// CEO MESSAGE ////// CEO MESSAGE ///Figure 1: Update to Impact Targets
Impact 1.0 (May 2021)

Creating a future for
future generations
togetherRealization of a carbon-free society

Creation of a circular economy

Help realize a carbon-neutral society
Creating a future for
future generations
togetherCreating happiness forindividuals together
Support for individual preferences

Creating happiness forindividuals together

Support future generations to“create businesses”

Support the personalities ofindividuals
Support the health of individuals
Support individuals in utilizing
their money

Provision of venues for co-creation
Facilitation of workstyles that aretransparent to both internal andexternal stakeholders

Innovate for sustainableconsumption and living

Support individuals in pursuingtheir interests

Assistance for self-actualization

Creating platforms
for co-creation

We thereby aim to achieve earnings growth while contributing to the resolution of social issues.

Impact 2.0 (June 2023)

Creating an ecosystemfor co-creation

Provide venues for co-creation
Innovate workstyles andorganizations

Figure 2: Impact KPIs and Financial KPIs
Themes / Priority Measures

ImpactHelp realize a carbon-neutral society

Creating a future for
future generations
togetherInnovate for sustainableconsumption and living

Support future generations to“create businesses”
Support individuals in pursuingtheir interests

2030 Impact KPIs

Financial Value

Reduction of CO2

Over 1 million
tons

Users participating in “innovation insustainable consumption and living”

Over 1 million
peopleOver ¥680
billion intransactions

Companies offering options for“innovation in sustainable consumption and living”

Over 1,000
companies

Lifetime value(LTV): Over ¥90
billionInvestment in future generation
entrepreneurs

Over 100 cases

Users of cards that support interests, personalities, and healthOver 3 million
peopleCompanies supporting interests,
personalities, and healthOver 200
companies

Domestic and overseas young
people and other users of financial
services

Over 10 million
peopleOver ¥3.5 trillion
in transactions

Supportive investment throughco-creative partners

Over 20 countries worldwide

LTV: Over ¥250
billionSupport the personalities ofindividuals
Creating happiness forindividuals together

Support the health of individuals

Support individuals in utilizing
their money

Creating an ecosystemfor co-creation

Provide venues for co-creation

Innovate workstyles andorganizations

06

Over ¥1.3 trillion
in transactions
LTV: Over ¥200
billion

Link Between Impact KPIs and Financial KPIs
In conjunction with the revision to our articles of incorporation, we updated the impact targets we announced in
2021 to create the new impact targets 2.0 (see Figure 1).
These updated impact targets indicate the path we willtake toward exercising our corporate philosophy andfulfilling our mission.
In addition, we have defined impact key performanceindicators (KPIs) as well as financial KPIs, and targets
have been set for these KPIs to be accomplished by2030 (see Figure 2). KPIs represent important indicatorsof progress toward the accomplishment of an organization’s goals and are thus generally expressed in numerical terms. Meanwhile, a company’s social impact issomething that is difficult to express in numbers. Despite
this reality, we chose to set numerical targets for our
impact KPIs in order to confirm that our initiatives arecontributing to the progress of our goals.
Another characteristic of MARUI GROUP’s KPIs is how
we have chosen to link our impact KPIs to our financial
KPIs. This was done to guide us in generating earnings
while achieving our desired impact. The question thenbecomes: How to go about doing this? Determining theideal approach requires a road map that details how theaccomplishment of our impact targets will lead to theaccomplishment of our financial targets. For this reason,
we employ logic models, representations of the logicalcause–effect relationship between an initiative and its
intended goal.
IMPACT BOOK 2023, which MARUI GROUP published inJune 2023, contains a logic model that illustrates how ourinitiatives for achieving each specific impact target willcontribute to the realization of our desired impact and to
improvements in earnings and capital efficiency. This
document also provides a report on the progress of said
initiatives. I invite anyone who is interested to take a look.

Companies that create opportunities Over 350
for co-creationcompanies
Participants in the ecosystem forco-creation

Over 10,000
peopleInnovation creation personnel

Over 5,000
peopleInternal rateof return: Over10%

Development of an Organization in Which “Flow States”
Can Be Achieved through Work to
Fully Exercise Creativity

IMPACT BOOK 2023 (released in June 2023)
www.0101maruigroup.co.jp/en/ir/pdf/impactbook/2023/impactbook_all.pdf

It cannot be denied that achieving earnings growth while
contributing to the resolution of social issues is something that is easier said than done, an undertaking thatcan be expected to be incredibly challenging. If we are toaccomplish this lofty goal, it will be crucial for all employees to fully exercise their creativity.
When considering how best to help employees fully
exercise their creativity, we turned to the idea of “flow”
defined by psychologist Mihaly Csikszentmihalyi. “Flow”
refers to a state of being so engaged in an activity that
one forgets time and themselves. This occurs when thechallenge at hand matches the skill level of the individual.
Csikszentmihalyi speaks of how, by experiencing a“flow state,” people are able to fully exercise their creativity to overcome greater challenges and grow as a result.
Moreover, this state creates a feeling of joy in relation to
the associated experience. By developing an organizationin which employees can achieve a flow state throughtheir work, we aim to achieve our vision while contributing to the happiness of employees.
This is a goal that we are approaching from the two
perspectives of workstyle and organizational innovationand digital transformation.
Our approach toward workstyle and organizationalinnovation entails the expansion of project team-oriented
workstyles. In addition to traditionally structured organizations, we also look to expand opportunities to engage
in project team-oriented workstyles, which involve coordination across ranks and organizations, and to take partin co-creative teams that work together with external
initiatives and the start-up companies in which MARUIGROUP invests.
At the same time, we look to develop organizations
without direct supervisors. In such organizations, thesection managers have traditionally been responsible foroverseeing that organizations will be reframed as teamsupporters, as opposed to organization supervisors. In
this new role, these individuals will be expected to createa flat organization in which all members act with autonomy in order to exercise creativity as a team.
We are also stepping up early promotions to management positions. Specifically, we have revised human07

/// CEO MESSAGE ///resource systems to support the early promotion ofindividuals anticipated to contribute to improvements incorporate value by reducing the minimum age for management positions from 29 to 26. This allows talented
individuals to quickly climb the ranks in what has been
deemed a form of human capital investment. By providing highly capable young employees with opportunities
to exercise their talents earlier in their careers, we look toaccelerate the creation of innovation.
Meanwhile, we are promoting digital transformation
based on the understanding that digital technologies areimperative for rectifying the disparity between the current
state of the Company and its vision. Digital technologies
can be used to lend greater speed and leverage to our
initiatives. We also recognize the need to employ a rapid
cycle of verifying hypotheses if we are to accomplish ourlofty goal of achieving earnings growth while producing
our desired impact. Unfortunately, though, MARUIGROUP found itself lacking the people necessary toadvance digital transformation. This is why we founded
Muture Corporation, a joint venture with cutting-edge
user experience design company Goodpatch Inc., in April
2022. Through Muture, we have commenced recruitmentof the type of specialists who would not normally beattracted by the MARUI GROUP brand. We have thereby
been able to attract numerous individuals who are at the
pinnacle of their respective industries, and these individuals are helping with the development of apps and web
services for MARUI GROUP.
Muture made it possible for us to harness the skills of
specialists for use in product development. This, however, revealed some new challenges. Specifically, we
became aware of the need to make the entire organization more agile if we are to advance product development through Companywide efforts and to continuously
evolve these efforts.
MARUI GROUP has developed a prowess in relation tocore systems development. However, we are lacking thepeople capable of leading the development of completely
different types of agile organizations. This is why weinvited Naofumi Tsuchiya, representative director and
CEO of Goodpatch, our partner in establishing Muture, toserve as our CDXO (chief digital transformation officer) in
June 2023. Mr. Tsuchiya possesses sophisticated insightin relation to organization development and has theperspective of both a digital technology specialist and08

a manager. The advice he offers based on theseperspectives is anticipated to help us develop moreagile organizations.
Definition of Numbers of New Undertakings andAttempts as Action KPIs to Encourage Employees toWork Toward Their Ambitions
As we move forward with the initiatives I have discussed
thus far, we are also pressing ahead with the transformation of our corporate culture. In the past, we have sought
to develop a distinctive corporate culture through uniqueinitiatives such as encouraging voluntary participation invarious initiatives by employees. Going forward, we willseek to function as a social experiment in order to fostera culture of acceptance toward failure and encouragement of ambition. To this end, action KPIs have been
identified including the numbers of new undertakings
and attempts with the goal of encouraging employees towork toward their ambitions.
Included in the number of new undertakings is thenumber of participants in project teams, initiatives, andco-creative teams as well as in internal app development
and web service development contests. The number ofattempts, meanwhile, looks at the numbers of both/// CEO MESSAGE ///successes and failures in attempts to create innovation
for the improvement of operating processes, the development of new products and services, and the creation of
new businesses.
We have set the targets of 5,000 new undertakingsand 5,000 attempts by the fiscal year ending March 31,
2031. We have also launched new initiatives to support
such undertakings and attempts, including the introduction of the Fail Forward Award into internal award programs, which honors failed attempts to create new
businesses, as well as forums for sharing examples offailures. By tackling various new challenges as a form ofsocial experiment, we are working to overwrite the negative connotation of failure to create a corporate culture inwhich it is deemed only natural for everyone to experience failure and in which people are not afraid to tackle
new challenges.
I think that this type of corporate culture is somethingthat many Japanese companies, not just MARUI GROUP,
are in dire need of. We therefore look to function as asocial experiment and to thereby contribute to society byleading the way in fostering such a culture. Through thisexperiment, MARUI GROUP will strive to become a company that can constantly create innovation.
High Growth Coupled with High Returns Achievedby Evolving into a Company That Contributes to
the Resolution of Social Issues through
Human Capital Investment
In conjunction with such initiatives, we are also ramping
up our investments in people. Our anticipated internalrate of return for human capital investment is 12.7%,
which is higher than the level of 10% that is the standard
used for returns from investments in stores and othertangible assets. Given these high anticipated returns, we
expect to be able to achieve highly efficient management
by investing more than ¥65.0 billion in human capitalover the next five years.

The increase in human capital investment is also
expected to drive improvements in corporate value.
Looking at the portion of corporate value attributable tointangible assets, we will see intangible assets accounting for around 90% of the corporate value of U.S. companies, while the figure for Japanese companies is much
lower at 32%. Focusing just on MARUI GROUP, the ratio
of intangible assets to total assets is currently 44%.
Through our investments in human capital going forward, we look to raise this ratio to the level of 80% seenat U.S. companies by 2030 and to thereby boost corporate value.
In this manner, we plan to adopt a new management
approach that transcends the previously perceived
dichotomy between growth and returns to achieve highgrowth coupled with high returns.
Lastly, I would like to touch on the type of corporate
value that MARUI GROUP should pursue going forward.
By evolving into a company that contributes to the resolution of social issues through human capital investment,
we will aspire to raise return on equity from the current
level of 10% to 25% and to increase the price-to-bookratio from the present 1.7 times to 5.0 times going forward. It is my goal for us to be able to look back at 2023
five or 10 years from now and to recognize that this year
was the year in which MARUI GROUP embarked on its
advancement toward its next stage. I will devote my all,or rather, I will achieve a flow state to work toward thisgoal through co-creation together with our stakeholders.
I hope that we can look forward to the ongoing supportof our customers, investors, business partners, communities and society, and future generations.
December 2023

President and Representative Director
Representative Executive Officer, CEO

The president’s message from Co-Creation Management Report 2021 can be found below.
2021: VISION ENCAPSULATED IN IMPACT TARGETS
www.0101maruigroup.co.jp/en/ir/message/ceo/

09

EVOLUTION INTO A COMPANY
THAT CONTRIBUTES TO
THE RESOLUTION OF SOCIAL ISSUES

Since its founding in 1931, MARUI GROUP has continued to devote itself to contributing to the happiness of customers, growing as it transforms its business model and corporate culture together withthe times. Today, we are aspiring to evolve into a company that contributes to the resolution of social
issues in accordance with our mission of contributing to co-creating an inclusive society that offers
happiness to all. Driven by our strong sense of commitment toward ensuring a brighter tomorrow for
future generations, we are working toward this lofty goal by accenting the assets we have accumulated over our 92-year history with our own unique excellence.

10

11

EVOLUTION INTO A COMPANY THATCONTRIBUTES TO THE RESOLUTION
OF SOCIAL ISSUES

Social Experiment for Evolving into a Company That
Contributes to the Resolution of Social Issues

Innovation and
Evolution

Business &Culturecontributing to the happiness of customers, the sources of whichchange together with the times, while developing and supplying
services that merge finance and retailing based on our corevalue—the co-creation of creditability.
After assuming the position of president of MARUI GROUP in
2005, Hiroshi Aoi has marched ahead with a drastic transformation of the Company’s corporate culture while seeking to breakaway from its previous labor-intensive business model focused onretailing. In 2019, Aoi proposed the introduction of future generations into the Company’s previously five groups of stakeholders
while announcing MARUI GROUP’s 2050 Vision. This is also when

Guided by its corporate philosophy of striving to “continue evolving
to better aid our customers” and “equate the development of ourpeople with the development of our company,” MARUI GROUP is
endeavoring to fulfill its mission of contributing to co-creating an
inclusive society that offers happiness to all. The Company aspires
to provide economic enrichment as well as emotional enrichment
in the form of happiness and to create a society in which everyone
is able to obtain this happiness. From the time of our founding
in 1931 up until today, we have continued to seek means of2006~
Business model

2019~

Labor intensive

Capital intensiveIntellectual creation

Retailing driven

Fintech driven

Fintech, Retailing, and Forward-Looking Investments

AssetsFixed assets

Financial assets

Intangible assets

Investment

Investments in tangible assets

Treasury stock acquisitions

Investments in intangible assets

Appointment of Hiroshi Aoi as president
Start of issuance of EPOS cards

Start of sustainability management

Revision of Money Lending Business Act

Establishment of Muture Corporation
Introduction of restricted stock compensation system for MARUI GROUP employees
New record for total Group transactions of¥3,957.3 billion

EPS of¥200.0 (target)

Registration of MARUI FACILITIESCo., Ltd., as a power retailer
Establishment of D2C & Co. Inc.

Establishment of corporate philosophy
Transition to pure holding company system

Declaration of intent to evolve into a company that
contributes to the resolution of social issues
Total Group transactions of ¥4,520.0 billion (target)
EPS of ¥128.0 (target)
Formulation ofco-creation philosophy
Establishment of tsumiki Co., Ltd.

Earnings per share (EPS)

Fiscal year
ended September 30,
2003

Formulation of MARUI GROUP’s
2050 Vision
Issuance of Japan’s first green bonds
from a retailer to be used 100% forrenewable energy applications
EPS of ¥116.0 (first new record in
28 years)Commencement of transition to shopping
centers based on fixed-term rental contracts

Financial crisis of 2008

Fiscal year
ended January 31,
2001

we began our campaign to transform ourselves into an intellectual
creation company through fintech, retailing, and forward-looking
investments. This brings us to 2023, when MARUI GROUP
declared its intent to evolve into a company that contributes tothe resolution of social issues by accelerating its investments inhuman capital and other intangible assets. In this quest, we seek
to function as a social experiment in how to surmount the challenging task of creating a business model that achieves earnings
growth while contributing to the resolution of social issues.

Introduction of impact targets
Establishment of business incubation company okos Co., Ltd.
Decision to issue digital social bonds

Cancellation of all rent payment for
tenants during store closures amid COVID-19 pandemic
Launch of business contests for members of younger generations
Fiscal year
ended March 31,
2006

Fiscal year
ended March 31,
2009

Fiscal year
ended March 31,
2015

Fiscal year
ended March 31,
2019

Fiscal year
ended March 31,2021

Corporate Culture 1.0

Fiscal year
ending March 31,
2024

Fiscal year
ending March 31,2026

Corporate Culture 2.0

Corporate Culture 1.0

Corporate Culture 2.0

Culture of Autonomy through Action and Voluntary Participation

Culture of Acceptance Toward Failure andEncouragement of Ambition

Corporate culture reform activities centered on corporate philosophy, engagement, workstylereforms, diversity, voluntary participation, intra-Group profession changes, evaluations emphasizing
both performance and value, and well-being (see page 62)

Social experiment on how to achieve earnings growth while contributing to theresolution of social issues supported by workstyle and organizational innovationand digital transformation (see pages 63–69)

12

13

EVOLUTION INTO A COMPANY THATCONTRIBUTES TO THE RESOLUTION
OF SOCIAL ISSUESMARUI GROUP’s Stance Regarding Assets

Assets Forged through Merger ofFinance and Retailing
Investment in businesses that will have a positive impact on the future as a social experiment
for achieving earnings growth while contributing to the resolution of social issues through innovation

The assets MARUI GROUP has amassed represent the insightand ideas of our people, which have been transformed into
organizational assets to be used to shape the future of theCompany. We utilize these assets to contribute to the resolutionof social issues as well as to grow the Company and its market
share. When aspiring to generate a desired impact, we will pool
our knowledge with colleagues and co-creation partners whoshare our aspirations. By generating synergies between ourassets and services and those of our partners, we strive tocreate unprecedented new businesses and generate new
impacts. MARUI GROUP is confident that the pursuit of synergies between assets, social issue resolution, and co-creation is
the ideal course for its business in the age of intangible assets,
and we will walk this course together with partners who share
our ideals.

Prior approach(tangible asset driven)

Business model

MarketCompetitiveness

Future approach(intangible asset driven)

AssetsSocial issue resolution

Co-creation

Growth & Efficiency (GDP)Growth & Well-being (GDW*)* GDW: Gross domestic well-being

MARUI GROUP’s ASSETS

Forward-Looking Investments
Internal new business investment(okos Co., Ltd., and official Groupwide initiatives)+

Outward co-creative investment(Co-Creative Investment Department,
D2C & Co. Inc., co-creative teams)

Base of More Than 7.3 Million EPOS Cardholders

Network of 22 Marui and Modi Stores

In the fiscal year ended March 31, 2023, the Fintech segment* generated

Rather than being preoccupied with selling products, Marui and Modi

total transactions of ¥3.7 trillion, which were a product of its base of EPOS

stores are oriented toward creating value that is unique to physical stores,

cardholders. Around half of these cardholders are under 40 and 66.9% are

merging both online and offline elements. Under our strategy of promot-

active users. Meanwhile, we have maintained a low ratio of delinquent debt

ing stores that do not sell, we are operating stores with the aim of provid-of 1.61%. We offer a lineup of collaboration cards with 41 facilities acrossing venues at which customers can have eventful experiences and newJapan and with prominent artists and anime works as well as cards thatencounters. These stores draw around 200 million visitors a year.

promote renewable energy and support social contributions.

Retailing

Fintech22 physical stores
Reliability of MARUI brand
Annual visits byapprox. 200 million ­customers
Retailing and distribution staff

More than 7.3 million
EPOS ­cardholders
Credit expertise
Stable financial base
IT and system staff

Philosophy
Continue evolving to better aid our customers
Equate the development of our people with the development of our company

Team of 4,500 Employees Sharing Our Ideals

Wide-Ranging Operations Merging Finance and Retailing

The people who tend to join MARUI GROUP do so because they sharethe values advocated by our mission, vision, and corporate philosophy.
Almost everyone working at MARUI GROUP has experience serving
customers in stores, which has made them exceptionally proficient at
detecting the needs of customers and of society.

MARUI GROUP possesses internal functions related to a wide range of
operations, including systems development, credit, rent guarantees,
stores, logistics, and investment in start-up companies. In recent years,
we have been augmenting this range of operations with businesses
related to cumulative investments and support for individual preferences in order to tailor our offerings to our customers.

* The prior FinTech segment has been renamed the Fintech segment. No changes have been made to the business operations contained within this segment.

ValuesCreditability should be built together with customers
Pioneer spirit of creating opportunities
Information on Group companies

14

15

Co-Creation ofCreditability

EVOLUTION INTO A COMPANY THATCONTRIBUTES TO THE RESOLUTION
OF SOCIAL ISSUES

The co-creation of creditability—MARUI GROUP’s core value—is based on the
belief of the Company’s founder that “creditability should be built together withcustomers,” rather than assigned to them. Whether in our retailing operations
or in our finance operations, this founding spirit inspires us to go beyond
one-time interactions with customers to build lasting relationships throughwhich we co-create creditability. The co-creation of creditability can be foundat the heart of our various initiatives, including our offline and online initiatives.
This is our unique core value, the value that differs from all other companies,
the value that defines MARUI GROUP and that, if removed, would cause theCompany to cease to be itself.

MARUI GROUP got its start in furniture, items that were quite expensive at thetime, which led the Company to found its business on credit, offering temporary loans based on a given customer’s lifestyle. It was through this businessthat we developed our core value of the co-creation of creditability and accumulated our credit expertise. These strengths have continued to evolve withthe times. We have thus come to provide a variety of services that support the
lives and life events of customers. MARUI GROUP is able to take a uniqueembedded finance approach made possible by operating a financial businesswith direct access to customers through retailing venues.

Unique Excellence
Our unique assets and services are founded on a core element of MARUI GROUP: the strengthof the unique excellence the Company has fostered since its founding. We continue to honeand redefine our unique excellence to sustain a perpetual source of strength that our rivals
cannot mimic.

E

M

B

E

D

D

E

D

→ For more information, please see Transition from Installment Payments to Embedded Finance on pages 34
and 35.

Credit Expertise16

With its various points of contact, MARUI GROUP is constantly tapped into the lifestyles of its customers. Marui andModi stores are our most prominent form of contact point,
but we also connect with customers via EPOS cards used atother commercial facilities and at collaboration partners
through e-commerce sites operated by the Company or its
partners, and through investees. The propensity for communicating with customers that employees cultivate on the sales
floor continues to be applied to business-to-business orbusiness-to-business-to-consumer operations should an
employee choose to relocate away from the sales floor. We
are committed to heightening engagement with customers by
responding to their issues and desires in real time.

Embedded Finance

MARUI GROUP’s Strengths

MARUI GROUP’s principle of the co-creation of creditability has
enabled the Company to maintain a ratio of delinquent debt that isparticularly low in comparison with its peers. Based on this principle, we embrace the concept of financial inclusion. Accordingly,
credit card applications are not judged on the basis of a customer’s age, profession, or income. Rather, we initially set low
credit limits to make it possible to issue cards to a wide range ofcustomers in need of financial services. We then proceed to build
trusting relationships with customers as we raise their credit limit
based on their usage frequencies and payment histories. Today,
we are expanding our utilization of the credit expertise founded on
the co-creation of creditability by extending credit to corporate
customers in addition to individual customers.

Engagement with
Customers

Ability to Transform
InitialCredit Limit

Increased
Credit Limit

Co-Creation ofCreditability

MARUI GROUP’s history is a history of transformation. While the merging offinance and retailing has remained at the heart of our business, our actual
business activities have continued to transform and evolve over the years.
This capacity to transform our assets and strengths is indicative of MARUIGROUP’s overall ability to transform itself. As described in our corporate
philosophy of striving to “continue evolving to better aid our customers” and“equate the development of our people with the development of our company,”
MARUI GROUP’s purpose is not purely to grow itself. Rather, we aspire tocontribute to the happiness of customers and to the resolution of social
issues that change together with the times. Our prime directives are thus toaccomplish our mission, realize our vision, and create our desired impact.
17

EVOLUTION INTO A COMPANY THATCONTRIBUTES TO THE RESOLUTION
OF SOCIAL ISSUESMARUI GROUP has always been committed to supporting thehappiness of customers, the sources of which change with thetimes. To guide our efforts going forward, we identified anumber of pertinent issues as part of the formulation of MARUIGROUP’s 2050 Vision, which was announced in 2019. Theseissues include the noteworthy concerns of climate change andthe shift toward renewable energy as well as less prominentissues such as previously excluded individuals, isolation, andthe happiness of future generations. We then delved deeper into
these issues to define impact targets to be pursued by 2030.
These impact targets include the goal of supporting individual
preferences and individuality. At first, it might seem odd toemphasize such factors, but these are natural areas ofcontributions for a company like MARUI GROUP that dedicates
its attention to happiness and well-being. Supporting individual
preferences and individuality is thus a crucial theme for ourcontributions to society.
A business that contributes to the resolution of social issues
takes an approach that is very similar to that of agile development. Rather than beginning with a completed model, we formulate hypotheses that are quickly put into practice so that we canreceive feedback from users and society to drive improvements.
This process of continuously evolving while forever remaining awork in progress is what is expected of a company that contributes to the resolution of social issues. To support this process,we seek to foster what we refer to as our “corporate culture 2.0,”

which entails a social experiment on how to encourage ambition
while being accepting of failure. However, MARUI GROUP is afor-profit company. This means that we must develop a businessmodel that facilitates earnings growth while also generating ourdesired impact through the act of contributing to the resolutionof social issues. Such a business model will entail a completely
new approach toward management that transcends the previously perceived dichotomy between growth and returns toachieve high growth coupled with high returns. Under this new
approach, MARUI GROUP is now poised to begin its pursuit ofincreased growth and well-being, which we refer to as “grossdomestic well-being,” through synergies between assets, social
issue resolution, and co-creation.

In the following pages, we will look at some examples of
MARUI GROUP’s social experiment. These innovations may still
be in their infancy, but they have already begun to show potential for contributing to earnings growth and to the generation of
our desired impact. We aim to increase and develop suchinitiatives in order to generate larger and more wide-reaching
results so that MARUI GROUP can achieve its mission, realize
its vision, and accomplish its impact targets as a company that
contributes to the resolution of social issues.

IMPACT BOOK 2023
Information on path toward achieving impact targets and logic models used

A Company That Contributes to
the Resolution of Social Issues
Directives

Focus

ActionSocial Issues

Three Business Models Founded on Co-Creation

Impact Targets Based on Three Themes

Forward-Looking
Investments

IMPACT

VisionEnvironment
Climate Change, Resource Depletion,
and Circular Economy
Shift Toward Renewable Energy
Destruction of Ecosystems

01 Creating a future for
future g­ enerations together

EconomyPoverty and Hunger

02 Creating happiness forindividuals together

Growing Middle Class in Asia
Spread of Internet of Things and Control throughArtificial Intelligence

Retailing
Communities and Society

Fintech03 Creating an ecosystem forco-creation

MissionContribute to co-creating an inclusive societythat offers happiness to all
2050 Vision
Build a world that transcends dichotomies ofimpact and profit

Previously Excluded Individuals
Isolation in Developed Countries
Connections and Divisions Between Countries

18

19

EVOLUTION INTO A COMPANY THATCONTRIBUTES TO THE RESOLUTION
OF SOCIAL ISSUES

Inspiration to Draw Out the Innate
Goodwill of People

THE VARIETY OF WAYS
WE CAN CHANGE SOCIETY
DIALOGUE 01

TOSHIKI ABE

HIROSHI AOIEmpathy and Logic and Best Tools for Inspiring Change in Society
Ridilover Inc., a company headed by Toshiki Abe is a company that invests resources in contributing tosociety by identifying the issues people face to resolve these issues through collective effort. This quest
has a lot in common with the goals of MARUI GROUP, which seeks to contribute to the resolution of social
issues through co-creation. The following is a conversation between Abe and MARUI GROUP President
Hiroshi Aoi in which they discuss means of transforming social systems and values.

Toshiki Abe
Representative, Ridilover Inc.
Born in Kyoto in 1987, Toshiki Abe launched the Ridilover platform for arranging education tours of sites related to social
issues in 2009 while still attending the University of Tokyo. He later founded a general incorporated association to manage thisplatform in 2012 before establishing Ridilover Inc. in 2013. The name “Ridilover” is a contraction of the phrase “ridiculous things
lover.” Abe has received numerous awards, including the grand prize in the first NICT Entrepreneurs’ Challenge 2Days contest
arranged by the Ministry of Internal Affairs and Communications and the grand prize in the fourth KDDI∞ Labo competition.

20

Aoi: How many employees does
Ridilover have at the moment?
Abe: We have about 60 employees
right now.
Aoi: That is a big team there.
Abe: We bolstered our team just lastyear, and that was a big undertaking.
The expectations of middle management have also become a lot higher as aresult. If we want to foster the development of new employees, we need toprovide them with opportunities totackle new challenges while supportingthem in these endeavors. However, thesocial sector, where we operate, isknown to attract a lot of sensitive
people, and this is why management
tends to lean more toward the support
side of this equation as opposed to thechallenges side. Everyone is highly
sensitive toward the pain of others, but,as they say, “no pain, no gain.”

Aoi: We also have a lot of highly empathetic employees. However, empathy is
not enough; if you want to resolve anissue, you sometimes need to be strong
and forceful.
Abe: If we act based on empathy alone,
we will tend to favor the status quo. The
difference between business-to-business
operations and business-to-consumer
operations is that the former is based on
logic while the latter is based on support
for one’s specific circumstances.
Transforming society requires a keen
ability to bridge the gap between thesetwo different approaches toward business. On a fundamental level, this entails
maintaining a business-to-businessmindset while affirming the status quo
and addressing people’s needs during thecourse of one’s actual work. I believe thatthe ability of our employees to bridge thegap between these approaches will correlate to our ability to become an organization on the front lines of transforming
society through business-to-consumer

operations. However, fostering this ability
will be no easy task.
Aoi: Both business-to-consumer andconsumer-to-consumer operations havebecome a common part of our everyday
lives thanks to the internet, and the typeof talents and skills required in these
operations are changing. This is creating
an increased need for user interface anduser experience designers. Such individuals use the latest digital technologies intheir work while still being more committed to the perspectives of users thaneven we are at MARUI GROUP, despite
the fact that we actually engage withcustomers in a face-to-face capacity.
Abe: It is crucial to think about the typesof designs that break down the apathyof users to unleash their goodwill andautonomy. I suspect that probably about
98% of people truly want society tomove in a better direction when it comesto social issues. This means that weshould focus on creating designs thatinspire this innate goodwill.

21

EVOLUTION INTO A COMPANY THATCONTRIBUTES TO THE RESOLUTION
OF SOCIAL ISSUES

Aoi: At MARUI GROUP, we refer to thissentiment in terms of offering options
and encouraging self-determination. I
believe that, if we can effectively design
the paths that guide the choices ofcustomers, we can inspire them to work
toward the resolution of social issues. We
must be careful not to offer too many
options, or too few. Also, the venues
through which we propose these options
cannot be too straitlaced nor too playful.
Sculpting the ideal presentation for
options is at the heart of design, and good
designs will help customers take the firststep toward making their own decision.
Abe: If we want people to take an interest in social issues, it is not enough tojust say, for example, “we need toaddress the issue of child poverty.” We
have to go deeper, show what type ofchildren are suffering from poverty andwhat benefits can be provided to them.
I coach elementary school softballteams, and I therefore know that theactivities of such teams hinge on the
support of community volunteers likemyself. When, for example, a member ofthe community notices that the kid they
always see around the neighborhood has
become more polite after joining a softballteam, they may be inspired to help out
with or donate to such activities.

Frameworks for Directing Money
Toward Desired Impacts
Aoi: One reason alone is not enough toinspire someone to action; we need topresent enough reasons to overcome
the threshold that we all have. In thepast, we arranged pop-up store events at
Marui stores for the Netherlands-based

chocolate manufacturer Tony’s
Chocolonely. This manufacturer offers
chocolate in appealing colorful packages and emphasizes presentation inphysical stores so that it can visuallysolicit the brand image its chocolate
creates. Behind this vivid visual expression, however, is the brand’s commitment to combating slave labor. I am
amazed at how this company has beenable to secure the top market share in
the Netherlands.
Abe: I suspect that we are going to see a
lot of change in power balances over the
next 10 or so years, and this change will
likely be accompanied by shifts in brandimages. MARUI GROUP is incredibly
insightful when it comes to serving
consumers. I would like to find ways totie this insight to both the resolution ofsocial issues and the improvement of
MARUI GROUP’s brand value.
Aoi: It is for the purpose of accomplishingthose goals that we are dedicating ourefforts to co-creation with entrepreneurscommitted to resolving social issues. We
are even partnering with individuals as
young as 18. It is rough how much time ittakes to develop feasible businesses inthis manner, but everything else about theprocess is a delight.
It is often thought that open innovation
ventures have a high likelihood of endingin failure. However, I believe that thisfailure is generally due to a structuralissue, namely, the lack of a mutuallycomplementary relationship. A person
who has the commitment and reasons totackle a social issue may lack theresources to do so. Conversely, an organization can have assets, including theintangible asset of a strong social

I believe that people vote with their wallet. Through EPOS cards, we haveconnections to various aspects of people’s everyday lives. It is for thisreason that we want to drive people unconsciously to make consumption
Abe: I decided to get into my current line of work because of my experiencestudying the brains of monkeys at RIKEN. The biggest difference between
humans and monkeys is how humans are able to define social issues andunite to address them.

22

According to a post on X (formerly Twitter) by Abe on February 10, 2019,
Abe decided to try and go to the University of Tokyo after being recommended andreading the manga Dragon Zakura at age 17, a goal he achieved, and became afisherman at age 19, a position that saw him wrestling tuna with his bare hands ona daily basis. At age 21, he founded Ridilover Inc. together with his colleagues
before starting to teach classes at the University of Tokyo at age 24 and being
included on the Forbes 30 under 30 Asia list at age 29. The post also explains that
despite the struggles Abe has experienced thus far, he is committed to continuing
to fail and tackle new challenges going forward.

decisions that contribute to the social good.
Hiroshi Aoi

reputation, but not have the reasons to
see a commitment through to the end. Ifsuch a person with commitment andreasons teams up with an organizationthat shares that commitment and is able
to supply the resources, a mutually complementary relationship can be formed.
Abe: I believe that the ecosystem
offered by MARUI GROUP has an important role to play in combining a top-down
approach toward change with the act of
guiding overarching social trends byinspiring changes in the actions ofindividual consumers.
Aoi: MARUI GROUP can formulate
relatively accurate estimates regarding
the amount of cash that will be generated if we can convince a customer tosign up for an EPOS card, including theamount that will be generated on alifetime basis. As we are able to counton such funds, we can use this cash toboldly offer services entailing the type ofrisks that we would have had to avoid
previously. In this manner, we are able toexperiment with the resolution of social
issues thanks to this reliable cash backing.
Abe: That seems similar to how NPOs
offer individual donors the option to
make their donations via monthly credit
card payments. Right now, nobody really
views that as a form of credit. A change
in perspective, however, reveals thepotential for such donations to provide aframework for facilitating the funding ofNPOs’ activities.
Aoi: You have a point there.
Abe: When we look at the financial
services offered to address social issues
around the world, we will see that
options have been limited to small-sum
financing for supporting women.
However, if an NPO is used as an intermediary, it will lend an additional degreeof creditability, which can be used toexert leverage and mobilize greater
amounts of funds. If we can then create
frameworks that enable countries andprivate companies to support suchfunding, it could result in flows of fundsof exceptionally larger scales.

23

EVOLUTION INTO A COMPANY THATCONTRIBUTES TO THE RESOLUTION
OF SOCIAL ISSUES

I envision a framework in which, if a company wants to raise its value in thesocial economic sphere, the best way to do this would be to list on the TSE.
Toshiki Abe
Aoi: That is true. Activities require funding. If we can create such funding
frameworks, we will be able to direct
funds toward our desired impacts.
Abe: The ratio of consumer activity thatis directed toward social causes isprobably between 1% and 3%. If we
could raise the level to, say, 20%, andthen add to that around 20% or 30% of
the taxes generated via GDP, that would
make for a figure of more than 50%. This
would be the tipping point. In fact, economic frameworks themselves can be
crafted with social causes in mind, andthe creation of such frameworks would
fundamentally transform social systems
and values. From a business perspective, whether looking at consumers or at
the public-sector entities that support
those consumers, we will see thataround 50% of market participants feelthat the economy should be oriented
toward the social good.

Opportunity to Pursue Maturity
Instead of Growth Amid
Population Decline
Aoi: After struggling to enrich itself andstrengthen its army after the Meiji
Restoration, and then to catch up withthe rest of the world after World War II,
Japan found itself to be among the firstdeveloped nations to see its population
start to decline. An underlying principleof capitalism is that economies grow in
conjunction with the workforce, whichmeans a decline in population cantranslate to a halt to GDP growth. Even if
we try to maintain productivity using
robots and AI, we cannot expect to see
the economy grow, only mature. It is truethat success in maintaining productivity
levels in this manner might lead tohigher levels of per capita GDP. On theother hand, if we can move away from24

the emphasis on growth to pursue
greater maturity in the economy, as wasdone in the Edo period, Japan should be
able to create a completely new type ofsociety that is fueled by a drive different
from that of its peers.
Abe: I share your vision and want tomake it a reality. For this purpose, ourimmediate goal should be to transformthe values and economic incentives thatwill form the foundation for such asociety over the next decade or two.
Aoi: That is why I think that population
decline represents an opportunity. As the
population shrinks, we will be more andmore pressed to transition to an economy prefaced on maturity, as opposed
to growth. If we can reorient ourselves
toward this pursuit, I believe that we will
see some massive changes.
Abe: What is the scale of economic
impact of EPOS cards?
Aoi: The annual transaction volume for
EPOS cards is around ¥4 trillion. This
includes use for monthly rent, utility,
and insurance payments. I believe thatpeople vote with their wallet. When thescale of those votes reaches ¥4 trillion,
it means that we have connections tovarious aspects of people’s everyday
lives. It is for this reason that we are in
the process of developing an app thatdrives people unconsciously to makeconsumption decisions that contributeto the social good.
Abe: That is an intriguing idea. If people’s
consumption patterns change, so will
the votes they make with their wallets
in the public sphere. The votes people
make with their wallets represent an
expression of the issues they want
Japan to dedicate funds to, and thesevotes can thus shape government
subsidy programs. If people want renewable energy, we will see renewableenergy subsidies. If they want nuclear

power, that is where the money will go.
In the end, such programs will result inbusiness operators being able to provide
power to consumers at lower prices. In
this manner, connections with consumers can be used to inspire changes not
only in consumption patterns but also invalues. This in turn will lead to a cycle inwhich consumption patterns influence
public policy through votes, the consumption of political resources.
Aoi: I could not agree more. Even if wefeel dissatisfied with politics or government policy, complaining will not resultin any real change. Rather, a more exciting prospect is the idea to influencechange through a strategic approachthat targets a chain reaction transforming people’s thinking and social
structures.

Creation of a Social Market
Using Blockchain
Abe: I suspect that, at some point, weare going to see a change in how people
perceive market capitalization. It is myhope that this change is not just limited
to an individual company basis, butrather entails a transformation of thevery nature of equity markets. Ideally,
I would like to see the Tokyo Stock
Exchange (TSE) be the focal point forthis change. Basically, I envision aframework in which, if a company wants
to raise its value in the social economic
sphere, the best way to do this would be
to list on the TSE.
Aoi: That is an excellent strategy. On a
global scale, the TSE is currently losing
to exchanges in New York and London
and even to those in Asia. This meansthat how the TSE chooses to brand andposition itself will be of the utmost
importance going forward.
Abe: I think it would be prudent to carveout a space in the Japanese financial
market in which we can see an increasein the representation of socially minded
companies and to dedicate a substantial
amount of funds to this space. To behonest, I am not sure what my long-term
exit plan will be for Ridilover. Even if wewant to list the company, we will notsettle for listing on a market that does
not align with Ridilover’s vision. The best
way to resolve this issue would be for
the TSE to become a social market.
Aoi: MARUI GROUP’s partners are also
longing for such a market. I guess it is
up to you to make it!
Abe: We should do it together. Thatwould increase the incentive for people
to invest in social entrepreneurs via
MARUI GROUP. You are an early investor
in many companies and even have yourown fund. All we need is someone tosupport late adopters. Also, if we could
go beyond funds to provide a place forcompanies to be listed, that wouldchange everything.
Aoi: In that case, it would be best to
adopt an approach similar to that seenin Web3, in which those who are quick toinvest and maintain their investments
over the long term see greater returns. In
other words, it would be great if we saw
the emergence of a social market inwhich people are able to make good useof technologies like blockchain, whichallows users to maintain data bythemselves.
Abe: I think that comes down to what
you see to be the fundamental properties of blockchain technology. From afinancial perspective, blockchain issimilar to securities.
Aoi: Securities nowadays are complicated. However, if it were to become
possible for individuals to keep recordsof their transactions without the help of
a third party through reliable smart
contracts, returns could be more precisely distributed on an individual basis.
If Web3 has the potential to unlock suchpossibilities, I think that Web3 could
indeed be used to start up a securities
exchange.
Abe: I have been mining cryptocurrency
for the past three or four years exactly
because I want to do that. However, wehave to really think about when exactly
would be the best timing to introduce
such technologies into our business andhow to go about this.
Aoi: If we can accomplish our goals
without blockchain, there is no need togo out of our way to use it. I do want totry and make the type of market we havebeen talking about as an experiment,even if it is only small.
Abe: I think it will be NPOs, which don’t

face as many restrictions as securities,
that will be the first to see such amarket. Social projects have not been
expected to offer economic incentives
just by their nature. This is why it is likelythat a market for listing NPOs using
Web3 will probably be the first to
emerge. Smart contracts are also an
intriguing idea as they would have thepotential to transform society.
However, we have to recognize thatthe people affected by contemporary
issues lie outside of the inner circles ofthe economic sector. This is why it isimportant to think about how to design a
blockchain in a way that introduces suchpeople into those inner circles, and thisis not something that will be easy toaccomplish.
Aoi: You are quite correct.
Abe: The idea of returns going back to
the people who took the risks is an
important part of stimulating innovation.
For this perspective, it might be a goodidea to incorporate Web3 or perhaps
securities principles into social projects.
However, this will not change the needfor an exit strategy.
Aoi: That is something we also should
think about. I might have to do that as
my last act as manager.
Abe: I would love to see you do that, but
I would hate for it to be your last act.
25

Social Experiment 1

MARUI GROUP views innovation as more than just providing new products and services; it is a venture for resolvingsocial issues in such areas as climate change, energy, and economic inequality. The pursuit of such innovation is partof MARUI GROUP’s social experiment, which promises to propel society in a better direction. In this section, we will takea look at some aspects of this unprecedented social experiment.

26

27

SUSTAINABLE LIFESTYLES

low-waste throughout all steps of theprocess, from production to sales.

The fashion industry has long been
known to have a severe impact on the
global environment through its excessive production of both products andwaste. Meanwhile, our quest to realize
a sustainable society requires that weseek ways to minimize CO2 emissions,plastic waste, water consumption, andpollution from manufacturing.
At the same time, it is important toaddress the issues faced by customers.
For example, a survey administered by
MARUI GROUP asking customers about
what they sought from pumps returned
with numerous comments indicating adesire for pumps that offered the comfort of sneakers and that did not hurt towear. With a focus on the issues faced
both by the planet and by our customers, we created our Kesou brand ofpumps through the efforts of okos Co.,
Ltd., MARUI GROUP’s new businessdevelopment subsidiary.
A principal characteristic of Kesou
pumps is how the upper-layer fabricused in these shoes is knitted using
thread 100% made from recycled plastic
bottles, a feature that helps reduce
plastic waste. Materials for use in thesepumps are procured by collecting plastic
bottles at Kitasenju Marui. Moreover,Kesou pumps are produced on a madeto-order basis and also utilize a crowdfunding scheme as measures to prevent
excessive production and waste. In
addition, we endeavored to minimize theamount of materials used in the packaging to ensure that Kesou pumps are

Combination of Comfort andSustainability
Kesou pumps are shoes that offer the
comfort of a sock while boasting weighthalf that of the average sneaker, due tobeing knit from thread made from recycled plastic bottles, a feature that also
grants them an added element of sustainability. Over the roughly two-year
period of the development project, we
worked together with numerous customers, using their feedback to prototype andrefine even the most subtle elements ofthe shoes together with partnered manufacturers and designers. In August 2021,
the first Kesou pump was completed
through this process of co-creation withcustomers and other stakeholders.
However, customers do not only want
comfort; they also seek a wider range ofsize options. This is why the Kesou brandcontinued the tradition of MARUI GROUP’s
prior velikoko private brand by offering
sizes ranging from 19.5 cm to 27.0 cm inorder to allow every customer to find thepumps that best match their feet.
Inspired by the values espoused by the
Kesou production process, numerous
supporters took part in our crowdfunding
campaign, making Kesou pumps themost funded project ever in CAMPFIRE’s
pumps category. Going forward, we willcontinue to use Kesou pumps as a vessel
for proposing and encouraging newlifestyles based on its production story,
steeped in the resolution of issues facedby the planet and by customers.

VOICE

Minori Ito
Sustainable Business Section
okos Co., Ltd.

Shoe Innovations Made Possible
by Our Beginner’s MindAt okos, we are tasked with moving
beyond MARUI GROUP’s prior conventions to create new businesses, sometimes from scratch. Kesou pumps were
one such offering that we sought tocreate from scratch. This is why theteam comprised people with zeroexperience in making shoes, myself
included. As a team, we believed firmly in
our limitless possibilities, maintaining
our passion for sustainable production.
This passion also spread to our manufacturing partners, inspiring them to riseto the challenge of meeting our requests
and thereby broadening the scope of our
co-creation. The development of Kesou
pumps was made possible by the
motivation we felt driven by our beginner’s mind, unfettered by preconceptions
about how shoes should be made.

Information on the development of
Kesou pumps (in Japanese only)

SUSTAINABLE LIFESTYLES

Pumps Tackling Challenging
Fashion Issues

Online Connections with Customers
Formed through Kesou
In addition to the crowdfunding campaign and online sales, we provided aforum for customers to offer ideas forthe development project via Instagram.
This predominately online businessmodel presents the potential for deeper
and longer-lasting relationships thanbusiness models centered on stores.

KEY POINTSUpper-layer fabric (instep portion) made solely from recycled plastic bottles
Weight half that of average sneaker (Source: MARUI GROUP CO., LTD., September 2021)

A S U S TAI NABL E L OOKFASHION
28

Kesou is a brand of shoes crafted based on the desire of customers
for pumps that offer the comfort of sneakers and do not hurt towear. Sustainable production was another factor emphasized in thecreation of Kesou, making it a brand that addresses the issues facedby customers and by society.

Made-to-order production to prevent excessive production and waste
Selection of 16 sizes ranging from 19.5 cm to 27.0 cm
 ollection of aggregate total of 193,155 plastic bottles at Kitasenju MaruiC(as of November 30, 2022)

Official Kesou Instagram account(in Japanese only)29

KEY POINTS oal of sourcing 100% of electricity usedGat nationwide MARUI GROUP stores fromrenewable energy by 2030
 lans for in-house generation systems atP
use at eight facilities with annual generation capacity of approx. 10 million kWh onations of ¥1,000 to power producers
D
at time of application for a Minnadenryoku EPOS Card pprox. 500,000 users of MinnaA
denryoku’s services
 arget of reducing CO2 emissions byT
1 million tons by 2030

Goal of Sourcing 100% of Electricity
from Renewable Energy by 2030
MARUI GROUP has defined the target ofhelping to realize a carbon-neutral society as part of our efforts to co-create abrighter tomorrow for the future generations who will inhabit this planet. Basedon this target, we have set the goal ofsourcing 100% of the electricity we usefrom renewable energy by 2030.
On our path toward this goal, wepartnered with UPDATER, Inc. (formerly
Minna-denryoku, Inc.) in 2018 andstarted our transition to renewableenergy at our stores and other facilities.

To meet our electricity needs, we havesince explained our power supply network to encompass providers other than
UPDATER.
Furthermore, MARUI GROUP has two
solar power generation facilities, and weplan to increase this number to eight bySeptember 2024, a move that is projected to grant us a total annual generation capacity of approximately 10 million
kWh. Through such initiatives, we aim
to achieve our goal of sourcing 100%of electricity used at nationwide Maruiand Modi stores from renewable energy
by 2030.

Road Map to 100% Use of Renewable Energy

180 million kWh
150 million kWh

SUSTAINABLE LIFESTYLES

30

100%

Kenta Murayama

Renewable energy
usage rate
0%
FY2017(0 stores)

Non-renewable energy

Yurakucho Marui EPOS Card Center
Minna-denryoku Co-Creative Team
Epos Card Co., Ltd.

23%

FY2020(8 stores)

FY2023(18 stores, 7 facilities)

FY2026 (Target)(–)

FY2031 (Target)(All facilities)

Renewable energy

List of power producers associatedwith the Minna-denryoku EPOS Plan(in Japanese only)

preservation and reforestation activities
in Japan through the NPO Mirai no Mori.
In addition, when one pays their electricity fees for Minna-denryoku services
using their EPOS card, they are able toaccrue double the normal number of
EPOS points.* Furthermore, when a user
signs up for a Minna-denryoku EPOS
Card, ¥1,000 will be donated to a producer of renewable energy to contributeto the maintenance and development of
power plants.
Minna-denryoku also provides services through which donations of ¥100
are made each month to a power producer of choice as an expression ofusers’ support.
Through the promotion of eco-friendly
renewable energy services that benefit
customers, we aim to reduce CO2 emissions by 1 million tons by increasing thenumber of members under the Minnadenryoku EPOS Plan to 500,000. Steadyprogress is being made toward this goal.
* Double the amount of points for a single purchase ata standard Visa affiliate of one point for every ¥200
(including tax)

Desire to Improve Corporate Value
As I approach retirement in a couple ofyears, I find myself filled with a desire to
improve our corporate value by contributing to the resolution of social issues.
This drove me to think of how we could
use EPOS cards to promote decarbonization. Through this exploration, I arriveat the conclusion that our renewableenergy initiatives are something that is
made possible by everyone involved—
UPDATER, the co-creative team, andstore staff—being aligned along a single
vector. I was filled with joy when
UPDATER expressed that they loved
working with MARUI GROUP.

SUSTAINABLE LIFESTYLES

ENERGY

70%

68%

MARUI GROUP seeks to preserve apristine natural environment for future
generations. In working toward this goal,
we are encouraging customers to use
renewable frameworks and building
society-wide infrastructure to support
the transition to such energy.
As a co-creative initiative with
UPDATER, we launched the Minnadenryoku EPOS Plan, an electricity
service plan for EPOS cardholders, in
September 2020. Today, this plan isused by some 10,000 customers. Under
this plan, customers are able to choose
the power producer from which they
desire to purchase their electricity from
more than 800 producers across Japan
as part of a service that grants visibility
to the producers of renewable energy.
The producers from which customers
can choose include farmers and artists.
Moreover, 0.5% of the monthly electricity fees of Minna-denryoku EPOS
Plan users are donated to fund forest

MARUI GROUP is committed to using renewable energy so that wecan preserve a pristine global environment for future generations.
We are also helping customers use renewable energy through the
Minna-denryoku EPOS Plan, a plan that makes it easy for holdersof MARUI GROUP’s EPOS cards to switch to renewable energy.

150 million kWh
145 million kWh

Renewable Energy with Visibilityof Producers Offering Choice of
Desired Producer

R E N E WABLE A ND T RA CEA BL E

VOICE

Total electricity
consumption
200 million kWh

Yuki Yamaguchi
Department for Consumer
Sustainability Transition
UPDATER, Inc.

Expanded Scope of Partners for 
Promoting Renewable Energy
Through co-creation with MARUI GROUP,
we have been able to expand the scopeof our partners for promoting renewableenergy to a degree that we could nothave done alone. This has enabled us tohave an even greater impact on society.
A number of EPOS cardholders havestarted using our Minna-denryoku
services, and we have even seen suchindividuals attend events at the
UPDATER office because they wanted toknow more about us. These are people
that we would have never been able toconnect with if not for our relationshipwith MARUI GROUP. I look forward tocontinuing to evolve our services
together to inspire even more people totake action related to renewable energy.

Information on renewable energy withvisibility of producers (in Japanese only)

31

KEY POINTS
 apan’s first issuance of digital bonds
Jusing blockchain technology
Options offered to all EPOS cardholders
 ggregate of 9,812 applicants for easilyA
accessible bonds that can be purchasedwith as little as ¥10,000
 otal of ¥1.5 billion worth of financing
T
distributed to 33,000 peopleImprovement to the lives of financing
recipients and the building of assets forinvestors

Overseas Co-Creation of Creditability
MARUI GROUP’s decision to begin
issuing social bonds was inspired byour desire to use our assets to provide
financial services to people living overseas and to involve EPOS cardholders inthese efforts.
At MARUI GROUP, we have continued
to promote the co-creation of creditability
in Japan by helping customers in building
their financial credit. This led us to thedesire to engage in the co-creation of
creditability with low- and middle-income
individuals in countries outside of Japan.

However, we did not have any experiencein providing financial services overseas,
and many inside the Company expressed
concern for how challenging such anundertaking might be.
We would eventually find our path
toward offering financial services outside of Japan through our partnershipwith Gojo & Company, Inc., and CROWD
CREDIT, Inc., companies that had built a
track record in offering microfinanceservices overseas. Through co-creation
with these partners, we began the saleof digital social bonds in April 2022.
These digital social bonds were madepossible by a May 2020 revision of the
Financial Instruments and Exchange Act
of Japan. This revision allows for abusiness company to utilize blockchain
technology to sell digital bonds directly
to customers without the need to go
through a securities company. MARUIGROUP took advantage of this revision
to issue bonds directly to EPOS cardholders. Moreover, our digital bonds canbe purchased for small sums of money.
This accessible scheme allows any
cardholder with a desire to contributeto society to purchase these bonds.
MARUI GROUP’s digital bonds are thefirst instance in Japan of such bonds
being issued by a company that is nota financial institution.

Funding of Low-Income Individuals
through Social Bonds

FINANCIAL INCLUSION

Differences Between Traditional Corporate Bonds and Digital Bonds
Purchase

Traditional
corporatebonds

Underwriting

Securities
company

Sales

Issuance

Inability to identify purchaser

M I CR OF I NANC E

SOCIAL BONDS
Social bonds are bonds issued with the express purpose of gathering funds for use
in addressing social issues. MARUI GROUP is issuing social bonds, which it sells to
EPOS cardholders to allow them to invest in causes they support. Through a scheme
employing blockchain technology, we are helping EPOS cardholders contribute tosociety while building assets.
32

Purchase directly from MARUI GROUP

Digitalbonds

Blockchain

Ability to augment cash interest payments with EPOS points

MARUI GROUP’s official social bonds
website (in Japanese only)

VOICE

Sunita(member of family of five in her 50s)
Location: Uttar Pradesh, India
Occupation: Milk production and sales

Improvements to Life after Using 
Financing to Start Business
Before receiving financing, I was unable
to purchase cows to milk. Fortunately, I
was able to receive financing, as well as
business advice, which let me purchasecows to get my business off the ground.
I have since been able to use the revenue
generated by this business to renovate
my house and shop and to pay for myfamily’s living needs and my children’s
education. It is my hope that my children
will be able to find good jobs in the
future, so I plan to keep developing mybusiness so that I can provide them withwhat they need to get a good education.

FINANCIAL INCLUSION

Microfinance entails frameworks forproviding small-sum loans and otherfinancial services to individuals who
cannot obtain a bank account. MARUIGROUP’s social bonds constitute a
microfinance approach in that they aresold to EPOS cardholders to procure
funds for use in supporting the financial
independence of people living overseas.
Specifically, the funds collected in thismanner are used to provide financing to
low-income individuals in developing

countries through co-creation partners
Gojo & Company and CROWD CREDIT.
Bond purchasers receive a 1% annual
return on their investment through the
combined total of cash and point
returns. MARUI GROUP has floated threebond issuances to date, with a total
amount of approximately ¥400 million.
An aggregate total of nearly 10,000
EPOS cardholders applied to purchasethese bonds, which equated to ¥6.0
billion in funds.
Through this microfinance scheme,
we have already issued loans totaling¥1.5 billion (including amounts procured
via bonds issued to individual investors
through securities companies) toapproximately 33,000 individuals inemerging countries. These loans havebeen used to purchase saree looms,
cows to milk, and other items necessary
for starting businesses, thereby making
important contributions to improvements in the economic conditions andlives of financing recipients. Meanwhile,
individuals who have purchased oursocial bonds are provided with stories of
how their investments are being used tohelp people, which include messages
from the actual people being helped.
These stories provide a more tangible
understanding of the contributions one
is making to society.

Minami Kogure
Engagement Division
Financial Inclusion Co-Creative Teamtsumiki Co., Ltd.

Desire to Provide Financing to Even
More People
The greatest challenge in this m­ icrofinanceinitiative was finding a way to proceedwith this unprecedented undertaking. We
had to address various concerns andensure feasibility. This meant that we
had to spend a lot of time talking withthe relevant Group companies and with
our lawyers. These conversations werealways filled with technical terms, and, at
first, I had trouble even understanding
the points that were being brought up.
People who have received financing
through the scheme we created havementioned that the financing has put
their dreams within reach. I am so happy
to know that our efforts are actually
making a difference.

Employee reports on financing recipients(in Japanese only)

33

PROMOTION OF
EMBEDDED FINANCE
Transition from Installment Payments to Embedded Financethe so-called super apps, which combine a variety of functions
including payment, money transfers, and e-commerce. MARUIGROUP also provides such an app with its EPOS app, whichallows users to track their EPOS card usage while also offering
QR code payment services and applications for cumulative
investment, insurance, or even renewable energy plans.

Embedded finance is a term that refers to services provided by
non-financial companies that embed elements of financial
services into more traditional services.
Retailing, IT, and other non-financial businesses that are inconsistent contact with consumers are able to gain information
on and trust from customers. This close proximity to customers
creates situations in which customers may desire to purchasean item in the moment but not have the cash on hand to do so.
If a retailer can provide options to pay later for purchases aspart of its services, it is highly likely that a customer will make apurchase in such a situation. This is why we have recently been
seeing a rise in non-financial companies providing embedded
financial services that incorporate apps including payment
systems supplied by banks or fintech companies.
MARUI GROUP sets itself apart from its peers by being acompany that possesses both non-financial retailing functions
as well as fintech functions in the form of the credit and payment services offered by its EPOS cards. We also possessrobust in-house systems development functions, which are asignificant source of strength in that they enable us to swiftlyincorporate financial systems into our services. Another factor
behind the recent popularization of embedded finance has been

Embedded Finance Scheme

It could be said that MARUI GROUP has been providing embedded financial services since its inception. We got our start inselling furniture on installment plans. In other words, we
embedded the financial service of installment payments into
the retailing service of furniture sales.
In the past, installment payments were primarily used fordurable goods like furniture. As the times changed, however, thescope of products for which such services are used expanded
to include apparel and eventually all of the products we consume as part of our daily lives. MARUI GROUP’s business too
has continued to evolve together with the times, while remaining true to its business model of combining finance and retailing. A particularly noteworthy step in this evolution came withthe 2006 launch of the EPOS card, a card affiliated with theinternational brand of Visa Inc. This card can be used for applications other than shopping at Marui and Modi stores, making

it a more central component of customer lifestyles and driving
consistent growth in transaction volumes.
Even if the products we offer change, the underlying assets
used to offer these products remain the same. It is these assetsthat allow MARUI GROUP to take an embedded financeapproach. These assets were used to provide products that are
ideal for installment payments, like furniture and other durable
goods as well as apparel, and are now employed to offer services ranging from dental payment plans, small-sum securities
investments, and rent guarantees. Similarly, the multipurpose
EPOS card can be used anywhere and at any time, not just to
make payments in stores.
MARUI GROUP is passionate about continuing to generateprime examples of embedded finance by utilizing its assets,
namely, systems that incorporate EPOS cards to allow customers
to use their card on any occasion when they might want to makea payment. At the same time, we will seek to generate our desired
impact based on the themes of creating a brighter tomorrow for
future generations and contributing to individual happiness.

Consumers

Non-Financial Company
Provision of services with embedded financial elements

Fintech Company
Investment

Payment

Insurance

Financing

EPOS Cards

Driver License Acquisition Financing PlanThrough affiliation with the international Visa brand, MARUI GROUP isable to offer multipurpose EPOS cards that can be used for a much wider
range of applications than its prior in-house cards, which were limited touse in our stores. EPOS cards are seeing consistent growth in transaction
amounts and are therefore expected to continue to function as a cornerstone of our embedded finance initiatives.

The driver license acquisition financing plan of Epos Card Co., Ltd., is aservice offered through partnership with driving schools that can be used
when one is signing up for courses at such schools. Designed for customers seeking to obtain a license as quickly as possible, we allow
customers to pay their driving school fees, which can be quite high inJapan, at their own pace in as many as 36 installments.

EPOS card application via EPOS Net (in Japanese only)

FINANCIAL INCLUSIONFINANCIAL INCLUSION

Embedded Finance

Evolution from Furniture Installments to
EPOS Cards and Beyond

Driving schools accepting driver license acquisition financing plan offeredthrough EPOS cards (in Japanese only)

MARUI GROUP’s Growing Range of Embedded Financial Services

Installment program for purchasing Apple Inc. products(see pages 38–39)
EPOS Dental Credit (see pages 40–41)
tsumiki cumulative investment services
EPOS Card Insurance
ROOM iD rent guarantee service (see pages 36–37)
Driver license acquisition financing plan offered through EPOS cards
Issuance of EPOS cards

EPOS Card Insurance

tsumiki Co., Ltd.

Through EPOS Card Insurance, we help EPOS cardholders choose theinsurance plans that best match their needs with a wide range of health,illness (cancer), and other insurance plans offered exclusively to cardholders that serve to alleviate everyday concerns. Moreover, when one
pays their premiums with their EPOS card, they are able to accrue EPOS
points, which can also be used to make premium payments.

Established in 2018, tsumiki Co., Ltd., offers Japan’s first cumulative
investment service that allows for payments via credit cards. This service
makes it possible to conduct cumulative investments using one’s EPOS
card and to allocate accrued EPOS points toward steady, gradual asset
building. The service of tsumiki was also the first in the industry to allow
for monthly investments of ¥100,000 under Japan’s new NISA savings
account scheme.

Issuance of Japan’s first credit card
Founding business of selling furniture on installment payments

34

Insurance and other available plans (in Japanese only)

Forward-looking options for asset building (in Japanese only)

35

KEY POINTSRent guarantee services in which Epos
Card acts as a guarantor
 creening offered regardless of age,S
occupation, or income
 ayments to landlords and collection ofP
overdue rent handled by Epos Card

Housing is an essential part of oureveryday lives. However, a 2020 revision
to Japan’s Civil Code imposed harsher
conditions on guarantors. As a result,
there are now cases in which a retired
parent might not be able to become
the guarantor for their own child. This
reality is driving a rapid increase in theuse of rent guarantee services in whicha guarantor company will pay rent onbehalf of an individual should they beunable to make their own rent payments.
Quick to detect this social issue,
MARUI GROUP launched ROOM iD, arent guarantee service offered through
EPOS cards, in 2008. Today, we hold ahigh share of the market for rent guarantee services, with more than 720,000
ROOM iD users.
Epos Card operates by calling on
our unique credit expertise, which hasenabled us to maintain a low ratio ofdelinquent debt of 1.61% and is a clear
point of differentiation from competitors.
This expertise is founded on our corevalue—the co-creation of creditability.
Based on this value, we emphasize
helping customers build their credit
through their use history, rather thanmaking judgments purely based on
preliminary information like their age,occupation, or income. We are therefore
able to provide screenings to students,
who still have low income, and to elderly
individuals.

VOICE

Yurika Konda
Development Section, Development Division,
Home Business Department
Epos Card Co., Ltd.

Customer Service Experience as a

Utilization of AccumulatedExperience and Insight
The genesis of our rent guarantee services can be traced back to a decision
to reorganize a certain subsidiary. Thissubsidiary was primarily a loan company
and the decision, which was made inlight of the impending 2006 revisionof the Money Lending Business Act,
resulted in closing this company’s officeand transferring its operations to Epos
Card. Following this decision, we soughta means of utilizing the experience andinsight the employees of this subsidiary
had accumulated thus far to create a
new business, moved by the strong
desire of these employees not to see
these assets be discarded.
We found our answer in 2007, when an
officer proposed what would later evolve
into our rent guarantee service at aninternal new business contest. This proposal won a lot of praise within the
Company due to its foresight and ability
to capitalize on our strengths. MARUIGROUP thus went on to launch its ROOMiD rent guarantee service in 2008.

The launch of this service revealed
other yet unseen strengths of MARUIGROUP. These were the high levels ofcustomer service and hospitality fostered through our retailing operations.
The listening skills that helped us gain
an understanding of customer needs
and the communication skills thatenabled us to deliver quality gave rise tovarious services and drove their evolution.
Our rent guarantee services are thus
a tool for resolving social issues while
utilizing the assets of our finance andretailing operations. Today, our lineupof rent guarantee services includes the
ROOM iD Global Plan for non-Japanese
residents of Japan as well as plans foroffices and other commercial tenants.
On our quest to create a society in which
everyone is able to rent a place to live,
we are targeting rent guarantee service
transactions of more than ¥1 trillion, amarket share of more than 10%, and theNo. 1 position in the industry, to beachieved by the fiscal year ending March
31, 2026.

Rent Guarantee Service Business ModelA H O M E F OR EVERYONE

RENT GUARANTEESThe ROOM iD rent guarantee service offered by Epos Card Co., Ltd., is a viable option when someone is unable
to find a guarantor when signing a rental contract, which is a significant possibility given that there are evencases when a retired parent might not be able to become the guarantor for their own child. Such rent guarantee services are becoming an important piece of social infrastructure, and we aim to expand the use of ROOM
iD to create a society in which everyone is able to rent a place to live.
36

Epos Card Co., Ltd.
Rent Guarantee Contract

Rental Contract
TenantComments from Real Estate Managers(Landlords)

Epos Card’s unique screening
criteria are impressive.

Epos Card returns screening
results much faster than othercompanies, which is a big help.

Credit Payments for Rent andGuarantee Fees

Guarantee Contract
Advance Payment Contract

Powerful Tool for Sales Activities
My involvement in rent guarantee
services gave me my first experience
with business-to-business operations.
The approach toward sales, as well as
whom we were approaching, was muchdifferent from when I was working instores. Nevertheless, I felt motivatedfrom having my proposals accepted,
especially when it led to a major partnership. The customer service experienceI gained at stores is proving to be a
powerful tool for such sales activities.
I also get satisfaction from hearing that
customers want to use ROOM iD rent
guarantee service again should they
move and from knowing that I am
helping them. It was tough learning
about the real estate industry, somethingthat was completely new to me. Right
now, however, I am working to get realestate broker accreditation so that I canapproach business negotiations fromthe same perspective as our partners.
I am determined to hone my sales skills
to become the best in the industry.

FINANCIAL INCLUSIONFINANCIAL INCLUSION redit expertise maintaining a low ratio ofCdelinquent debt of 1.61%

Parents Unable to Become
Guarantors

Tenants love how ROOM iD lets
them earn points and prevents
them from forgetting rent
payments.

Information on ROOM iD(in Japanese only)
Real Estate Manager (Landlord)

37

KEY POINTS
 apan-first academic-sector individualJfinancing program
 ervice reflecting high residual value of
SApple terminals
 pos Card’s first residual value-deductedE
credit scheme
Combination of retailing andfinance assets
 arget of 100,000 users over the nextTfive years
 ducational support for youngerE
generations

Japan-First Finance Program for
Providing Educational Support
In recent years, we have seen the rapid
embrace of digital technologies by
educational institutions. As a result, it is
now imperative that every student havetheir own terminal. Meanwhile, the rising
prices of such terminals is placing an
increasingly large financial burden on
students and their families. MARUIGROUP offers a financing program thathelps individuals purchase Apple terminals for use in their studies. This is Epos
Card’s first program to utilize a residual

value-deducted credit scheme. Based on
the assumption that the terminal will be
returned after the usage period, thisprogram allows users to obtain Apple
terminals at a price determined bydeducting the projected residual value of
said terminal. This reduced price is paidin installments, resulting in a lower
monthly burden.
Through co-creation with Too
Corporation and AUCNET INC., partners
with experience buying and selling Apple
products, we developed a framework forcomprehensive support for processes
including guarantee of Apple products

Scheme for Limiting Payment Amounts
Amount not paid
due to return of terminal

Amount of
one-time cash
payment

Amount paid
through financing
program

Program users are able to limit their payments by returning their terminal after a predetermined usage period.

FINANCIAL INCLUSION

38This financing program was a product of
MARUI GROUP’s corporate culture of
tackling new challenges based on customer needs.
In crafting this program, we focusedon providing payment options that offer

significant benefits to members ofyounger generations and their families.
In doing so, we abandoned industry
conventions to set appropriate interest
rate levels based on customer needs
while also developing new applicationand screening methods designed tomake this program accessible to as
many individuals as possible. As a result,partners have stated that they are able
to recommend this carefully crafted
program with confidence. Looking
ahead, we have set the target of having
this program used by an aggregate totalof more than 100,000 people over the
next five years.
Over the long term, we hope to maintain lasting relationships with the newcustomers gained through this program
by encouraging them to use EPOS cards
or other services. MARUI GROUP understands that future generations, or in thiscase, younger generations, are an important group of stakeholders. By supporting the passion of members of thesegenerations to learn, we hope to achieveearnings growth while generating ourdesired impact.

Developing Epos Card’s first residual
value-deducted credit scheme was noteasy, nor was forming the frameworks
for implementing this scheme together
with business partners. Nevertheless, I
am glad that we were able to overcome
these challenges to create a program foraddressing social issues in the education field. This process exposed me tosocial needs that I was previously
unaware of and made me think about
just how many social issues might begoing ignored. This newfound outlook
has committed me to identifying theunresolved issues faced by customers
and using MARUI GROUP’s strengths totackle them.

FINANCIAL INCLUSION

It is not uncommon for students and their parents to be troubled by the unexpectedly highcosts of the terminals one needs to purchase for school. To help aid people struggling toafford such items, MARUI GROUP launched an installment program that can be used inpurchasing Apple Inc. products in February 2023 as a Japan-first academic-sector individual
financing program.

Sayoko Umehara
Project F Business Planning Department
Epos Card Co., Ltd.

MARUI GROUP’s Strengths

Program Crafted Based on
Customer Needs

STUDENT SUPPORT

Installment payments

Tackling of Issues with

and distribution of repurchased terminals.
As an added benefit, the process of
Epos Card staff members visiting
schools to explain our program directly toparents helped us build stronger relationships with schools. We have seen apositive response for schools that haveadopted this program, which has
included their mentioning how the program had made it easier to propose waysof acquiring terminals by providing
options that better matched the paymentrelated circumstances of specific households. Users of this program have also
had praise for the program, with somestating how it helped them limit the initialcost of entering a new school through themonthly installment scheme.

I N C LU S I VE E DUCA T ION

VOICEYosuke Suzuki
Apple Business Development Department
Too Corporation

Shared Aspirations and Services
MARUI GROUP’s desire to support thepassion toward education of members ofyounger generations is aligned with ourcommitment to supporting the creativityof all students in the market for education. It was these shared aspirations thatinspired us to embark on this partnership.
Schools are attended by children from awide range of families, and there arethose for whom the price hurdle forpurchasing terminals is quite high.
The program we took part in organizing
lowers the hurdle to obtaining Apple
products by reducing the initial costs
and thus the burden placed on customers. I am confident that this program willcontribute to the resolution of social
issues faced in the education field.

39

KEY POINTS■ Service for users age 18 or above■ Applicable to insurance-approved
treatments■ Fees lower than those for standard credit
card installment payments■ Easy application via smartphone in as
little as 15 minutes■ Nationwide sales network including
MARUI GROUP’s reemployment support
provisions users■ Meticulous sales approach based onretailing experience

Protection of Teeth to Contribute to
Better Overall HealthAround ¥3 trillion is spent on dental
procedures every year in Japan, and alarge portion of this amount is associatedwith straightening, implants, and otherprocedures that are not covered by healthinsurance programs. The high price ofsuch procedures has caused hesitation
among many individuals, even those witha desire to undergo these procedures.
We recognized that the business of
Epos Card is well suited to addressing theneeds of customers with a desire toundergo dental treatments who find thehigh prices prohibitive. This was the startof the EPOS Dental Credit plan. Under thisplan, customers can receive financing of
up to ¥2 million for all of their dental

procedures (except whitening), regardless of insurance program coverage.
Installment payment fees in this program
are only 5.8%, less than the fees forstandard credit card installment payment.
Moreover, we offer easy application via
smartphone, with the process fromapplication to receipt of screening results
being completed in as little as 15 minutes. This makes the EPOS Dental Credit
plan especially appealing as customers
can start using the plan on the day they
have their dental examination.
The number of dental clinics acrossJapan is around 70,000, which is greaterthan the number of convenience stores.
Over the less than two years since thelaunch of the EPOS Dental Credit plan,
the number of clinics at which thisservice is accepted has risen above

Breakdown of Desired Payment
Schemes for Dental Procedures
Cash 7%

One-time credit

Installments

60%

card payment(dependent onamount)25%

Installments

8%

1,400, and transactions through this plan
climbed to ¥750 million in the six-month
period ended September 30, 2023.

Rapid Growth Driven by Users ofReemployment Support Provisions

FINANCIAL INCLUSION

NE W PAYM E NT OPT ION

DENTAL SUPPORTOne in three people have a desire to pay for dental procedures in installments. Seeking
to provide such a payment option, we launched the EPOS Dental Credit plan in thesummer of 2021. This plan makes it easier for people to undergo straightening,
implants, and other expensive dental procedures.
40

VOICE

Yukio Inamoto
Credit Sales Section, Fintech Sales Division
Fintech Business Department
Epos Card Co., Ltd.

Appeal of Ability to Gain Helpful Advice through TeamworkI joined MARUI GROUP in 1983, and I
have primarily been involved in retailingover the years. During the course of mywork, I have internalized our commitment to results and our culture ofhealthy teamwork. These traits havemade it possible for our team to sharethe ideas born out of various failures,without being preoccupied with distinctions like whether someone is full time orusing MARUI GROUP’s reemployment
support provisions. This teamwork iswhat has enabled us to get the EPOS
Dental Credit plan accepted by 1,400
dental clinics. Everyone at MARUIGROUP has their own background andinsight, and the ability to learn about new
perspectives, make new discoveries, andgain new helpful advice through one’s
day-to-day work is a major appeal of theCompany. In the future, I hope to continue to offer advice and aid based on
my experience to those around me while
also taking action myself.

FINANCIAL INCLUSION

The rapid growth of the EPOS Dental
Credit plan has been driven by theefforts of highly energized users of
MARUI GROUP’s reemployment support
provisions. In fact, this program wasbased on an idea born out of the process of seeking ways to utilize the credit
and systems development insightgained through the operation of Epos
Card’s driver license acquisition financing plan, a service that has earned theNo. 1 share of its market and represents
our first embedded finance initiative.
Today, our nationwide sales network for
the EPOS Dental Credit plan is supported
by 18 users of MARUI GROUP’s reemployment support provisions and theinsight and communication skills they
honed through retailing.
Including MARUI GROUP’s reemployment support provisions users, the sales

team consists of a total of 50 diverse
members. All of these individuals had no
prior experience in the medical field, andthis fresh perspective allowed them toshare examples and ideas and takeaction without concern for differences inseniority. The ability to share their experience of taking part in such trial-and-error
processes with younger employees is
one source of motivation for users of
MARUI GROUP’s reemployment support
provisions.
In August 2023, some of these reemployment support provisions users wererecognized in the Breakthrough Award
program, an internal award program forhonoring people and initiatives that havecontributed to improved corporate value
for MARUI GROUP.
Moreover, dentists have praised thesales approach of such individuals,
which was shaped by their experience ofcatering to customer needs at retailstores. Examples of their meticulous
sales approach have included thorough,face-to-face explanations to dentists
and assistance in formulating methodsof proposing the EPOS Dental Credit
plan to customers through means suchas the preparation of displays andproposal tools. This approach has
proved to be a powerful asset in thisbusiness-to-business-to-consumer
endeavor.
To ensure that customers can use theEPOS Dental Credit plan at as many
dental clinics as possible and to help
support people’s health, we have set thegoal of making the plan usable at 5,000
clinics and to generate transactions of¥10.0 billion through the plan in thefiscal year ending March 31, 2026.

Comments from Dentists Accepting
the EPOS Dental Credit Plan
I am able to suggest the EPOS
Dental Credit plan to patients withease knowing that Epos Card willoffer meticulous support.
Sales representatives come totalk in person, which gives me
peace of mind and makes it
easier to ask questions.
My patients have mentioned how
the option to pay for expensive
straightening procedures ininstallments helped them makethe decision to start treatment.

Reemployment support provisions users
who are members of the EPOS Dental
Credit plan sales teamInformation on the EPOS Dental
Credit plan (in Japanese only)

41

SUPPORT FOR­INDIVIDUALS IN­PURSUING THEIR
INTERESTS

Lifetime Value of Different EPOS Card Types

Twofold tosevenfoldincrease©2023 HERALBONY Co., Ltd.

Chiikawa EPOS Card©nagano / chiikawa committeeStandard EPOS cards

42

Supporting individuals in pursuing their interests has been
defined as a priority measure for MARUI GROUP’s impact
targets. MARUI GROUP is committed to supporting stakeholders in pursuing their individual interests. For this reason, we areundertaking a variety of projects, through EPOS cards, in-store
events, and other venues, to support the diverse passions andvalues of individuals.
This commitment to individual interests is founded on theimportance of one’s interests toward heightening feelings ofindividual empowerment as well as the fact that our interests
are a source of happiness, an emotional safe haven in which

we can be ourselves. If we want to empower people, physically,
mentally, and socially, we must abandon prior restrictions
imposed on people’s interests to create a society in which
everyone is respectful of each other’s interests.
A core element of businesses supporting individual interests
is MARUI GROUP’s credit cards that allow individuals to engage
with their interests. These cards include collaboration cards
with anime or manga works, video games, or musicians. Highapplication numbers have been seen for such collaboration
cards, which tend to have levels of lifetime value that are two toseven times greater than that of standard EPOS cards.
Collaboration cards have been developed based on proposals from a wide range of employees, including those in fintech

Diverse Support for the Diverse Interests of Individuals
K-POP MARUI GROUP is supporting K-POP
fans through a variety of initiatives,
including pop-up events related to
K-POP and the running of fan clubs for
new artists. Our first official TikTokaccount, which was set up in June
2022, was also done for the purpose of
supporting K-POP fans.

Anime The Anime Business Department was
set up at MARUI CO., LTD., in 2016, andis staffed primarily by anime-loving
employees. Since establishing thisdepartment, we have proceeded toarrange multiple events and issue EPOS
cards based on customers’ interests.
Recently, we have even been partneringwith YouTubers and VTubers.

Korean Cosmetics 
In 2021, we opened our KOREAJU
Korean cosmetic boutique shop. WithKOREAJU, MARUI GROUP seeks toprovide a venue through which cus­
tomers can learn about new Koreancosmetic items via the KOREAJU
e-commerce site, in-store events,and social media.

Gaming 
MARUI GROUP has practiced cocreation with Mirrativ since March
2023. Mirrativ is one of Japan’s largest
video game streaming platforms interms of streamers of smartphonegames. Specifically, we offer the
Mirrativ EPOS Card to support Mirrativ
streamers and hold pop-up events.

EVANGELION EPOS Card©

EPOS cards that support individual interests

divisions as well as in retailing and co-creative investmentrelated divisions, leading to the creation of some 60 collaboration cards (as of September 30, 2023). A number of these cards
have been developed by employees pursuing their own individual interests, and the ability to make one’s passion one’s
work in this manner has made collaboration card development
a highly motivating task for employees.

Incorporation of Altruism into Credit Card Frameworks
MARUI GROUP has recently been expanding its range of EPOS
cards that allow users to make contributions to society.
Examples of these cards include the HERALBONY Card, whichlinks card use to donations to artists who have disabilities, andthe Tokubigumi EPOS Card, which provides donations to the
Tokugawa Art Museum.
Such credit cards that support individual interests whileallowing users to contribute to society invite users to movebeyond self-interest pursuits of one’s passions and take analtruistic approach of gaining happiness by making others
happy. This approach translates to selfless acts directed toward
the object of one’s passion. By incorporating such altruism or
selfless acts, which are often cited as the motivating force
behind donations in cultural anthropology terms, into credit
card frameworks, MARUI GROUP aims to create new markets
while shaping people’s values.
MARUI GROUP is turning its attention to the potential ofleveraging altruism to transform a capitalistic economy, inwhich buyers and sellers are only able to connect through thetrading of money and goods, into a gift economy. There is still alot of potential to support individual interests, and the desired
impacts of our initiatives toward achieving this end are something that can only be generated through co-creation withstakeholders.

Comments at Strategy Committee Meetings
Pertaining to EPOS Cards Supporting
Individual Interests

Since we began offering EPOS cards that support
individual interests, development has not been a task
limited to specific individuals. Of course, Epos Card
will look at things like compliance but we are letting
anyone take part in developing a card based on
individual interests, and we are seeing this donein all sorts of divisions. (Yoshinori Saito)

EPOS cards that support individual interests are a
textbook example of a marketing pull. There is noneed for a push. Fans will even do the work of
spreading the message by themselves. Also, suchcards feature high lifetime value. If we can think ofways to encourage customers to use their cards
more frequently as their primary credit card, we can
expect even higher lifetime value. (Hiroshi Aoi)

SUPPORT FOR INDIVIDUAL INTERESTSSUPPORT FOR INDIVIDUAL INTERESTS

Background of Support for Individual Interests

HERALBONY Card

In the past, credit cards have purely been sterile toolsof function. However, MARUI GROUP’s approach oftransforming these cards into something thatsignifies membership into a given fan community has
allowed cards to evolve past their function to provide
an aesthetic pleasure. (Yasunori Nakagami)

43

KEY POINTS■ Full utilization of MARUI GROUP assets
in projects combining EPOS cards,
e-commerce, and store events■ Direct promotions targeting artist’s fans

MARUI GROUP has defined support forindividuals in pursuing their interests asa priority measure for its impact targets.
Our approach toward offering this support goes beyond the interests of customers to also mobilize the interests ofour employees, which has led to thecreation of new businesses in various
divisions. People’s interests can include

artists or anime or video game characters. Moreover, one’s interests, which areoften seen as a personal matter, canalso have the power or the potential
to significantly impact society.
The ZUTOMAYO EPOS Card, whichfeatures a design inspired by the popular
band ZUTOMAYO, was developed following a proposal by a music-loving
employee in the E-Commerce Business
Department of MARUI CO., LTD. By
assessing their own feelings with regard

Other Collaboration Cards Developed by the E-Commerce Business Department

Tokubigumi EPOS Card

Kyusonekokami EPOS Card

The Tokubigumi EPOS Card is a collaboration card with theTokugawa Art Museum that features the museum’s six
katana sword logo, which is popular among sword fans.
Donations of ¥1,000 are made for each new application for
a Tokubigumi EPOS Card, and cardholders may choose to
make donations using their EPOS points in amounts of ¥1
per point. We also arrange Tokubigumi Festival in-store
events together with the Tokugawa Art Museum and sellrelated merchandise via our e-commerce sites.

The Kyusonekokami EPOS Card is a collaboration cardwith Kyusonekokami, a rock band that has fostered abase of hardcore fans with its unique aesthetic. The
mouse character that acts as the band’s trademark
prominently adorns this card. We also offered, via our
e-commerce sites, a Kyusonekokami merchandise bundle
commemorating the launch of this card that contained a
T-shirt, a postcard featuring messages from the band
members, and three other items.

to artists, this individual realized that
there had to be a lot of people whowanted a way to feel connected to theirfavorite artists aside from going toconcerts and listening to their songs.
For the project team, we recruited
fans of ZUTOMAYO from within the
Company. The perspective of thesepassionate fans was used to craft
designs for collaboration merchandise,card application bonuses, and promotions that would seize the hearts ofhardcore fans. These efforts clearlyresonated with ZUTOMAYO fans.
The ZUTOMAYO EPOS Card isadorned with a design produced byanimator Hanabushi from ZUTOMAYOCARD -THE BATTLE BEGINS-, the official
ZUTOMAYO trading card game. This
card proved to be a highly desirable item
for fans and, thanks in part to various
collaborative events, the ZUTOMAYOEPOS Card set a new record for thenumber of first-day card applications.

changed when we defined our support
for individuals to pursue their interests
as a priority measure for our impact
targets. This opened the door for
employees of all organizations to thinkup services for supporting individualinterests and to develop cards.
The ZUTOMAYO EPOS Card is the third
collaboration card proposed by the
E-Commerce Business Department of
MARUI CO., LTD. All three cards that cameout of this department have been accompanied by e-commerce promotions as wellas in-store events, thereby succeeding in
attracting new cardholders.
We also offer a number of otherpopular EPOS collaboration cards that
support individuals in pursuing theirinterests (see pages 48 and 49). A
shared characteristic of these cards ishow, rather than MARUI GROUP creatinga new character or brand, we capitalizedon the emotional ties of existing
communities.
The ZUTOMAYO EPOS Card is a primeexample of a mutually beneficial businessventure for sharing happiness advancedby an artist, customers who are fans ofsaid artist, and MARUI GROUP.

Option for Anyone to Develop a Card

CO LLABO R ATION CA RD

ARTIST PARTNERSHIPSMARUI GROUP has continued to support individuals in pursuing their interests throughmeans such as the provision of EPOS collaboration cards, exclusive collaboration
merchandise, and in-store pop-up events that seize the hearts of fans. Such collaboration has included the ZUTOMARUI event that was arranged as a celebration of the fifth
anniversary of ZUTOMAYO, a band with a large following among Generation Z.
44

In the past, our collaboration cards haveprimarily been developed by a limited
range of organizations. However, this all

VOICE

Hisano Kidokoro
Business Planning Section,
E-Commerce Business Department
MARUI CO., LTD.

Synergies Generated by Supporting 
Individual Interests
The COVID-19 pandemic put a stop to
events like concerts. Robbed of thisopportunity for connecting with myfavorite artists, I sought new avenues for
feeling this connection. This made me
start thinking about what MARUI GROUP
could do to help music fans from facing
a similar predicament, which led to thestart of this project. The response from
customers mirrored my feelings exactly,
and this filled me with joy. When the
manufacturer posted information on thecollaborative merchandise production
process, fans were quick to spread thenews. This really opened my eyes to thesynergies that can be generated by
supporting individual interests.

Comments from ZUTOMAYO Fans
I was thrilled that my first credit
card featured ZUTOMAYO!

SUPPORT FOR INDIVIDUAL INTERESTSSUPPORT FOR INDIVIDUAL INTERESTS■ Project team members assembled
through recruitment employees who arefans of artist

Linking of Employee Interests with
Customer Interests

I am so happy that something
I use every day can also symbolize
my connection with ZUTOMAYO.

I’m definitely applying for a
ZUTOMAYO EPOS Card once
I finish high school.

Information on MARUI GROUP’s
efforts to support individuals in
pursuing their interests(in Japanese only)45Creation of a Truly Inclusive Society

SUPPORT FOR INDIVIDUAL INTERESTS

Credit Card That Is Also a Work of Art
There is a limit to the extent to which
we can encourage people to use the
HERALBONY Card purely by promoting
its social contributions. Given the wide
range of options for donating to social
causes, there is no real need to makeone’s social contributions through acredit card.
Nevertheless, the HERALBONY Cardis able to provide an appealing option byoffering its own unique value as an art
product or, in other words, a credit cardthat is also a work of art. The sensibilities of the type of person who will enjoy
a card of this nature is related to thepriority measure of supporting thepersonalities of individuals as defined as
one of our impact targets 2.0. Thisfeature, combined with the additional
benefit of helping people with disabilities
achieve independence, makes the
HERALBONY Card a viable option for
guiding society in a positive direction.
Aggregate transactions through the
HERALBONY Card amounted to ¥900
million on March 31, 2023, and the total
number of cards issued has surpassed
8,000. The HERALBONY Card transcends the numerical values of pointand cash returns to propose a new formof value for the credit card seen throughthe intersection of art and social contributions, and the number of people who
embrace this value continues toincrease.

AR T AND S O CIA L WEL FA REHERALBONYHERALBONY Co., Ltd., is a company that has declared its intent to act as a social experiment in the area of social welfare. Specifically, this company aspires to create a new
culture centered on the art of artists with disabilities. MARUI GROUP has been engaged inco-creation with HERALBONY since the fall of 2021. By combining the strengths of ourrespective businesses, we are working to create a more inclusive society.

46

VOICE

KEY POINTS■ Credit card proposing new value at intersection of art and social contributions■ Donations made to HERALBONY of ¥1,000 at time of application and using EPOS points
accrued in an amount equivalent to 0.1% of purchase amounts thereafter■ Support for independence of artists with disabilities■ Swift co-creation made possible by card issuance assets■ Option to choose from eight designs (as of November 30, 2023)

Emi Sagayama
Account Department
HERALBONY Co., Ltd.

Clear View of Fans
Since the launch of the HERALBONY
Card, I have noticed synergies being
created with HERALBONY’s consumeroriented businesses. MARUI GROUP has
a valuable asset in the form of its EPOS
cards, and the opportunity to entrustthem with the development of the related
frameworks and systems was incredibly
appealing. I am very grateful that wewere given this opportunity. One of thedraws of art comes from how the artists
use it as an expression of their own
passions. I am so happy of how the
HERALBONY Card has given us sucha clear view of the fans who support
our efforts.

Comments from Customers on the
Appeal of the HERALBONY Card
I get all excited just by looking at
its incredible design.

SUPPORT FOR INDIVIDUAL INTERESTS

Established by brothers Takaya andFumito Matsuda in 2018, HERALBONY is acompany that forms art licensing agreements with artists who happen to havedisabilities. To date, this company has
developed products based on data from
more than 2,000 works of art. These
works have been used for a wide variety of
applications, ranging from product packages and apparel items to hotel room
interiors and building walls. HERALBONY
is motivated by its mission of unleashingdistinctive designs to transform the imageof people with disabilities. By displaying
the unique expressions of individual artists
in public spaces, HERALBONY proposes apath toward the creation of a truly inclusive society.
In February 2021, HERALBONY participated in Marui Co-Creation Pitch, a program for soliciting ideas for co-creative
ventures with MARUI GROUP, where thecompany claimed the grand prize as wellas the audience prize. Its award-winningproposal was for a scheme of donating a
portion of the points accrued throughcredit card use to social welfare organizations. Employees inspired by the ideals of
this proposal participated in the cocreation process, which culminated in theissuance of the HERALBONY Card inNovember 2021. When one signs up for a
HERALBONY Card, a donation of ¥1,000
is made to HERALBONY, and subsequent
donations are made using EPOS points
accrued in an amount equivalent to 0.1%
of purchase amounts. Through
HERALBONY, these donations are used tofund the creative activities of artists andthe promotion of their works and to
donate to social welfare organizations.

It is great how the card letsanyone contribute to society.
It is a source of pride that I am
able to make a contribution,
albeit a small one, toward
helping people with disabilities
just by shopping.
The card is an amazing innovation that transforms the experience of paying for purchases
into an act of joy and social
contribution.

Receipt of 2023 Good Design Award
The HERALBONY Card was among theaward winners in the 2023 Good DesignAward, a program that recognizes
superior designs aimed at fulfilling agiven goal or realizing a specific idea.
This award is a symbol of the acceptance of the ideals encapsulated in
the card.

47

ALL RIGHTS RESERVED 2023©ZUTOMAYO

©

©

うかうか

©Moomin Characters™​©2023 NAOKI HASHIMOTO©CHIMITAN©2023 Naoki Hashimoto©

©2023 NEXON Korea Corporation All Rights Reserved.

©

©

©King Record Co., Ltd.

©SDR

©2023 HERALBONY Co., Ltd.

©CHOCOLATE Inc.

©[NOiD] / murffin discs©LYRICAL NANOHA PROJECT©naganoTM & ©TOHO CO., LTD.

©Dai Nippon Printing Co., Ltd.

©CAPCOM CO., LTD. ALL RIGHTS RESERVED.

©2023 San-X Co., Ltd. All Rights Reserved.

©

©

©
©NO CORPORATION©PENGUINBOX©
© studio U.G. - NishimuraYuji©2023 San-X Co., Ltd. All Rights Reserved.

©2023 NetEase, Inc.

©

©

A CARD FOR EVERY TASTEMARUI GROUP offers a robust lineup of EPOS collaboration cards adorned with designs that reflect
people’s interests in relation to popular anime works, video games, artists, or other passions. Thislineup is constantly expanding through the efforts of employees across MARUI GROUP, allowing an
increasingly wide range of customers to find a card they love.
48

Complete list of EPOS collaboration cards (in Japanese only)www.eposcard.co.jp/gecard/portal/index.html

49Social Experiment 2

CORPORATECULTURE 2.0
In April 2023, MARUI GROUP announced its vision for its corporate culture 2.0, which will represent a
step in its evolution toward a company that contributes to the resolution of social issues. By building
on our corporate culture 1.0, the transition to corporate culture 2.0 will entail the cultivation of aculture that allows all employees to fully exercise their creativity and is thus conducive to innovation.
Specifically, we plan to reinvent our workstyles and organizations based on thorough examinationsof the physical and mental health conditions of our employees. At the same time, we will promote
digital transformation while expanding our portfolio of intangible assets. These multifaceted reforms
to our corporate culture are yet another aspect of MARUI GROUP’s social experiment.

50

51

1. Definition of “Flow”“FLOW”—A STATEOF HEIGHTENEDENGAGEMENTTHAT FOSTERS
WELL-BEING AND
INNOVATIONANALYSISREIKO KOJIMA

Search for a Society in Which People Get Joy from Their Work
People experience an intense sense of joy and fulfillment when they are able tofully exert themselves in pursuit of a goal to which they personally aspire, as
opposed to one that has been imposed upon them. A workplace therefore can bea place where people feel joy if they are allowed to work toward personal goals
together with their colleagues. For more than a decade, MARUI GROUP has been
searching for a way to foster a corporate culture that allows people to feel joy inthis manner. In this section, MARUI GROUP CWO Reiko Kojima will explain thesocial experiment that this search has led the Company to participate in.

Reiko Kojima
Director, Senior Executive Officer, and CWOGeneral Manager, Wellbeing Promotion Department, MARUI GROUP CO., LTD.
Company Physician
A physician by profession and a Doctor of Medicine, Reiko Kojima spent roughly 10 years as a company physician at amajor manufacturer before becoming a company physician at MARUI GROUP in 2011. When the Health Management
Division (currently the Wellbeing Promotion Department) was established in 2014, she took up the position of generalmanager of this organization, thereby assuming the role of promoting health and productivity management at theCompany. Kojima was appointed to the position of executive officer in 2019 and director, executive officer, and CWO
in 2021, later assuming her current position of director, senior executive officer, and CWO in 2023. She was the firstcompany physician to become a director of a listed company in Japan. Moreover, Kojima has been penning a series ofmonthly articles for Nikkei ESG, a magazine published by Nikkei Business Publications, Inc., since 2020.

52

I remember vividly the meeting at which President
Hiroshi Aoi announced his desire to make MARUIGROUP a place where employees can experience a“state of flow.” When I informed him that I had been
studying flow for years, I could see the feeling of
surprise of all in attendance. This was on March 22,
2012, the year after I became a company physician
at MARUI GROUP. It was on this day that I joined theCompany on its quest to foster a corporate culturethat allows people to experience a state of flow.
A flow state is the feeling one experiences when
they are fully engaged with and immersed in an
activity, and this state is known to be accompanied byintense feelings of joy and happiness. The term wascoined by world-renowned psychologist and professor emeritus of the University of Chicago Mihaly
Csikszentmihalyi (1934–2021) in 1975. At the time,
the focus of research in the field of psychology was
the cause of mental health issues. Csikszentmihalyi,
meanwhile, took a different approach by spearheading research on the conditions that make people feelhappiness, joy, or fulfillment. This approach toward
research would later spread across the globe.
Flow: The Psychology of Optimal Experience,
Csikszentmihalyi’s seminal work, opens with a chapter on happiness. It is often stated that the things thatmake us feel happiness or joy are different for every
person. However, decades of field research suggest
that, while the sources of happiness may be different,
actual states of happiness have many shared factors,
including those related to an individual’s physical andmental condition.
Csikszentmihalyi explains that, when people experience intense feelings of happiness or joy, they tend
to explain that experience with shockingly similar
language. This is true regardless of the activity thatinspired the feeling, whether it be work, hiking, orsome other activity. He dubbed the shared elementsof these experiences “flow.” This term was chosen toreflect how, when focused on a particular task, people
become less self-aware and begin to feel like they arecaught in a large current, or flow.
When someone enters a state of flow, they are
freed of unnecessary thoughts and therefore able tofully capitalize on their abilities. This is why a flow
state is sometimes referred to as an “optimal
experience.” In sports, this is often called being in thezone. Becoming immersed in a challenging task can
be a source of great learning and growth. Anothercharacteristic of flow is how the deep state of focus
can make time feel to progress faster than normal.

53

proactive in tackling it, even if it is of a high challenge
level, and will therefore be more prone to enter a flow
state. MARUI GROUP seeks to develop an organizationin which people are able to become immersed in thethings they love. In fact, we have seen the emergenceof several new businesses founded on the preferencesof employees over the past several years.

Figure 1 is an illustration of mental states in accordancewith the Csikszentmihalyi flow model. The vertical axis
represents the challenge level while the horizontal axis
indicates an individual’s skill level. According to thismodel, if an individual with sufficient skills is forced toengage in an activity with a “low challenge,” they will fall
into a state of boredom. Conversely, a “high challenge”
that exceeds a person’s skill level can result in a state ofworry. A prolonged state of worry can cause physicaland mental health disorders while ongoing boredom will
stunt an individual’s growth. It is easiest to obtain a flow
state when a person has skills pertaining to a challenging task and when the level of that challenge matches
those skills. When a person engages autonomously
in a task of a challenge level that can be surpassed by
the full exercise of their skills, they will be able to deliver
a high performance while feeling happiness, joy,and fulfillment.
Even if there is concern that the level of a task may be
a little too high, a flow state can be still achieved if one isable to exercise ingenuity to compensate for the skill

deficiency or to receive support as they build up theirskills. Graduating to higher level tasks can result infeelings of worry or anxiety, but each time an individual
overcomes these feelings and achieves a state of flow,
they will be rewarded with a sense of growth andaccompanying joy. They will then be in a position to
tackle a challenge of an even higher level and subsequently achieve a more significant state of flow. This
process of escalating challenges and skills can be seenin the three-channel flow model (see Figure 2).
At MARUI GROUP, we sought to internalize thisprocess through the implementation of an intra-Group
profession change system. Since its launch in 2013,
85% of all employees have taken advantage of thissystem, and surveys have revealed that 86% of systemusers have felt that the system contributed to their growth.
In this manner, our efforts to foster people that canachieve flow states in their work and organizations that
support this undertaking have been going on for a decade,and these efforts have been shaped by MARUI GROUP’s
corporate philosophy of “equate the development of ourpeople with the development of our company.”
These efforts are underscored by MARUI GROUP’s
inclusion of support for individual preferences amongits impact targets. We apply this pursuit to employees
as well; if someone enjoys a task, they will be more

As part of our efforts to evolve MARUI GROUP into a
company that contributes to the resolution of social
issues, what we are referring to as our “corporate
culture 2.0,” we performed an analysis of data from
June 2023 to determine how easy it currently is for
employees to achieve a state of flow. This informationis meant to be used in helping us create an organization in which employees are able to enter flow states
through their work.
Figure 3 is what is referred to as the four-channel
flow model in academic circles. This model employs
the experience sampling method developed by
Csikszentmihalyi and thus provided valuable insightwhen we performed our own analysis.
Mirroring the methodology used in Figure 3, we
prepared a graph with the challenge level on thevertical axis and the skill level on the horizontal axis
based on results from the annual surveys we conduct
with employees. For the challenge axis, we deemed
responses of four or five, out of five (with five being
the highest level), to the question on whether one isusing their skills to tackle challenges as representing
individuals who are prone to achieve a state of flow.
For the skill axis, individuals with responses of threeor four, out of four (with four being the highest level),to the question on whether one is using their skills

Figure 1: Eight-Channel Flow Model

Figure 2: Three-Channel Flow Model

Figure 3: Four-Channel Flow Model

Figure 4: MARUI GROUP’s Flow Analysis

High

High

3. Flow Analysis of MARUI GROUP

High

pouring over the writings of Csikszentmihalyi.
This process was the foundation for my responseat the meeting I mentioned earlier. It is common forflow to be misunderstood as a metaphysical concept,
when, quite the contrary, it is a theory founded on
scientific evidence backed by a wealth of fieldresearch. I explained this fact to individuals fromthroughout the Company at a meeting of the MediumTerm Management Visionary Committee held in July
2012. This proved to be my first act in promoting
well-being at MARUI GROUP.

High

This is easily understood by thinking about rockclimbing or a sports competition. When one is experiencing flow, they are running on full, which can be astrenuous experience. After the experience, however,they are filled with a sense of accomplishment andfeelings of self-confidence and self-esteem. It has
been found that people who frequently experiencesuch flow states are more able to focus on theirgoals, less likely to be overly influenced by others or
the circumstances around them, and more adept at
handling stress.
It is common for people to talk about finding ways
to work stress free. When I first became a physician,
I too thought it was best to avoid stress. In my previous
position as a company physician at a major manufacturer, however, I noticed that there were people who,
despite being incredibly busy and expressing thatthings were rough, were energized in their work.
At that time, I was performing outpatient physician
examinations at the department of psychosomatic
medicine of a general hospital on a weekly basis.
People from various professions would come in andtell me about how they were stressed out by their work.
Moreover, I had the opportunity to interact with people
from both ends of the spectrum, those who felt energized at work and those who had developed mental
health disorders as a result of their work. This waswhat made me so interested in the question of what
exactly is required for people to feel happy at work. In
2006, I became a graduate student while continuing towork in order to research this topic. As I took part inlearning opportunities for physicians, I became awareof the concept of flow. I quickly recognized that thiswas a meaningful tool for energizing organizations
through health, and I was thus inspired to continue
my research on this subject through means such as

2. R elationship Between the Flow Model andPeople’s Growth

Strong flow state 4%

Flow

Anxiety

Boredom(Low challenge, high skill)

2

Boredom
Relaxation

ApathyApathy(Low challenge, low skill)

Challenge level

Challenge level

Control

Worry

ch

Flow
(High challenge, high skill)

Skill level

High

Source: Flow Riron no Tenkai (“Development of Flow Theory”), Hiroaki Imamura,Kiyoshi Asakawa, Sekaishisosha-Kyogakusha Co., Ltd., 2003

54

Low

Skill level

High

Source: Flow Riron no Tenkai (“Development of Flow Theory”), Hiroaki Imamura,Kiyoshi Asakawa, Sekaishisosha-Kyogakusha Co., Ltd., 2003

Low

Low

Low

Low

1

Boredom

Low

3

Challenge level

an

w

o
Fl

Anxiety(High challenge, low skill)

4

l
ne

Challenge level

Anxiety

42%
5

ArousalLow

Skill level

High

Source: Flow Riron no Tenkai (“Development of Flow Theory”), Hiroaki Imamura,Kiyoshi Asakawa, Sekaishisosha-Kyogakusha Co., Ltd., 2003

1

Low

2

3

4

Skill level

High

Source: Organization-wide stress check analysis of 4,447 employees
instituted by MARUI GROUP in June 2023

55

and knowledge at work were deemed as being in aprime position to achieve a state of flow.
The results of this analysis can be seen in Figure 4.
Based on this analysis, the ratio of employees that areable to easily enter a state of flow is 42%. In order tobuild an organization where it is easier for employees
to heighten their skills and tackle greater challenges,
we aim to raise this ratio to 60% by 2030.
We also conducted an analysis that included work
engagement, the degree of passion and empowerment
people feel toward their work, alongside challenge andskill levels. The results of this analysis can be seen in
Figure 5. This analysis revealed that even people who
are using their skills and knowledge at work will still feel
low work engagement if the level of the challenges they
face is insufficient. These results underscore the importance of using one’s strengths to overcome challenges.
Scholars have defined eight elements of flow (seeFigure 8), among which is clear goals. We thus choseto conduct an analysis that looked at employees’
attitudes toward goals. The results of this analysis,

which can be seen in Figure 6, indicated that people
engaging in activities with sufficient challenges will
still have low work engagement if they lack clear
goals. In this manner, the importance of an organization in which people are able to approach challenges
with clear goals can even be seen in the numbers.
An even deeper analysis revealed that the clearer anindividual’s goals are and the more they feel that they canrecover from failures, the greater the sense of engagement one will have toward their work (see Figure 7).

Figure 8: Conditions for Flow

4. F
 ostering of People That Can Achieve Flow in
Their Work and Flow-Supporting Organizations

Source: Flow Riron no Tenkai (“Development of Flow Theory”), Hiroaki Imamura,
Kihiro Asakawa, Sekaishisosha-Kyogakusha Co., Ltd., 2003

A substantial amount of academic research has led
to the identification of eight conditions that contributeto a flow state (see Figure 8). We seek to combine theinsight from the wealth of flow research with the datafrom our own analysis and incorporate this into ourorganization in order to foster people who are able toexperience flow to fully exercise their skills and cre-ativity and organizations that support this endeavor.
For example, we have been enhancing our frameworks for one-on-one meetings between employees
and their supervisors on a Companywide basis. Thesemeetings are meant to provide opportunities to confirm the goals of employees, match their work challenges to their skill levels, determine the degree towhich they are able to concentrate and work toward
those goals, and support the autonomous action of
employees. However, if managers are to inspire the willof employees to set goals and effectively encouragethem to pursue these goals, they will need training.
For this reason, we are providing backup for these
efforts in the form of Being Workshops. It is important for people to have goals, but not everyone is able
to accurately put their goals into words. This is why
the Well-Being Management Project Team, which
comprises volunteering employees, developed ourunique Being Workshops—to teach how to articulate
one’s goals, to notice the relationship between the
Company’s impact and one’s goals, and to discuss
this topic with colleagues. The name “Being
Workshops” was chosen based on these workshops’
express purpose to help people in being themselves.
The first step of these workshops involved voluntary
participation by some 850 employees over the past
two years. The benefits of the workshops have beenassessed, verifying that 99% of participants are now
able to accurately articulate their goals. Moreover,surveys conducted after a month of employee participation in these workshops indicated an increase in theratio of employees expressing that they feel their work
is important, from 53% to 70%. As the second step, theworkshops are being used as a means of training
managers in directing one-on-one meetings withsubordinates. By having managers experience the best
approach toward inspiring the will of MARUI GROUP
employees to accomplish their goals, we look toheighten the effectiveness of these one-on-one meetings.

1. Clear goals
2. Complete concentration on the task
3. Merging of action and awareness4. Transformation of time
5. Immediate feedback
6. Balance between challenges and skills
7. Feeling of control over task
8. Autotelic activity

Figure 5: Analysis of Relationship Between Challenges, Skills, and Work Engagement
Strong link between level of challenge and work engagement
SkillsDegree to which skills and knowledge are used in work

Average work engagement score (out of 10)

Challenge

Degree to which skills arebeing used to tackle
challenges

Very low

Low

High

Very highVery high

9.3

7.2

8.4

8.6

High

6.6

6.9

7.1

7.5

Neither high nor low

4.9

5.8

6.1

6.2

Low

4.3

4.7

5.3

5.2

Very low

2.9

3.3

3.6

3.4

Source: Organization-wide stress check analysis of 4,447 employees instituted by MARUI GROUP in June 2023

Figure 6: Analysis of Relationship Between Challenges, Clarity of Goals, and Work Engagement
Low work engagement, even when one is challenged, if goals are unclear
Clarity of goals
Degree to which work is performed based on clear understanding of expected role

Average work engagement score (out of 10)

Challenge

Degree to which skills arebeing used to tackle
challenges

Very low

Low

Neither high nor low

High

Very highVery high

2.5

6.3

7.8

7.9

8.7

High

3.8

4.9

6.3

7.0

7.8

Neither high nor low

3.9

5.1

5.5

6.1

6.6

Low

4.0

4.3

4.8

5.1

5.4

Very low

2.7

2.9

3.0

3.9

4.2

Source: Organization-wide stress check analysis of 4,447 employees instituted by MARUI GROUP in June 2023

Figure 7: Analysis of Relationship Between Clarity of Goals, Ability to Learn from Failure, and Work Engagement
Low work engagement, even when goals are clear, if acceptance of failure is low
Clarity of goals
Degree to which work is performed based on clear understanding of expected role

Average work engagement score (out of 10)

Acceptanceof failure

Degree to which workplaceallows one to recover fromfailuresVery low

Low

Neither high nor low

High

Very highVery high

—

4.7

6.5

7.2

8.4

High

3.8

4.6

5.6

6.5

7.4

Low

3.3

4.4

5.0

5.8

7.1

Very low

3.1

3.8

4.4

5.2

6.4

Source: Organization-wide stress check analysis of 4,447 employees instituted by MARUI GROUP in June 2023

56

MARUI GROUP has been aspiring to foster a corporate culture founded on a high degree of autonomy formore than a decade. As a result, the ratio of employees
who volunteer to participate in Company initiatives has
risen to 85%. Going forward, we will seek to evolve into
a company that contributes to the resolution of social
issues in order to realize our corporate culture 2.0,
which will see us innovating through an ongoing process of taking on challenges and learning from failure
to amass the expertise imperative to success. A survey
issued in June 2022 revealed that 52%, or a majority of
employees, have a strong drive to tackle challenges.
This revelation led us to define action KPIs including
the numbers of new undertakings and attempts withthe goal of fostering a culture of acceptance toward
failure and encouragement of ambition.
Csikszentmihalyi believed that work was the activity in which one was most likely to enter a flow state.
Work is a relatively structured activity, has clear goals,
and serves as an opportunity to exercise our skills.
Regardless, it is common for people to have a negative attitude toward work, to see it as an encumbrance. Csikszentmihalyi referred to this as the“paradox of work.”
Despite the fact that field studies have indicated ahigh ratio of people entering a flow state during work,
people tend to ignore the quality of such direct experiences. Rather, they cling to assumptions based on
deep-rooted cultural stereotypes that frame work as
something negative. Csikszentmihalyi cites the primary reasons for this paradox as including the feelingthat one is being forced to take part in work, a lack ofchange and challenges, and friction with colleagues.
MARUI GROUP wants to be a company where
people can experience the sense of joy that should be
inherent in work. We will go about this by developing
organizations in which people do not feel forced totake part in work but rather exercise autonomy totackle varied challenges while supporting one
another. By accomplishing this, we aim to allow ouremployees to experience flow, or to have optimal
experiences, in order to unleash their creativity andgenerate results.

“ Contrary to what most of us believe, happiness does
not simply happen to us. It’s something that we makehappen, and it results from our doing our best.
Feeling fulfilled when we live up to our potentialities
is what motivates differentiation and leads to evolution. The experience of happiness in action is enjoyment—the exhilarating sensation of being fully alive.”— Mihaly Csikszentmihalyi

57

CREATION OF FUTURECORPORATE VALUEANALYSISAKIRA SATO

Three Flows for Heightening Future Corporate Value
Investor Akira Sato was an early proponent of the idea that human assets, intellectual
assets, and other intangible assets are important drivers of the creation of corporate
value. The corporate culture that MARUI GROUP seeks to cultivate, one that allows
employees to experience a flow state, is also an intangible asset. Moreover, Satospeaks of a “corporate flow state,” which extrapolates from this corporate culture
concept, as something that will aid in co-creation with younger generations.

Feeling of Excitement Associatedwith Intangible Assets

Akira Sato
Partner, Value Create Inc.
General Manager, Investment Research Department,
MARUI GROUP CO., LTD. (Non-full time)
Akira Sato joined Nomura Securities Co., Ltd., where heprimarily worked as a securities analyst, even claiming theNo. 1 spot in the general company category of the 1995
ranking of analysts by the financial newspaper (currently
NIKKEI VERITAS) of what is now Nikkei Inc. He co-founded
Value Create Inc. together with Masahiro Mitomi, acertified public accountant in Japan and the UnitedStates, in 2001. Over the years, he has held a number of
positions, which have included being a part-time lecturer
at the Department of Management of Technology of theTokyo University of Science and director of WICI Japan.
He also held director, outside director, and corporate
auditor positions at overseas asset managementcompanies, Rheos Capital Works Inc., Commons AssetManagement, Inc., Fuji Pharma Co., Ltd., and othercompanies. In 2016, Sato became general manager of theInvestment Research Department at MARUI GROUP.

58

As an analyst, I had the opportunity tomeet various managers of companies
from around the world and to visit
numerous sites of corporate activities.
These experiences led me to believe that
it is the vision of a company, the passionof its managers, and the aspirations of
its employees that create corporate
value. These are all forms of intangible
assets, specifically the invisible assetsthat cannot be displayed on the balance
sheet. It was the sense of excitement I
felt toward the potential for individual,organizational, and social value to becreated using these assets that inspired
me to found Value Create Inc. My life’s
work is to help create value using suchintangible assets. Even today, I still get
into a flow state when I am delving deep
into the potential for value creation
together with various interlocutors.

data analysis technologies, combinedwith insight gained through the processof discussing and formulating and verifying hypotheses together with managers,
investors, and experts in various fields,
have allowed me to reach the hypothesisthat there are three flows that drive thecreation of corporate value.

Flow of Excitement, Energy, and Joy
The first flow of my hypothesis is thetype of flow that was proposed bypsychologist Mihaly Csikszentmihalyi.
Dr. Reiko Kojima offers an explanation ofthis concept earlier in this report (seepage 52). The second flow is the flow of

Figure 1: Five Assets Fueling the Flow of Corporate Value Creation

Customer
Assets(Joy)

PhysicalAssets

All-Encompassing Perspective
Toward Value
Even when I was an analyst, I had suspected that corporate value was not justthe sum of a company’s intangible
assets, but rather something that needed
to be gleaned from a more all-encompassing perspective. Unfortunately, I was
unable to get to the heart of this matter at
the time. Luckily, recent advancements inintangible assets. The basic idea is that
corporate value is created through aflow that begins with the excitement oforganizational assets and is then continued through the energy of human assets
and the joy of customer assets before
being translated to physical assets andeventually financial assets. The excitement employees feel for a company’s
shared purpose, vision, and culture
energizes them in their work, driving
them to create products and services
that bring joy to customers. The end
result of this process is sales and earnings (see Figure 1). Various analyses
have led to the conclusion that corporate
value is influenced by a company’s

Organizational
Assets(Excitement)
Financial
AssetsHuman Assets(Energy)

Source: Value Create Inc.

59

Financial Theory Framing Value as
Future Cash Flows

corporate culture and by the work
engagement of its employees (seeFigure 2). This casts light on the importance of organizational measures (organizational assets) to support the efforts
of individuals and teams (humanassets). Organizations developed
through means such as fostering corporate cultures, encouraging voluntaryaction, accepting failure, and installing
frameworks for emergent team building
will likely be more potent at creating
value in a society propelled by younger
generations than organizations that are
stratified in the traditional fashion.

all things that relate to the long term.
Nevertheless, if we apply financial theories, we will see that around 60% or 70%
of corporate value comprises FCF thatwill be generated within the next decade.
This is clearly apparent if we prepare a
corporate value asset model using thecosts of capital of developed countries.
Rather than standalone hit products oreffective medium-term strategies, abetter driver of a company’s corporate

The third flow of my hypothesis is longterm free cash flow (FCF). It is common
for businesspeople to focus on indicators like sales, orders, customers, andproject progress over the short term,
tracking these indicators on a monthly,quarterly, six-month, or single-year basis.
They will also sometimes think about
medium-term strategies. It is rare, however, for someone to be constantly
mindful of the fact that a company’s
purpose, mission, vision, and values arevalue is its intangible assets (see Figure3). These assets can include a consistent and unwavering sense of purposeor a unique corporate culture that allows

Figure 2: Corporate Value Created by Organizational Culture
4,000

Companies with organizational culture scoresin top 20%

Index value

3,000

Companies with organizational culture scoresin bottom 20%

2,000

1,000

0

2011

2012

2013

2014

2015

2016

a company to recruit and develop talented people who are adept at responding to operating environment changes.

2017

Source: Relationship Between Organizational Culture and Performance Based on Employee Opinions, Hironori Nishiie and Hiroshi Tsuda

Connection Between Three Flows
Figure 3: Illustrating Connection Between Organizational and Human Assets and Future Cash Flows and Corporate Value
Corporate Value Assessment (Discounted Cash Flow) Model (excerpt)
Hypothesis 1: High work engagement supported by an entrenched corporate
culture contributes to increased productivity, creativity, andultimately FCF.
Fiscal years
endingMarch 31

Net sales

Operatingincome

2024

100

10

FCF
5

Present
FCF value

2025

110

11

4

3

121

12

4

4

2027

133

13

5

4

2028

146

15

5

4

2029

161

16

6

4

2030

177

18

6

4

Medium-Term Strategies, etc.
25%

2031

195

19

7

4

214

21

8

4

2033

236

24

9

4

2034 andbeyond

236

24

202

103

72%

143

100%

Cost of capital

7%

Hypothesis 2: Experimentation and learning as an organization foster
capacity to avoid serious failures, reduce business and­investment risks, and thereby lower cost of capital.

60

Everyday Activities

3%

2032

Total of discounted present FCF value

Common Areas of Focus% of corporate
value

5

2026

Areas of Focus and Corporate Value

Principles Shaping
Corporate Culture
Operating System

Purpose,
Vision, etc.

Corporate Value
Note: The corporate value asset model represents estimates based on
hypotheses and is purely meant to communicate the related ideas.
It does not reflect actual figures for MARUI GROUP.
Source: Value Create Inc.

The three flows I speak of are actuallyinterconnected. Employees who can
become immersed in their work toachieve a state of flow tend to have highlevels of work engagement, come up withcreative ideas, and achieve impressive
productivity. These attributes help fuelsales growth and improve operating
margins. In other words, employees who
experience flow heighten the monetary
flow that is medium-term FCF. Enabling
employees to experience flow requiresthat a company develop its organizationby sharing aspirations and visions, fostering its corporate culture, and creating
frameworks that allow employees toexercise ownership in work. If a company
with such an organization then goes on
to experiment, amassing a ledger ofsmall successes and failures and learning as an organization, it will gain thecapacity to avoid serious failures, reducebusiness and investment risks, andthereby lower cost of capital. Moreover,investments in the intangible assets I
speak of not only allow for flexible course
corrections, they also contribute to higher
returns on invested capital and further
decreases in cost of capital.

Creation of Value
Intangible assets are unique in theirscale and in their ability to generatesynergies and impact other areas. Thisis best seen with knowledge, which
grows the more it is shared. It is important to let people go where their excitement leads them so that they can
engage with co-creation partners thatlie outside of their teams or even theircompany to allow knowledge to beshared rather than hoarded. I am confident that this approach will contribute tosignificant increases in value, not just forthe company in question but also forindividuals and for society as a whole.
If we frame corporate value as future
FCF, then we will see how crucial it is topractice co-creation with younger

generations. The continuation of thedestruction of the environment and thefragmenting of society will no doubt
throttle growth and drive up businessrisks and cost of capital, which in turnwill suppress corporate value. The
pursuit of higher corporate value therefore requires that people unleash theirfull potential to take part in co-creation
both with generations that are currently
in power and with the younger generations who will shape the future in orderto create a sustainable society.
Now that we know the connection
between the three flows, our next task
will be to formulate and verify hypotheses and experiment to find the cause–
effect relationship between the threeflows, particularly the relationshipbetween organizational assets andhuman assets. To this end, I hope thatMARUI GROUP will step up its engagement with stakeholders to contribute to
the creation of value for individuals, for
the Company, and for society.

61

Update from Version 1.0 to Version 2.0 ofEver-Evolving Corporate Culture

Growing Range of Opportunities for Voluntary Participation
Discussions regarding corporate philosophy

Corporate Culture 1.0 Installed in 2005

Dispatches to external business schools
Medium-term management committee
Leader development program

2008

2010

2012

2014

2016

2018

2020

Concepts of Digital Proficiency and Flow

No matter what new business venture a company seeks toadvance, no matter how empowered employees are to exercise
their skills, it will mean nothing if the corporate culture that
constitutes the operating system on which these efforts are run
is outdated. This recognition, as well as the understanding that
employees and other forms of human capital are drivers ofcorporate value creation, has inspired MARUI GROUP to pursue
the ongoing evolution of its corporate culture. In this undertaking, we are guided by our corporate philosophy of “equate thedevelopment of our people with the development of ourcompany.”
This process has led MARUI GROUP to update its corporate
culture from version 1.0 to version 2.0. Version 1.0 of our corporate culture was installed in 2005, when Hiroshi Aoi assumed
the position of president. In corporate culture 1.0, we sought toencourage autonomy, rather than compel employees; to havethem enjoy work, rather than have it forced upon them; to havemanagement support employees, rather than command them;to contribute to society through our business, rather than distinguish between social contribution and business activities; andto focus on improving value, rather than performance.

Human Capital as a Driver of Corporate Value

Eight Focus Areas of Initiatives for Transforming Corporate Culture

Vision for Digitally Proficient Human Resources

Growth of People

Human Capital

Corporate Culture
Corporate
Philosophy

1. Corporate philosophy
2. Engagement
3. Workstyle reforms
4. Diversity
5. Voluntary participation
6. Intra-Group profession changes
7. Evaluations emphasizing both
performance and value
8. Well-being
Old Corporate
Culture2022

In 2023, MARUI GROUP began installing its corporate culture
2.0, which will entail its seeking to achieve earnings growth
while generating its desired impact as a company that contributes to the resolution of social issues. Our previous businessinvolved a labor- and capital-intensive model, and we therefore
sought the type of people who could perform set tasks in ahighly efficient manner. In the future, however, we will look toengage in new intellectual creation businesses, and we will thus
require individuals capable of developing such businesses. A
key concept for this transition will be digital proficiency. The
Company will seek out individuals who are able to combine
digital technologies with hypothesis- and goal-oriented thinking
to support people’s interests. However, MARUI GROUP was
lacking in such individuals, meaning that recruitment of people
with these talents was a pressing task. This recognition led us
to commence internal digital transformation training programs
and app development contests, among other initiatives.
At the same time, we realize that achieving growth while
addressing social issues will be an incredibly challenging task,

Propensity for structure
and action

Interests

Hypotheses

and one that we cannot accomplish purely by continuing on
our current path. Achieving this lofty goal will require that all
employees are able to exercise their creativity, and the conceptof flow* will be indispensable to accomplishing this task. Flowrefers to a state in which an individual becomes so immersed ina task that they lose track of time and of themselves. This stateis generally experienced when an individual is presented with achallenge of a level that matches their skills. Experiencing aflow state allows one to fully exercise their creativity to surmount challenging tasks and grow through the process.
Moreover, when one experiences a flow state through theirwork, one will no doubt gain a sense of happiness through theexperience, while the process of working toward lofty goals will
make one feel that they are growing. MARUI GROUP is therefore
endeavoring to create an organization in which employees areable to enter flow states through their work in order to cultivate
the type of human resources it requires. We thereby aim to
update our corporate culture 2.0, which is anticipated to contribute to innovation.
* For a medical-perspective analysis of flow by director, company physician, and CWO
Reiko Kojima, please refer to pages 52–57.

Joy gained fromimmersion

Applications

Earnings Growth& Desired Impact

Members of Employee Shareholder Project Team

Flow State Experienced by Tackling Challenging Tasks

Operating System

Goals

Company that
contributes to theresolution of social
issuesFull exercise of creativity

New Corporate Culture

For more information on the eight focus areas of initiatives for transforming corporate culture, please refer to the presentation entitled “Human Capital-Focused Managementof MARUI GROUP #1 Corporate Culture Reforms.”
www.0101maruigroup.co.jp/en/ir/pdf/others/h_report.pdf

62Intra-Group profession changes

Our efforts to transform our corporate culture began with theformulation of our corporate philosophy and discussions with
employees. We then went on to implement unique initiatives
based on eight focus areas, including promoting engagement
and later workstyle reforms, diversity, voluntary participation,
intra-Group profession changes, evaluations emphasizing both
performance and value, and well-being. Of particular note is thedistinctively MARUI GROUP focus of voluntary participation. At
MARUI GROUP, participation in cross-organizational project
teams and learning opportunities like the Medium-Term
Management Visionary Committee is done on a voluntarybasis. Relocations and promotions are also based on employees volunteering. As of March 31, 2023, 85% of employees hadtaken advantage of such volunteer opportunities. The resulting
culture of voluntary participation has led to higher employee
engagement, and employees have stated that MARUI GROUP
has changed so much that it feels like a completely different
company. We moved forward with these measures for morethan 15 years, and now, as a result, the corporate culture thatfunctions as the operating system for management has finallybeen updated. MARUI GROUP is thus now poised to embrace a
new management approach aimed at achieving earnings
growth while generating our desired impact.

Corporate Value

Approximately 85% of
employees have participatedin learning opportunities on a
voluntary, as opposed tocompulsory, basis (opportunities are available regardless of age or rank).

Official project teams and initiatives

In 2007, President Hiroshi Aoi posed to all employees the question: For what purpose are we working?
The corporate culture we desired at this time was not one of simply pursuing short-term gains. Rather, we sought to fostera corporate culture in which all employees were empowered to exercise their skills and thereby generate innovation,and drive improvements in corporate value.

Agile development using
digital technologies

DigitalTechnologies

Capacity to formulate
vision and backcast
from goals

Creation of an organization where people canexperience flow through their work

63

Workstyle and organizational innovation and digital transformation will be key to our efforts to create an organizationin which employees are able to achieve states of flow through their work. Workstyle and organizational innovation will
be aimed at allowing any talented and motivated individual to begin making contributions early in their careerat MARUI GROUP, regardless of their age or gender.

Point 1: P roject Team-Oriented Workstyles
Project teams are teams based on specific themes open to
voluntary participation by all MARUI GROUP employees. As wemoved forward with the promotion of a culture of engagement
and voluntary participation, official Groupwide project teams
and initiatives became more active, eventually leading to theorganization of co-creative teams oriented toward co-creation
with specific partners starting in 2020. By providing suchopportunities to experience a new environment outside of anindividual’s usual organization, we have accelerated our efforts
to develop people and organizations capable of autonomous
action and innovation.
These project teams have not been excluded from workstyleand organizational innovation activities. Rather, these activities
have been advanced throughout the Group as a part of oureveryday efforts. Our innovation activities started with the expansion of official initiatives based on various themes related toachieving earnings growth while generating our desired impact.
In this manner, project teams comprising members volunteering
based on their interest in the respective theme are engaged in
activities that spread beyond the boundaries of their organizations and of the Group, and these activities are contributing toinnovation. Moreover, we allow employees to spend as muchas 10% to 50% of their time at work on such official initiatives.
The innovations described in Social Experiment 1: Fostering of
Innovation (see pages 26–49) are a product of the efforts ofproject team-oriented workstyles.

Process of Official Initiatives for Creating and Verifying Ideas
Phase 1:

Theme selection

Phase 2:

Idea creation (official initiatives)

Phase 3:Business planning, hypothesis verification(official initiatives)

Phase 4:

Commercialization (dedicated organization[okos, operating companies])

Phase 5:Business expansion (dedicated organization[okos, operating companies])

Activities of Official Initiative Themes
Activities
ImpactEntrepreneur community development
Development of applications for younger generations
Development of career design applications
Investigation of workstyles for post-COVID-19 world

Impactand profit

Creation of ideas for body positivity and sizes (implementation of size matching applications)Customer experience design for encouraging­sustainable consumption and innovating lifestyles
Development of businesses for promoting diversity,
equity, and inclusion
Exploration of new credit card services employing Web3

ProfitDevelopment of new financial services (­implementationof freelancer cards)

VOICE
Fun of Creating Ideas from Scratch

Ryo Hayasaka
Member of official initiative for explorationof new credit card services employing Web3
Co-Creative Media Officer
D2C & Co. Inc.

64

Since joining MARUI GROUP in 2015, I have taken part in a number of project teams, including cocreative teams and teams related to diversity, equity, and inclusion. Right now, I am involved in initiatives
for developing new credit card services that employ Web3 technology, which will be important in the
coming era. I have yet to hear of an example of a highly successful Web3-powered service or product inJapan. This means that MARUI GROUP has the potential to become a leader in this field, and this is what
inspired me to take part. Our team had to create all of our ideas from scratch. This included researching
non-fungible tokens and seeking our co-creation partners, and this process proved to be even moredifficult than I had imagined. Still, it is fun despite these challenges. I am committed to bringing ourservices to commercialization to ensure that no one is left behind in the era of Web3.

INNOVATION

Workstyle and Organizational Innovation

Point 2: O rganizations without Direct Supervisors
The existence of different product development processes is atestament to the fact that there is no one-size-fits-all model fororganizations, and that organizations should be shaped basedon their characteristics. This realization led MARUI GROUP to
the idea to create organizations that did not have traditional
section managers and were structured more like teams. Under
this model, the section managers who are traditionally responsible for overseeing people and organizations have been
reframed, not as ­organization supervisors but as team supporters. In this new role, these individuals are expected to create aflat organization in which all members act with autonomy inorder to exercise creativity as a team.
This structure was introduced into the Sustainability
Department and the Co-Creative Investment Department on a
trial basis in April 2023. The trial has resulted in increases inopportunities for new employees to act as leaders as well as in
the spread of an approach of working with autonomy. Moreover,feedback has been received indicating that the reduced needfor processes like reporting to one’s more-experienced colleagues or superiors has expedited decision-making processes.

Looking ahead, we will seek to determine how this approach
will be employed in the future based on the lessons learned anddiscoveries made at the aforementioned two departments.

Point 3: Promotion to Management as Early as Age 26
As a form of human capital investment, human resource evaluation systems and the number of promotion tests have beenrevised to reduce the minimum age for promotion to management positions from 29 to 26. In light of this change, we held
briefings at which we explained to employees that MARUIGROUP was faced with a pressing need to conduct investments
and education activities targeting employees in order to foster
individuals capable of shaping the future of the Company. It
was also stated that these measures would help us achieve
harmony between the interests and happiness of employees
and all of our other stakeholders.
These changes were embraced by most employees, and thispositive reception was seen among employees of all ages andranks. Going forward, MARUI GROUP will endeavor to create anorganization where individuals are able to succeed in leadershiproles regardless of their age or experience.

Roles in Traditional Organizations and in New Team Structure
Traditional
Organization

Team Structure
Consult

Team
Manager =Section Manager (Leader)

FunctionSpecific Role

LeaderFunctionSpecific RoleManager =Team

FunctionSpecific Role

LeaderSupporter

FunctionSpecific Role

SupportVOICE
Social Experiment of Accepting Failure and Encouraging Ambition

Arisa Hashimoto
General Manager, Personnel Division
MARUI GROUP CO., LTD.

The Personnel Division has a cornerstone role to play in the development of an organization in which
employees are able to enter flow states through their work. If MARUI GROUP is to continue to be acompany chosen by society and by members of younger generations, who have the potential to shape
the future, it must address the pressing need to reform its human resource-related practices. As wemove forward with these reforms, I intend to pursue coordination with, for example, the Corporate
Planning Division, in regard to the secretariat functions of the Human Resource Strategy Committee,
and the Wellbeing Promotion Department, in relation to our unique key performance indicators related
to flow states. We are committed to evolving as a social experiment on accepting failure and encouraging ambition by accelerating co-creation with internal and external partners. We thereby aim toreach a state at which we are able to achieve earnings growth while generating our desired impact as
quickly as possible.

65Digital Transformation
In addition to workstyle and organizational innovation, MARUI GROUP must also promote digital transformation
if it is to achieve earnings growth while generating its desired impact. Successful digital transformation cannot be
separated from workstyle and organizational innovation, and how best to address these tasks is thus an
important aspect of corporate reforms in the modern era.

People-Oriented Digital
Transformation
MARUI GROUP’s management has long
been inflicted by a sense of stagnancy
with regard to promotion of digitaltransformation. In January 2023,
President Aoi objectively appraised thisstagnancy by explaining that, while
MARUI GROUP had been transforming
into a company that is more in tune withthe contemporary era, it has still yet toachieve its true goal of becoming an
intellectual creation company thatdesigns user experiences. Digital technologies will be imperative to addressing
this disparity between our current stateand our vision. The strength of digitaltechnologies comes in their ability toallow us to leverage our limited assets
to maximum efficiency and to swiftly
verify hypotheses on shorter cycles.
MARUI GROUP’s slow progress withdigital transformation has been due to alack of the type of highly talented digitally
proficient human resources needed toadvance this transformation. The MARUIGROUP brand is not one that is prone toattract such individuals. This is the reason

we arranged internal digital technology
training in December 2021. We enlisted
the help of co-creative investee Life isTech Inc. in organizing this training. Later,in December 2022, we held MARUIGROUP’s first app development contest
with the aim of uncovering digital technology talent that may be hidden within the
Company.

Muture as a Magnet for Attracting
Digitally Proficient Human Resources
Pressed with the urgent need to recruitand to develop digitally proficient humanresources, we reached out to Goodpatch
Inc., a cutting-edge user interface anduser experience design company, insearch of a viable option for addressingthese needs. Together, we found asolution to this dilemma: the establishment of a joint venture between thesetwo companies.
At the end of the day, it is people who
advance corporate reforms. We therefore
sought to form a joint venture that could
serve as a magnet for attracting talented
human resources. Another aim of thismove was to combine the talents ofGoodpatch’s talented user experience
designers with those of MARUI GROUP’s
staff to advance awareness reforms andstimulate the growth of our people. This
process was anticipated to lead, by necessity, to the transformation of our organizations and of the Company as a whole.
Muture Corporation, the joint venture
in question, started its operations in April
2022 with an initial team of five people
consisting of two members from
Goodpatch and three members fromMARUI GROUP. This team has sincegrown to include numerous talented
user experience and interface designers.
Today, Muture is supporting thedevelopment of such services as theEPOS app and the OMEMIE store opening support service, thereby playing ahands-on role in advancing digital transformation at MARUI GROUP.

fostered over these years has permeated all of our businesses. This process
has led to the creation of businesses
based on a perspective that is radicallydifferent from those of digitally proficient human resources. This differencein perspective is indicative of a greater
difference in the culture between people
who handle intangible software andthose with a culture of dealing in physical items.
User experience refers to the experience provided to users. User experience
design is thus the process of enhancing
this experience. While, in a way, designing a user experience is indeed a part ofdeveloping physical stores, the term isgenerally used to refer to experiences
offered by online services that can beaccessed at any time through internet
browsers or apps. The desires andreactions of all users of such services
are immediately translated into data thatcan be used to guide swift and flexible
improvements to services. Physicalstores also use online data, but the basisof the thinking behind digital transformation is online services.

Benefits Dependent on Organization
Shift Toward Online-Based Thinking
Since its founding, MARUI GROUP has
been a company that provides customers with physical-space experiences inbrick-and-mortar stores. Today, theretailing insight and hospitality we have

Path Toward Vision Using Digital Technologies
VisionDigital Technologies
Leverage
Maximum efficiency in leveraging
limited assets
Disparity

Speed
Swift verification of hypotheses on

Hypothesis verification is an importantpart of creating innovation and introducing such innovations into society. This
process entails collecting data, experimenting with hypotheses, and identifying issues, and digital technologies allow
for increased agility and flexibility in thisprocess. The hypothesis verification
process made possible by digital technologies features greater cost performance than conventional hypothesis
verification processes that do not
employ these technologies. This cost
performance allows for the hypothesis
verification process to be repeated moreeasily in the case of failure. Moreover,these technologies enable the insightgained through this process to be stored
as organizational knowledge.
However, the benefits that can berealized through the use of these technologies are dependent on the structureof an organization. An overly complicated approval process, for example,
can impede agile action. The ongoingcreation of innovation requires the latest
information and insight to be constantly
shared throughout an organization. For
this reason, MARUI GROUP is currently
pressed to transform into an organization that is agile on all levels.

OMEMIEStore Opening Support Service
OMEMIE is a unique, completely online
store opening support service that is
an easy-to-use option for anyone
looking to set up a store in a Marui or
Modi location.
Official OMEMIE website(in Japanese only)

Areas of Expertise and Deficiency of
MARUI GROUP
Core Systems

Areas of Expertise
Large-scale data processing
Detailed planning
Waterfall approach
Accuracy and reliability

Different Culture
Agile Development

EPOS AppThe EPOS app is a lifestyle app that
proposes methods of utilizing one’s
money that are matched to the lifestylesof the individual user.
Google Play

Areas of Deficiency
User interface and experience
improvement

App Store

Hypothesis verification
Agile development
Speed and flexibility

shorter cycles

Current State

66

Initial team of Muture(Back: From left) Daisuke Azami, Aya Tanabe, andHiroya Nakamura(Front: From left) Takayuki Shibao and Sarasa Yonenaga

67

Appointment ofGoodpatch CEO
as CDXO

Muture has helped us recruit several new employees, who are contributing to the development of
the EPOS app and the OMEMIE service. However,creating a truly agile organization requires both
frontline effort by digitally proficient humanresources and strong leadership by an individualwith digital technology expertise.
We found this leadership in Naofumi Tsuchiya,
CEO of Goodpatch, our partner in the establishment of Muture. Tsuchiya has been appointed tothe position of executive officer and CDXO (chief
digital transformation officer) of MARUI GROUP.
In addition to his digital transformation expertise, Tsuchiya also possesses significant insight
into organizational development. In fact, it was a
proposal by Tsuchiya that led to the establishment of Muture as a joint venture.
With the perspective of both a digital technology specialist and a manager, Tsuchiya provides
guidance pertaining to the promotion of workstyleand organizational innovation and digital transformation. This guidance is a powerful asset in ourquest to develop agile organizations and transform MARUI GROUP as a whole.
By succeeding in this quest, MARUI GROUP
hopes to garner attention as an example of successful digital transformation and thereby propose a solution to the contemporary issue oflarge companies falling behind in the advancement of their digital transformation endeavors.

Message from CDXO Tsuchiya at Time of Appointment

Acceptance of Failure and Encouragement of Ambition

When people think of digital transformation, theytend to picture the creation of new services andsolutions. However, I feel that a more importantelement of digital transformation is its use to createorganizations that can drive change.
Since the establishment of Muture, I have played
a role in developing human resources and transforming the organizational culture at MARUIGROUP through this company. During the course ofthis process, I have seen our designers help create
new businesses based on the customer’s perspective and reshape organizations via digitaltransformation.
MARUI GROUP is in the middle of this transformation process. The Company thus finds itself in an
exciting state in which new businesses are constantly being created. I am proud to be able to takepart in the transformation of a large and historiccompany like MARUI GROUP. As CDXO, I hope tocraft frameworks that will allow MARUI GROUP’s
talented people to further realize their potential. I will
also give my all to help MARUI GROUP achieve its
vision of evolving into a company that contributes tothe resolution of social issues.

Comments at Strategy Committee Meetings Pertaining to
the Appointment of Tsuchiya as an Executive Officer

Financial service provider Money Forward, Inc., has appointed an individual from Alphabet Inc. to serve as theirchief product officer. MARUI GROUP needs a person like Mr. Tsuchiya in its management. He already has a
track record through his involvement in creating Muture. (Etsuko Okajima)

At monthly meetings of the board of directors of Muture, directors raise a lot of issues pertaining to MARUI GROUP.
If we do not innovate our workstyles and organizations, we cannot achieve a true digital transformation. I am
sure that the insight of Goodpatch will be indispensable to the future of MARUI GROUP. (Hiroshi Aoi)

& magazine article featuring Muture Corporation(in Japanese only)

68

Social Experiment as Part ofEvolution into a Company That
Contributes to the Resolution ofSocial Issues

MARUI GROUP’s corporate culture of encouraging autonomy
by its employees was cultivated over a period of more than 15
years. We began by making participation in project teams andother initiatives a voluntary choice, as opposed to a directive
issued from above. This move resulted in 85% of MARUIGROUP’s employee base having taken part in voluntary initiatives as of March 31, 2023. As a result, the Company is now
filled with cross-organizational teams engaged in projects
aimed at achieving earnings growth while generating its
desired impact.
Moreover, in 2023 we began undertaking an update to our
corporate culture 2.0. By moving forward with this update,
MARUI GROUP aims to function as a social experiment on theacceptance of failure and the encouragement of ambition inorder to allow all employees to fully exercise their creativity.
This endeavor could be seen as the start of our journey todevelop an agile organizational culture. Specifically, this culture
will combine hypothesis verification and agile development
powered by digital technologies.
The strength of digital technologies comes in their ability toallow us to leverage our limited assets to maximum efficiency
and to swiftly verify hypotheses on shorter cycles. These technologies are thus crucial to fostering a culture of acceptance offailure and encouragement of ambition.

Overview of Corporate Culture 2.0
Present

Encouragement of voluntary participation

Ratio of employees voluntarily participating: 85%

New Corporate Culture

Going Forward

Acceptance of failure and encouragement of ambition:“Fail fast, fail forward”

Number of new undertakings and attempts: 5,000

Social Experiment“Fail Fast, Fail Forward”
MARUI GROUP seeks to encourage all of its employees to beproactive in taking on new challenges, without fear of failure.
This is why we have defined action key performance indicators
as the number of new undertakings and attempts with the goalof encouraging employees to work toward their ambitions.
Moreover, employees are encouraged to “fail fast, fail forward” togain the knowledge necessary to succeed through a process ofearly experimentation and failure. MARUI GROUP thereby aims
to become a company that continues to generate innovation.
By functioning as a social experiment, MARUI GROUP aspires
to evolve into a company that contributes to the resolution ofsocial issues.

VisionCompany That Contributes to the Resolution ofSocial Issues

News release detailing the appointment of Tsuchiya as
CDXO (in Japanese only)69

ENTERPRISE AGILE APPROACH
AND DESIGN-ORIENTEDTHINKING
DIALOGUE 02

NAOFUMI TSUCHIYAHIROSHI AOICorporate Transformation to Allow Employees to Embrace Their Emotions and Unleash Their Creativity
In April 2022, MARUI GROUP embarked on a journey of corporate transformation together with Goodpatch Inc. and
Muture Corporation, a joint venture founded with Goodpatch. Naofumi Tsuchiya, CEO of Goodpatch and executive
officer at MARUI GROUP, and President Hiroshi Aoi are united in their commitment to achieve agile management
at a large-scale company like MARUI GROUP. One of the tools they are utilizing in this transformation is designoriented thinking, and this process is being advanced with the goal of allowing employees to embrace their emotions and sensibilities and unleash their creativity in order to generate innovation.
Marriage-Like Relationship
Tsuchiya: You may recall, Mr. Aoi, that it
was in the spring of 2021 when we first
met. After that, I looked into MARUIGROUP and the Company surprised mein a lot of positive ways. From sustainability to human resource development,
you were at the forefront in many areas
where major companies are now pressed
to make substantial changes. Despite
how far ahead you were then, you still felt
there was more you needed to do, right?
Aoi: That is true.
Tsuchiya: I spoke with many employees
at MARUI GROUP over a period of threemonths. These conversations haverevealed issues with hiring at theCompany. Specifically, you did not havethe people or the functions to cultivate
the people needed to advance initiatives
related to digital transformation, agile
management, customer-oriented
approaches, or user experience. As apossible solution to this issue, I proposedthat MARUI GROUP and Goodpatch forma digital technology joint venture company to attract digital technology experts
for you. I remember how quick you wereto accept my proposal.
Aoi: I immediately recognized the important opportunity you were presenting
and knew I had to jump on it.
Tsuchiya: MARUI GROUP has a lot of70

really great people and an inspiring
corporate culture. It was clear that, if
you could get past the bottleneck when
it came to digital technologies, theCompany would become an amazing
example of what can be accomplishedthrough digital transformation at a large
company.
Aoi: About a year has passed since we
set up that joint venture, Muture, and I
am pleased to see that we have beenable to attract people who are eager tohelp out with the digital transformationof a large company. Our team of digitaltechnology experts only had five members when we established Muture, butthat number had grown to 14 in October
2023. I love taking part in social experiments, and Muture is one of those. If
Muture can become a vessel for achemical reaction between Goodpatch
and MARUI GROUP, it will no doubt
become a key element of our successgoing forward.
Tsuchiya: Japan has yet to see an
example of a corporate transformation
being advanced through a joint venturecompany. That is just how revolutionary
this undertaking is.
Aoi: MARUI GROUP’s corporate philosophy calls on us to “continue evolving tobetter aid our customers.” If we are toadhere to this philosophy, we will needto transform management to be more

based on software and digital technologies, which will involve a departure fromour prior business model, which was
prefaced on physical stores and face-toface interactions with customers. This
will be as big a shift as was the transition from the belief that the sun revolved
around the earth to recognizing that theearth revolves around the sun.
Nevertheless, I recognized that successin this shift was imperative to our ability
to orient ourselves toward and serve
customers in the way we desire.
Tsuchiya: What we are trying to accomplish constitutes an enterprise agile
approach. We need to transform MARUIGROUP’s organizational culture andstructure and the flow of decisionmaking processes. The end goal of thisprocess will be to transform an enterprise like MARUI GROUP into a user
experience company. I am overjoyed
to see people who want to make thisundertaking a part of their career cometogether at Muture.
Aoi: It is really exciting. MARUI GROUP
employees, who had previously worked ina vertically stratified organization, havebeen teaming up with people at Muture,and this has been stimulating rapid
growth and change. In fact, an employee
taking part in a project with Muture evenmentioned that their involvement in thisproject had allowed them to break down

Naofumi Tsuchiya
Representative Director and CEO, Goodpatch Inc.
Executive Officer and CDXO (Non-full time)
Naofumi Tsuchiya founded Goodpatch in 2011 and would go on tolead this company in supporting numerous companies, ranging
from start-ups to major corporations, through the development of
products grounded on its strengths in user interface and user
experience design. In 2020, Goodpatch was listed on the Mothers
market of the Tokyo Stock Exchange, becoming the first design
company to be listed on this exchange. Tsuchiya took up a position
as an executive officer at MARUI GROUP in June 2023.

71their preconceptions and reinvent themselves. I think that is a really great way tolook at things.
Tsuchiya: Transforming MARUI GROUP
on a fundamental level will require theemployees who work there to think andfind answers on their own. Muture will
support this process by providing methodologies, ideas, and feedback. In this
support, we will emphasize influencing
the corporate culture over the medium
to long term and updating one’s individual understanding.
Aoi: If our efforts are to become a success story, that will need to be a central
part of the process.
Tsuchiya: A relationship that is purely
based on projects involves producing
short-term results so that we can haveour contract renewed. A joint venture,meanwhile, is more like a marriage.
Aoi: That is a good way to put it.
Tsuchiya: Like a marriage, a joint venture
requires mutual commitment, not tomention a medium- to long-term perspective. This type of relationship thus
allows us to strike more at the heart ofan issue. For example, we have beenworking closely in the development of
MARUI GROUP’s OMEMIE store opening
support service over the past year, andwe have been prioritizing changes inindividuals and organizations in thisprocess. These efforts have yet totranslate to numerical changes in performance figures, but a change in people
will no doubt have an impact on performance down the line.
Aoi: A change in people is an indicator, asign, of changes to come. When employees are empowered, it gives me hope forour future.
Tsuchiya: I think we have witnessed arise in employee drive. You can see
people expressing the skills they want tohone and the type of employee theywant to become by committing to acertain business.
Aoi: If we find ourselves not knowing
what to do in existing businesses andnot being able to succeed even if we
adopt new rules or frameworks, it islikely that the underlying cause is issues
with our current ways of thinking or
corporate culture.
Tsuchiya: Updates to structures arenecessary for achieving fundamental
change. If we look at the EPOS app,for example, we will see that it is notenough merely to change the userinterface and make it more visuallyappealing. More structural changes tothings like the flow of decision-making
processes are crucial to making the appthat users want.
Aoi: I cannot help but acknowledge justhow great the difference in culture is
between people who have made theirliving by selling physical items andpeople who utilize digital technologies tosupply intangible services. However,I think that we are finding common
ground by explaining our ways of thinking to one another.
Tsuchiya: The process you describe
is one of the reasons I think the term
“enterprise agile” is so apt.
Process of Hypothesizing,Experimenting, and Creating Results
Aoi: As our material wealth grows, theidea of design is evolving from making
things more visually appealing to giving
rise to a type of design-oriented thinking.
Our efforts going forward will thus
include working together to shape adesign-oriented thinking approach while
incorporating the perspective of customers. Digital technologies will be

I think this endeavor has the potential for us to create somethingthat transcends the traditional value framework through which
improved performance drives increases in a company’s stock price.
Hiroshi Aoi

72

indispensable in fully entrenching the
new concept of design-oriented thinking
into our business, and software will be
the best tool for implementing thisconcept in its purest form. This is especially true considering how the experience offered by products, how theyenrich our lives, is becoming more
important than the physical products
themselves.
Tsuchiya: In today’s era of abundance,
whether an offering can win customer
favor and be desired will be determined bypeople’s emotions. For this reason, it willbe those companies that are tapped into
the emotions of people that will be able tosurvive. The degree to which a producthas been thought out and shaped bypassion is something that people who lovea given product can easily read. It comesout in the design. In this regard, I believethat MARUI GROUP has a culture ofinvesting in emotional value.
Aoi: MARUI GROUP is a company filledwith highly empathetic employees. To
effectively incorporate this empathy into
our business, however, we will needdigital technology expertise and experts
as well as an enterprise agile approach
toward organizational development.
The reason we invited you, Mr. Tsuchiya,
to become an executive officer at
MARUI GROUP while still serving as theCEO of a listed company is because weneeded someone with an intrinsic understanding of the enterprise agile approach.
An abstract understanding is notenough. If we don’t have someone withan entrenched understanding of theseconcepts and who is able to reproduce
them, we cannot hope to succeed intransforming our organization of some
5,000 people.
Tsuchiya: People on the front lines at
Muture are committed. However, thedifference in hierarchical level between
the front lines and management cancreate obstacles toward building amutual understanding. I therefore
thought that I could help smooth thingsout by taking part in management.
Aoi: Rather than our corporate culture,
I think the first target of our

It will be those companies that are tapped into the emotions ofpeople that will be able to survive. In this regard, I believe thatMARUI GROUP has a culture of investing in emotional value.
Naofumi Tsuchiyatransformation should be our structures.
We lack both expertise and experts inthe field of digital technologies. We alsoneed to reform the flow of decisionmaking processes. Our decision-making
frameworks retain their traditional
structure, which is centered on products.
Meanwhile, our organizations are vertically stratified by function. An enterpriseagile approach will be key to simultaneously resolving all of these issues. I
suspect that the result of our resolving
these issues will be a capacity to continue innovating. My goal is to make
MARUI GROUP such a company. To
accomplish this goal, we must transform our organization while also gaining
expertise on digital technologies andattracting experts in this field.
Tsuchiya: Some employees from MARUIGROUP are working at Muture, and they
let us know about the atmosphere at thiscompany. When delving down into thedetails, Muture uses MARUI GROUP’s
methods. When transforming things, it
acts like Goodpatch. Flexibly merging two
such different ways of doing things is anapproach the likes of which we havenever seen before. This is a big deal as,
when external consultants are involved,
there are often cases in which a company
can’t quite get to the end it needs.
Aoi: I have long been puzzled by the factthat our ability to formulate hypotheses
within MARUI GROUP has not been
improving. A hint to solving this puzzle
can be found in the enterprise agile
approach. Under this approach, anindividual is given an annual budget andexpected to use this to develop theirbusiness by thinking on their own. If one
is forced to experiment to create resultsin their work, rather than be handed theright answer by their boss, they will haveto be able to formulate hypotheses
themselves. However, if decision-making

processes are not transformed to reflect
this approach, a person will not be able
to apply hypotheses to their work, even if
they have learned how to become more
adept at formulating them. I understandthat digital transformation is a processthat runs parallel to our goal of developing a business that achieves earnings
growth while also contributing to theresolution of social issues.
Tsuchiya: The quandary faced by MARUIGROUP is one that is felt by quite a few
other companies. However, I think thatmany of these companies have falteredin their attempts to address this quandary either due to a lack of the necessary methodology or a self-defeating
attitude. That is why, when our experiment here succeeds, I want to write abook with you, Mr. Aoi. If we can offer
a concise explanation of our path tosuccess, we can surely contribute to
the happiness of a lot of people.
Aoi: I would love to see Japan becomea country in which even large organizations are able to change and foster
countless successful entrepreneurs.
However, people cannot innovate if they
do not embrace their emotions andsensibilities and unleash their creativity.
This is why digital and agile transformation is so important.
If we can change the Company, we
can create a situation in which people
are able to make a career of having a
positive impact on society based on
their preferences. This would allow
people to contribute to society while
unleashing their creativity in their work,
which I am sure would be a source of
happiness. I therefore want MARUIGROUP to function as a social experiment to show the world exactly how thiscan be achieved. I think this endeavor
has the potential for us to create something that transcends the traditional
value framework through which
improved performance drives increases
in a company’s stock price. Mr. Tsuchiya,
I am so happy to have you on board as
we chart our course toward this big
dream. We should definitely write a book
together once we get there.

73

Intangible Assets Driving Growth in MARUI GROUP’s Corporate Value
In addition to finances, real estate, and other tangible assets, companies also have intangible assets, like humancapital in the form of trust from customers or the happiness of employees, which are a type of invisible asset notfound on the balance sheet. Today, such intangible assets are becoming a powerful driver behind growth in thecorporate value and earnings of companies. In this section, MARUI GROUP CFO Hirotsugu Kato explains the reasons behind this phenomenon while also providing a look at the Company’s performance.
Target of PBR of 5 Times

CONTRIBUTIONS TOCORPORATE VALUEFUELED BY
INTANGIBLE ASSETS
CFO MESSAGE

H I R OT S U G U K AT O

Hirotsugu Kato
Director, Managing Executive Officer, and CFO
In charge of IR, Finance, Sustainability, and ESG Promotion
Kato joined the Company in 1987 and proceeded to gain experience in sales and credit card contracting at Marui stores and in
finance, accounting, and corporate planning at the head office
before becoming general manager of the Corporate Planning
Division in 2013. He took up the position of general manager of the
IR Department following its establishment in 2015. Later, Kato wasplaced in charge of ESG promotion in 2017 and then sustainability
in 2019, which was also when he assumed the position of CFO. As
general manager of the Corporate Planning Division, he has been
involved in overseeing investment in start-up companies since2015, which would eventually lead to his concurrent position aspresident of D2C & Co. Inc. in 2020. D2C & Co. is a company
established in 2020 with the goal of supporting the creation ofa direct-to-consumer ecosystem through investment in andcollaboration with direct-to-consumer start-up companies.

MARUI GROUP has put forth the target ofachieving a price-to-book ratio (PBR) of 5
times to guide its pursuit of higher corporate value. Based on trends in the
Company’s price earnings ratio, which
has historically been around 20 times,
accomplishing this target will require
return on equity (ROE) of 25%. I believe
that, in order to raise ROE from its current
level of around 10% to 25%, we will needto take full advantage of our humancapital and other intangible assets (seeFigure 1). Intangible assets represent
44% of market capitalization at MARUIGROUP and 32% of that of Nikkei 225

companies, both of which are significantly lower than the 90% seen for the
S&P 500 companies in the United States.
This could be because MARUI GROUP
and other Japanese companies are noteffectively utilizing their intangible assets
or because they are being used but themarket is not recognizing this fact. On theother hand, this situation could be framed
as representing the potential for thesecompanies to grow. Whatever the case,
MARUI GROUP plans to make greater useof intangible assets to raise the ratio ofthese assets to market capitalization to alevel of 80%, closer to that of U.S. companies, and thereby work toward its targetof a PBR of 5 times.

Figure 1: Corporate Value That We Aspire To

Figure 2-1: ROIC for Japanese Credit Card Companies

Current

I would now like to talk about MARUIGROUP’s approach toward utilizing
intangible assets by looking at theexample of our Fintech segment. In thefiscal year ended March 31, 2023, theFintech segment posted return on
invested capital (ROIC) of 5.0%. This is
an incredibly high level in comparison to
our peers (see Figure 2-1 and Figure2-2). Generally, the ROIC of capitalintensive financial businesses is around
1% to 2%. Our ROIC is thus 3 or 4 percentage points higher. I believe that thisdifference is a result of our utilizing ourintangible assets, rather than just our

5.0%

PBR 1.7 times
ROE 10%(Forecast for FY2024)(Current level)

1.2%

1.6%

1.6%

ROE 25%

PER 20 times

 arge portion of portfolio comprisingLbusinesses not dependent on balance
sheet, such as rent guarantees

Company B

Company C ow customer acquisition costs throughL
store cooperation, cards tailored to eachindividual’s interests, etc.

FuturePBR 5 times

Factors for high ROIC igh composition of interest-bearingH
debt and low ratio of bad debt write-offs

PER* 17 times

Intangible assets
Company A

MARUI GROUP’s
FintechFigure 2-2: ROIC Surpassing Operating Receivables Attributable to Intangible Assets* Price earnings ratio

Balance sheet

ROIC

Operatingreceivables

1.2%–1.6%

Other companies

74

Utilization of Intangible Assets

Intangible
assets

3.4%–3.8%

Returns from investments in human capitaland other intangible assets

Operatingreceivables

1.2%–1.6%

Returns from operating receivables, etc.

MARUI GROUP’s
Fintech75

financial capital. For example, we havebeen expanding businesses that bankon our creditability, as opposed to ourbalance sheet, like our rent guarantee
services business, while also maintaining low default rates, despite providing
credit cards to younger users. These
factors demonstrate the business benefits of utilizing the intangible asset thatis our core value—the co-creation of
creditability.

Figure 3-1: Breakdown of Human Capital Investment

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

¥4.5 billion¥5.5 billion

STEP 2: R&D expenses• Personnel expenses of new businesses• Personnel expenses of co-creative teams• Personnel expenses of seconded employees¥2.4 billion¥2.6 billion

STEP 1: Human resource investments• Education/training expenses• Participation in Medium-Term Management Visionary Committee/
projects/initiatives¥0.8 billion¥1.0 billion¥7.7 billion¥9.1 billion

STEP 3: Additional investments• Employees in first year of profession
change• Investment funding

Human capital
investment

Improvement of Corporate Value
through Expansion of Intangible Assets

Figure 3-2: Human Capital Investment as Share of Personnel Expenses
Given the aforementioned examples,
expanding our portfolio of intangible
assets will involve utilizing our uniqueexpertise to incorporate these assets
into businesses that utilize existing
non-current assets and financial capital.
We will also need to embrace the latest
technologies in order to create new
products and services. This approachshould also help us develop an organizational culture that is conducive to innovation and foster the type of digitally
proficient human resources we require,
which have both been defined as goalsof the human capital management
approach that we have incorporated
into our management strategies.
Accordingly, I believe that the acceleration of human capital management willin turn grow our intangible asset portfolio and thereby drive massive improvements in our corporate value.
Redefinition of Human Capital
Investments
Since 2017, MARUI GROUP has been
disclosing an amount for human capital
investments. This indicator, which isrecognized for managerial accounting
purposes, represents personnel
expenses, as defined for standard
accounting purposes, recorded in a

76

35%

Share of personnel expenses
22%¥12.0 billion¥7.7 billion

FY2022¥9.1 billion

FY2023given fiscal year that are not for tasks
related to operations but rather for tasks
expected to contribute to improvements
in future earnings. In the past, this has
mainly been for training expenses.
However, discussions related to personnel capital management at Board of
Directors’ meetings and other venues
have led to suggestions that we widen
the definition of human capital investments. Based on these suggestions, wechose to redefine human capital investments in 2022. In addition to training
expenses, the new definition for humancapital investments includes personnel
expenses related to new businesses,
which were previously treated as R&D
expenses, and personnel expenses for
employees in their first year after using
our intra-Group profession changesystem, which is an effective tool forreforming our organizational culture.

FY2024(Plan)FY2025(Plan)FY2026(Plan)

Under the new definition, human capital
investments amounted to ¥7.7 billion in
the fiscal year ended March 31, 2022, orroughly 22% of total personnel expenses.
We look to increase the amount of
human capital investments to ¥12.0
billion in the fiscal year ending March 31,
2026, which should be about 35% of
total personnel expenses. In otherwords, we aim to make it so that morethan one-third of the time employees
spend working at the Company is used
for creating future corporate value(see Figure 3-1 and Figure 3-2).
Returns from Human Capital
Investments
Ever since we began disclosing figures
for human capital investments, we havecontinued to receive questions about thereturns we can expect from theseinvestments and the timing at which wewill be able to quantify the benefits. I
therefore recognize that we cannot hopefor investors to accept our plan to raisehuman capital investments to accountfor 35% of personnel expenses if we do
not provide quantitative financial information, alongside qualitative information, to justify this decision. This is why
we sought to define the returns that will
be generated from human capital investments and performed a trial calculationof the associated capital efficiency togive a more concrete picture of ourhuman capital management approach.
Human capital investments are anticipated to augment our ability to create
unique new products and services. For
this reason, the returns from theseinvestments could be seen as the marginal profit generated by those products
and services. This view, however, presents another issue, namely, how todefine the timetable for those returns.
As human capital investments target theenhancement of our organizational andcorporate culture, the returns tend to berealized in the long term. Accordingly,
accurately measuring the capital efficiency of these investments and explaining the benefits requires a long-term
perspective, and we therefore had topreface our approach on this fact.
Efficiency of Human Capital
Investments
When attempting to measure the efficiency of human capital investments,
after defining what constitutes theirreturns, we were able to glean hints
about how to go about this from theapproach used by funds that invest in
start-ups. MARUI GROUP has been
investing in start-ups and funds since2017. We tend to invest at relatively
early stages of the businesses of therespective companies, which means

77

MARUI GROUP’s Governance Focused on Six Stakeholder Groups
Customersthat it can take quite a bit of time before
we start seeing returns. We thus realized that the timetable used to assess
returns from human capital investments
should be similar to that employed forstart-ups. Generally, funds use a timetable of 10 years from the process ofcommencing investments and thencollecting returns and ending the fund.
The first five years of this period areprimarily characterized by investment
while the last five years are whenreturns are collected. In the end, thefund will present its internal rate of
return (IRR) for the 10-year period.
Mirroring this approach, we chose toaggregate the investment amount overthe five-year period from the fiscal year
ended March 31, 2017, when we began
calculating and disclosing figures forhuman capital investments, to the fiscal
year ended March 31, 2021. The returns,
meanwhile, were calculated as the

projected marginal profit to be generated by the unique new products andservices created over the 10-year period
from the fiscal year ended March 31,
2017, to the fiscal year ending March 31,
2026. Based on these parameters, a trial
calculation on the returns from humancapital investments resulted in projected
returns of ¥56.0 billion from new products and services in the anime and otherbusinesses over the period leading up to
the fiscal year ending March 31, 2026.
Given that aggregate human capital
investments in the fiscal years ended
March 31, 2017 to 2021, totaled ¥32.0
billion, the IRR will be 12.7% (see Figure 4).
Expansion of Human Capital
Investments
The IRR of 12.7% for human capital
investments is projected to surpass ourshareholders’ equity costs, which meansthat these investments will contribute tocorporate value. It is also important tomention that this rate of return is above
the hurdle rate of 10% that we use forinvestments in tangible assets. MARUIGROUP intends to invest ¥40.0 billion intangible assets over the next five years.
These investments will primarily target
existing businesses to advance us
further down our current growth track.
As for human capital investments, whichfeature higher efficiency than investments in tangible assets, we plan toinvest ¥65.0 billion, about 1.6 times
more the amount for investments intangible assets. These investments are
anticipated to result in growth that ismuch greater than what would havebeen achieved on our current growth
track. I am confident that this will move
us closer to our target of a PBR of 5
times (see Figure 5).

Recovery period (FY2017 to FY2026)

April 2016

appointed as an internal director. The team also includes two new external directors—

March 2021

sentative for shareholders, and Peter David Pedersen, representative director of Next

FY2025(Target)FY2026(Target)

FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

Investment
amount

4.1

5.4

8.1

8.5

6.3

—

—

—

—

—

Income

0.1

0.4

1.5

2.6

3.4

4.7

6.2

8.6

12.4

15.9

start of a new approach toward governance with involvement from stakeholders.
This approach was adopted based on MARUI GROUP’s definition of corporate value
as being produced by creating harmony between the interests and happiness of all of its

Figure 5: Expansion of Human Capital Investment
Tangible investments

Intangible investments

Stores and facilities, etc.

Human capital investment

Hurdle rate IRR 10%

IRR 12.7%*

FY2024 to FY2028

FY2024 to FY2028

Investment amount ¥40.0 billion

Investment amount ¥65.0 billion

management* Calculate return on investment by considering marginal profits from the Company’s unique new businesses and services created through human capital
investment as returns (Investment period: FY2017 to FY2021; Recovery period: FY2017 to FY2026)

Employees

tions and views of stakeholders vary, and their areas of focus and interests can thus bein opposition. By embracing this conflict, we believe that we can reach solutions of a

Future generations

level of viability that could not be achieved with only members from within the Company.
We are confident that this approach will allow us to realize our desired impact.

Members of the New Board of Directors Including Stakeholders
Hiroshi Aoi

Chairman of the Board

Etsuko Okajima

President and Representative Director,
Representative Executive Officer, CEO
Chairman of Management Committee and Compliance Promotion
Board, Member of Nominating and Compensation Committee,
Sustainability Committee, Strategy Committee, and Human Resource
Strategy Committee

External Director

Hirotsugu Kato
Director, Managing Executive Officer, and CFO
Chairman of ESG Committee and Insider Trading Prevention Committee,
Member of Management Committee, Sustainability Committee, Strategy
Committee, Compliance Promotion Board, Public Relations IR
Committee, and Internal Control Committee
Reason for appointment: Hirotsugu Kato has overseen finance, investment research, sustainability, and ESG divisions and performed his duties properly as a managing executive officer of
the Company since 2016. Based on the above reasons, the Company believes that he can fully
perform his functions for facilitating the medium- to long-term improvement of the corporate
value of the Company.

Highly efficient

Communities
and Society

stakeholders and growing the intersection of these interests and happiness. The posi-

Reason for appointment: Yasunori Nakagami has accumulated a wealth of experience atmanagement consulting firms and investment management companies through which hehas amassed exceptional insight regarding corporate management that emphasizes capital
markets. The Company thus judged that he would be able to contribute to the supervision of
overall management from an independent and objective standpoint as an external director.

IRR 12.7%

Stakeholder
Value

Leaders’ Initiative for Sustainability and a sustainability expert. This move marked the

March 2026

FY2024(Forecast)Business
partners

Investors

Yasunori Nakagami, representative director and CEO of Misaki Capital Inc., and a repre-

Representative Director and CEO, Misaki Capital Inc.
External Director, Chairman of Strategy Committee,
Member of Nominating and Compensation Committee(Billions of yen)78

Directors. At this time, Reiko Kojima, company physician and well-being expert, wasYasunori Nakagami¥56.0 billion¥(32.0) billion

its six stakeholder groups in the truest sense by assembling a new team for the Board of

Reason for appointment: Hiroshi Aoi has properly overseen the Board of Directors as thechairman and duly performed his supervisory functions with regard to important management
decision-making and operational execution as the president and representative director of
the Company since 2005. He has ample business experience and knowledge as a corporate
manager and has overseen the overall operation of the Group and performed his duties properly
as the Group representative executive officer. Based on the above reasons, the Company
believes that he can fully perform his functions for facilitating the medium- to long-term
improvement of the corporate value of the Company.

Figure 4: MARUI GROUP’s View of Internal Rate of Return

Investment period (FY2017 to FY2021)

In June 2021, MARUI GROUP took its first step in practicing governance with a focus onExternal Director

President & CEO, ProNova Inc.
External Director, Member of Nominating and Compensation Committee,
Strategy Committee, and Human Resource Strategy Committee
Reason for appointment: Etsuko Okajima has experience and extensive knowledge related
to corporate management, human resource development, and start-up companies. She has
performed her duties as an external director of the Company properly by voicing questions andopinions from an objective, independent position. The Company believes that she can continue
to contribute to the reinforcement of the supervisory function for the management of theCompany.

Peter David Pedersen

External DirectorRepresentative Director, Next Leaders’ Initiative for Sustainability
Professor, Shizenkan University
External Director, Chairman of Sustainability Committee
Reason for appointment: Peter David Pedersen has accumulated a wealth of experience atenvironmental and CSR consulting firms through which he has amassed exceptional insight
regarding global-level sustainability management. The Company thus judged that he would be
able to contribute to the supervision of overall management from an independent and objective
standpoint as an external director.

Reiko KojimaDirector, Senior Executive Officer, and CWO (Chief Well-being Officer)
General Manager, Wellbeing Promotion Department
Company Physician
Member of Management Committee and Sustainability Committee
Reason for appointment: Reiko Kojima has robust experience as a general physician, a Doctorof Medicine, and a company physician and has performed her supervisory functions properlywith regard to important management decision-making and operational execution as a directorof the Company since 2021. She has performed her duties appropriately by promoting
well-being management aimed at ensuring greater happiness for people, organizations, andsociety as chief well-being officer (CWO) and a senior executive officer of the Company. Basedon the above reasons, the Company believes that she can fully perform her functions forfacilitating the medium- to long-term improvement of the corporate value of the Company.

Major Agenda Items Discussed at Meetings of the New Board of Directors (April–November 2023)• Appointment of new executive officers• Partial revision of articles of incorporation• Change to development system for lifestyle app• Distribution of MARUI GROUP stock to employees• Allocation of Co-Creation Management Academy
participants• Status of investment projects and holding ofunlisted securities• Status of cross-shareholdings and future measures• Performance and revision of women’s empowerment indexes• Sustainability Committee progress report• Evaluation of Board of Directors’ effectiveness andimprovement measures• Outlook and future measures for Fintech segment

79

MARUI GROUP’s Governance Focused on Six Stakeholder Groups

Corporate Governance System

Introduction of “Exercise of Corporate Philosophy” into Articles of Incorporation

The Board of Directors and the Company’s various committees engage in discussions that are not bound by previous conventions insearch of the strategies, organizational structures, and human resources that will be necessary for achieving MARUI GROUP’s three
impact goals. The Sustainability Committee has been chaired by Peter David Pedersen since November 2021. Also at this time, theStrategy Committee, which is chaired by Yasunori Nakagami, was established with the goal of examining medium- to long-term businessstrategies while directly incorporating the perspectives of shareholders and other investors. The Strategy Committee invites external
experts to take part in discussions as appropriate based on the given subject matter in order to delve deeper into business strategies
from a variety of perspectives. In addition, the Human Resource Strategy Committee was established in April 2022 to develop humanresource strategies that are linked to Groupwide management strategies. Coordination is pursued between the Strategy Committee andthe Human Resource Strategy Committee in order to accelerate governance with a focus on our six stakeholder groups and to facilitate
the generation of MARUI GROUP’s desired impact.
Ordinary General Meeting of Shareholders
Appoint / Dismiss

Advisory
Committees

Audit & Supervisory Board
Nominating and Compensation Committee
Sustainability Committee
Strategy Committee
Human Resource Strategy Committee

Select /Discharge

Appoint / Dismiss

Audit

Board of Directors

President
ReportReport / Advise
Report / Advise

ReportInstruct

Report / Advise
Report / Advise

Management Committee

Compliance Promotion Board
ReportInstructPublic Relations IR Committee, Internal Control Committee, ESG Committee, Information Security
Committee, Safety Control Committee, Insider Trading Prevention Committee

Human Resource Strategy Committee

Strategy Committee

Chairman

Tomoo Ishii, Senior Managing Executive Officer and CHRO*

ChairmanYasunori Nakagami, External Director

Members

Three internal/external directors/executive officers

Members

Four internal/external directors/executive officers

Purpose

PurposeEstablished in April 2022 to develop human resource strategies thatare linked to Groupwide management strategies and thereby
contribute to ongoing improvements in corporate value

Roles• Provision of advice regarding required human resources andhuman resource portfolio• Advisory of recruitment and development plans and humanresource systems

Established in November 2021 to discuss and examine strategies
from the perspective of shareholders and other investors in order toformulate strategies for developing businesses with future potential,
including those with high barriers to participation, and thereby
facilitate management emphasizing stakeholders

Coordination

Once every two months, in principle

Role• Provision of advice regarding medium- to long-term strategies

Meeting
frequency

Once every two months, in principle* CHRO (Chief Human Resources Officer)

Advisors
Masakazu Masujima
Partner, Mori Hamada & Matsumoto

Fintech Specialist

Engineering, Department of Technology Management for Innovation,

AI Specialist

Kyoko Ozawa
Member of Sustainability Committee

The University of Tokyo

University student

Masayoshi Suzuki

Sota Watanabe

Executive Vice President, BORDERLESS JAPAN CORPORATION

Social Specialist

Member of Sustainability Committee
Yoshiki Ishikawa
Doctor of Medicine; Preventative Medicine Researcher;
Representative Director, Well-being for Planet Earth Foundation

Committee Membershipwww.0101maruigroup.co.jp/pdf/
committee_members_en.pdf

80

Tomohiro Miyasaka
Venture Capitalist

Yutaka Matsuo
Head of Dept./Professor, Research into Artifacts, Center for

Newly Established Article 2. Exercise of
Corporate Philosophy
Through the exercise of its corporate philosophy of “continue evolving to better aid our customers” and “equate thedevelopment of our people with the development of ourcompany,” MARUI GROUP strives to fulfill its mission ofcontributing to the creation of an inclusive society thatoffers happiness to all.
By merging finance and retailing, the Company aspires toprovide economic enrichment as well as emotional enrichment in the form of happiness and to create a society inwhich everyone is able to obtain this happiness.
However, this important mission cannot be carried out by
the Company alone. Accordingly, an approach toward fulfilling this mission has been adopted entailing co-creation withcustomers, investors, communities and society, business
partners, and future generations.
By engaging in such co-creation management with stakeholders, MARUI GROUP works to create harmony between
the interests and happiness of all of its stakeholders while
generating earnings and contributing to the resolution ofsocial issues through its business.

Transcript of Board of Directors’ Discussion on the Revision of the Articles of Incorporation

Committee Structures and Purpose

Meeting
frequency

In 2023, MARUI GROUP declared its intent to evolve into a company that contributes to the resolution of social issues in order toachieve earnings growth while producing its desired impact. To
clearly present our unshakable vision and underscore the fact that
all of our business activities are based on our corporate philosophy, we revised our articles of incorporation to include the new
article of “Exercise of Corporate Philosophy.” The genesis of
discussions regarding this revision can be traced back to input
from the Sustainability Committee to the Board of Directors,
suggesting that such a revision could be examined as a way toillustrate MARUI GROUP’s stance and that it was necessary tosend a clear message regarding how the Company will produce
its desired impact going forward.
Following the revision, investors have voiced their support forthe move, with some saying that they agreed with the idea tointroduce a new article about a company’s corporate philosophy,
despite the fact that they were opposed to incorporating theUnited Nations Sustainable Development Goals (SDGs) into the
purpose section of the articles of incorporation due to the risk ofsuch goals impeding actual business decisions. Other comments
included expressions of praise for the concise move of introducing only this one new article and the proactive stance it represented as well as for the firm commitment to the corporate
philosophy that this new inclusion indicated.

VentureInvestment
Specialist
Sustainability
Specialist
PublicCEO, STAKE TECHNOLOGIES PTE. LTD.

Blockchain

Director, Japan Blockchain Association

Specialist

Well-being
Specialist

MARUI GROUP Corporate Governance Guidelineswww.0101maruigroup.co.jp/pdf/
cgg_20230509_en.pdf

Corporate Governance Reportwww.0101maruigroup.co.jp/pdf/
cgr_en.pdf

The following is an abridged transcript of a discussion by the Board of
Directors regarding the revision of the articles of incorporation that took
place across two meetings held in April and May 2023.
Okajima: Articles of incorporation are kind of like the “constitution” of acompany. Lately, we have been seeing a lot of change, and therefore I
thought that the purpose section would be getting more and more
ambiguous. The approach of putting the corporate philosophy before that
section will make things much easier to understand.
Nakagami: Companies use economic forces to address social issues. I
have said this in the past, but the approaches used for this purpose need
to be both serious and unique. Other companies seem to be trying to
make clear statements of what they see as serious social issues. This is
why I think it would be a good idea for the articles of incorporation to
include statements about the issues MARUI GROUP sees as serious andthe unique methods through which it is approaching these issues.
Okajima: It might be prudent to offer a few more details on the conceptsof happiness and inclusivity that MARUI GROUP advocates. Too muchdetail, however, will limit the scope of these concepts, which might beproblematic for a constitution. At the same time, if the concepts are too
abstract, it will be unclear exactly what MARUI GROUP is about.
Aoi: In the new article, we explain our corporate philosophy by looking at,in this order, our mission, the purpose of our business; our approach
toward co-creation, how we fulfill this purpose and the unique method
through which we will tackle issues; and our goal of creating harmony
between the interests and happiness of stakeholders, the result of thisapproach. The issues we see as serious are those that we can get to theheart of by proposing alternative forms of consumption and new lifestyles through our retailing and fintech businesses. Happiness andArticles of Incorporation
www.0101maruigroup.co.jp/en/ir/pdf/articles/articles_en.pdf

inclusivity are keywords for this endeavor. The concept of inclusivity
indirectly refers to our belief that individual happiness cannot be achieved
if we do not make everyone happy.
Nakagami: How to accommodate everyone is a key issue for MARUIGROUP. It therefore might be smart to express how retailing and financeare its tools for addressing this issue. Just saying that you will address
this issue through your business is too vague.
Pedersen: This revision to the articles of incorporation is an incredibly
meaningful way of indicating MARUI GROUP’s stance, not just for external stakeholders but also for internal stakeholders like employees.
Including the words “retailing” and “finance” will no doubt resonate with
employees.
Aoi: I think you are right. Our approach of merging retailing and finance issomething that is unique to MARUI GROUP, and we should definitely putthat into words. Let’s make that change.

Discussion at Board of Directors’ meeting

IMPACT BOOK 2023
www.0101maruigroup.co.jp/en/ir/pdf/impactbook/2023/impactbook_all.pdf

81Our Flow Experiences

MARUI GROUP’s Governance Focused on Six Stakeholder Groups

The following messages were written prior to October 2023.
All costumes and items pictured are the personal belongings of the individual in question.

Target of PBR of 5 Times
Although MARUI GROUP has declared its intent to evolve into a
company that contributes to the resolution of social issues, theCompany is committed to avoiding negative impacts to its growthand capital efficiency because of its priority to generating its
desired impact. Our goal is to achieve earnings growth while
producing the impact we desire. We aim to increase profit margins and corporate value by continuously developing businesses
oriented toward the resolution of social issues and by allowing
employees to exercise their creativity through the expansion ofhuman capital investments. Both of these approaches involve
investments in intangible assets that do not appear on the balance sheet and thus present the potential for high capitalefficiency.
MARUI GROUP has set the target of a price-to-book ratio (PBR)
of 5 times, which should be achievable by realizing return on
equity (ROE) of 25% and a price earnings ratio (PER) of 20 times.
We are actively discussing the appropriate approach for pursuingthis lofty goal.

Transcript of Strategy Committee’s Discussion on the Target of PBR of 5 Times
The following is an abridged transcript of a discussion by the Strategy
Committee regarding the target of a PBR of 5 times that took place inDecember 2022.
Nakagami: There is likely a strong correlation between a company’s ratio
of intangible assets and its PBR. MARUI GROUP produces ROE of around
8% with a PER of 20 times, which should make for a PBR of about 1.8
times. Meanwhile, intellectual creation companies tend to have PBRs ofaround 5 times. PBR is arrived at by multiplying ROE by PER, and ROE
comprises net profit margin (NPM), asset turnover, and leverage. PER,
meanwhile, is thought to represent the amount of anticipation toward acompany’s growth. The basic logic behind the indicator is that a company
with low risk and the ability to grow should have a higher PER. Growth, intheory, should be represented by the dividend growth rate, while risk canbe measured as the cost of capital. If you want to achieve a PBR of
5 times, you will need a PER of 25 times and ROE of 20%.* As MARUIGROUP’s business is not dependent on its balance sheet, there is room topush up the leverage ratio a bit. This could lead to a significant increase in
asset turnover.
Aoi: Our transition from labor-intensive retailing operations to a capitalintensive fintech business resulted in an increase in operating income per
employee. By transforming MARUI GROUP into an intellectual creationcompany, we look to raise operating income per employee even further.
This should drive growth in both ROE and return on invested capital. In
the past, we have been successful in boosting ROE by raising leverage.
Meanwhile, total assets have been on the rise, leading to flat growth inasset turnover.
Nakagami: It is important to think about the type of frameworks thatwill contribute to high levels of ROE. It might not be necessary to raiseleverage too much, but there is a need for significant increases in NPM
and asset turnover. When it comes to PER, the denominator in theequation is cost of capital minus dividend growth rate. A capital-intensive
business will generally entail higher risks, but an intellectual creationcompany might be able to limit this increase. As we think about the targetof a PBR of 5 times, we should remain cognizant of the basic mechanism
through which this will be achieved, ROE multiplied by PER.

Aoi: We need to assess the situation based on uncertain future performance figures as well as on the actual situation related to our people,
workstyles, and business. I want to make sure that we take this approach.
Nakagami: As for the framework for raising ROE from 8% to 20%, a good
example might be leverage of 3.5 times, NPM of 20%, and asset turnoverof 0.3 times, which would make for ROE of 21%. Getting a PER of 25
times could be accomplished by increasing the dividend growth rate by 1
percentage point, to 5%, while keeping cost of capital at 9%. There might
be a need to verify the figure of 5% for the dividend growth rate.
Nevertheless, I think that a PER in the 20s is well within the range ofpossibilities for a steadily growing company.
Aoi: PER tends to be influenced by industry averages and standards set
by analysts. This is why it is important for companies to present themarket with explanations of the logic behind their estimates. The fact thatthings which count as traditional business models are becoming less andless common is true of any business or market. This is why we need tomake proposals prefaced on this fact.

President and Representative Director, Representative Executive Officer, CEO
President and Representative Director, okos Co., Ltd.
Director, D2C & Co. Inc.
Director, Muture Corporation
Management Committee (Chairman)
Compliance Promotion Board (Chairman)

I have always loved to tackle new challenges, even when I was a kid, and I have tried alot over the years. Right now, I am hooked on singing. I have even gone as far as to hirea professional coach, who is helping me practice an opera aria. Opera is a deep andcomplicated art, and this makes it all the more engaging. I don’t just love the artistic
element of it; I also love its unexpected physical benefits, like how you train your muscles to make your entire body an instrument. The fun of opera is how you are able totake on the role of the protagonist to experience a different personality and world. I canforget myself and lose all track of time as I really get into the flow. At the moment, I
mainly find myself singing the songs of princes and artists, but I hope to try out thesong of some Svengali or Machiavellian elder in the future.

E __Etsuko Okajima

External Director
President & CEO, ProNova Inc.

I am totally into the boy band BE:FIRST. I have gone beyond being a fan of a particularartist or group to become a fan of the BMSG production company itself. I get to experience a true state of flow for nearly five hours at a BMSG event. I also love auditionshows and watch pretty much every audition show out of Japan or Korea. BE:FIRST
was assembled through an audition show called THE FIRST, and I have watched all 20
episodes of the show over five times or so. My day job is to identify and develop
management candidates and future leaders, and the methods I use to recognize thatkind of potential are pretty much the same as those used in audition shows. I can really
understand the questions and feedback voiced by SKY-HI, the organizer of many ofthese shows. In fact, I even went as far as to tell him that I say the same things. When I
get to see the high-potential individuals I have discovered undergo a major transformation, I get to experience flow. I love seeking out such diamonds in the rough and watching them learn to shine.

* Later discussion led to the decision to target a PER of 20 times and ROE of 25%.

Operating income per
employee (salary)
Dividend
Intellectual
creation
RetailWeighted
averagecost of capitalWhiteboard used by External Director Nakagami and others at the meeting

Lively Debates at Directors’ Retreat
MARUI GROUP has been arranging annual retreats attended by all internal and external directors
since 2022. These retreats are opportunities for in-depth discussion on medium- to long-term
strategies and on the messages to be communicated at financial results briefings and MARUI IR
DAY events. Moving discussions to a location with a different atmosphere allows attendees to get
down to the issues that cannot be addressed in regular discussions, which can sometimes result in
lively debates and the sharing of frank opinions. The second such retreat, which was held in April
2023, saw the directors sharing their hopes for the future in which MARUI GROUP is producing its
desired impact, which included External Director Pedersen singing a song he had written to express
his thoughts about the future and sustainability.

82

H __Hiroshi Aoi

Y __Yasunori Nakagami

External Director
Strategy Committee (Chairman)
Representative Director and CEO, Misaki Capital Inc.

Attendees at second directors’ retreat

I get into a flow from the thrill of surfing, a hobby I love despite not being particularly
good at it. Whether under the scorching summer sun or in the blistering cold of winter, I
am always happy to head to the beach. This is all because I am addicted to the feelingof riding the waves. For a city dweller, the beach itself is an exciting break from everyday routine, and the experience of riding the waves at the beach is a special one that
can’t be found anywhere else. Knowing that I can later escape my everyday life to havethis experience is what allows me to keep focused on my work in the city. I love surfing,
though I do need to get a little better!
83

Our Flow Experiences

p __Peter David Pedersen

External Director
Sustainability Committee (Chairman)
Professor, Graduate School of Leadership and Innovation, Shizenkan University
Representative Director, Next Leaders’ Initiative for Sustainability

H __Hitoshi Kawai

I experience flow when I am so absorbed in my work or hobbies that I forget myself
completely and just keep moving forward. At work, for example, the stories I want toshare at a lecture or seminar will just come pouring out, without me having to put any
particular effort into it. It is not as if I am really thinking about what to say; the words I
need just come out by themselves. I also experience this type of flow state when I am
painting, my style being a clumsy take on watercolor painting that resembles oil painting. When I get into this state, I lose track of time and the painting just ends up getting
done, without me worrying about the shapes or colors or even about the quality of thepainting. There is probably no one correct answer about what produces this state.
However, I think the basic conditions for this state lie in loving a particular activity andhaving a certain degree of skill in it. Of course, there is some overlap between flow andthe Ikigai model that has become known around the world. Also, if you are looking toexperience flow in business or at work, you will also need to respond to social needs
and have a way to make money.

Audit & Supervisory Board Member (Full time)

I have loved to run ever since I was a kid, and I’ve been going on runs once or twice aweek since I graduated from university. Not only does working up a sweat leave me
feeling refreshed, I also come up with a lot of good ideas while running. Furthermore,when I am trying to meet a strict time goal, I am able to focus and lose track of myself.
It’s at times like these that I am able to come up with the type of ideas that I couldn’t
find elsewhere, and when I get into the flow and just keep running, it is refreshing for
my mind. However, those ideas start to fade as soon as I stop running, and I sometimes find myself feeling anxious trying to remember what I was thinking about.
This is when I turn to my tradition of a post-run glass of tomato juice, which leaves
me refreshed and looking forward to my next run and new idea.

H __Hirotsugu Kato

Director, Managing Executive Officer, and CFO
In charge of IR, Finance, Sustainability, and ESG Promotion
President and Representative Director, D2C & Co. Inc.
Director, MARUI CO., LTD.
Director, tsumiki Co., Ltd.
Director, okos Co., Ltd.
ESG Committee and Insider Trading Prevention Committee (Chairman)

My latest obsession is saunas. I used to have almost no experience with saunas. A
couple of years ago, however, I started going out to meals with young entrepreneurs,
and I remember feeling left out by not being able to get in on the conversation when it
came to saunas. It was at this time that I learned of a new sauna near my house. I
finally got up the courage to go around the end of last year. Experiencing a sauna is acycle of feeling hot, feeling cold, and feeling drained. You have nothing to do but thinkduring this process, and I was surprised to learn just how sharp my focus became at
the sauna. This intense focus is probably what you would call a flow experience. I
suspect that one of these days this focus will lead me to an idea that will shock theworld; at least I hope it will.

R __Reiko Kojima

Director, Senior Executive Officer, and CWO (Chief Well-being Officer)
General Manager, Wellbeing Promotion Department
Company Physician

Between my three years at high school and my six years at medical school, I have been
in a choir for nine years. My high school had a storied history of winning nationwide
choral contests, and I remember the extensive training we would do in the morning,
after lunch, in the evening, and on retreats. The experience of getting lost in song withthe other members, the nervousness felt on the day of competitions, and the time
rejoicing or lamenting the results and expressing our appreciation to one another are
all precious memories. I became the head of the choir at medical school. In this role,
I would find myself discussing our greater goals with members, getting help fromformer members and teachers, and arranging massive concerts. The process oforganizing support teams to help members who could not yet read music and talking
with members to help keep them motivated is what made me so committed to ensuring that everyone feels energized in what they do. This commitment stays with meeven in my work today. I still sometimes meet with my old choir friends to sing. The
time we spend lost in our melodies is truly a happy time.
84

H __Hajime Sasaki

Audit & Supervisory Board Member (Full time)

I made my surfing debut two years ago, when I was 57. I am still a beginner, but I havepracticed a ton and am now able to stay on the board. It was the feeling of gliding
across a good wave that got me hooked. It is kind of difficult to put into words, but
I keep at it because I love that special feeling when you are soaring on a wave. The
challenge of surfing comes from how the waves and wind are different every time andhow the conditions are always changing. More than using your muscles, you need theability to adapt flexibly. It didn’t take me long to learn that; if you can’t adapt, you won’t
be able to control your board. We could even say the same of the current operating
environment.

Y __Yoko Suzuki

External Audit & Supervisory Board Member
Partner, Suzuki Sogo Law Office

It was not long after I became a lawyer that I went with my husband to see a production of THE LION KING by Shiki Theatre Company, and now watching musicals is ahobby we both share. The musical I have gotten the most into is MAMMA MIA!, a storyof love, friendship, and the bond between a mother and daughter set to the songs of
ABBA. I have been going to see this musical in theaters for two decades now. When I
first saw it, I shared the perspective of the daughter. After my own daughter was born,
I was able to laugh and cry to the musical from the perspective of a mother. From thediverse lives shown by the youths in a chorus line to the proud and distinctive catsliving in the street and the strong yet kind princesses illuminating the stage, I become
enthralled by the magic of the songs and dances of musicals. They truly energize andempower me and make me want to start something new.
85

Our Flow Experiences

Y __Yoshinori Saito

External Audit & Supervisory Board Member
Tax Accountant, Hiroaki Matsumoto Certified Tax Accountant Office

Managing Executive Officer
In charge of Fintech BusinessPresident and Representative Director, Epos Card Co., Ltd.
Director, MRI Co., Ltd.
Director, Epos Small Amount and Short Term Insurance Co., Ltd.
Director, tsumiki Co., Ltd.

I experience flow in my home garden. I have been gardening for more than a decade,and my garden is now filled year-round with small plots of a wide variety of vegetables,
ranging from daikons and napa cabbages to spinach, carrots, cucumbers, tomatoes,
corn, eggplants, bell peppers, and potatoes. Today, I have brought with me an eggplant,
which is in season now (at time of photograph). There is so much to do and no time towait, whether the task at hand be preparing the soil, sowing seeds, thinning, transplanting, or weeding. When I lose myself in these tasks, I often find myself in a peculiar state
where time evaporates and I feel at one with the task and with the soil. Gardening canbe exhausting, but it leaves me feeling refreshed. Also, the fact that my garden makes
my life a little more sustainable gives me the energy I need for the next day.

Golf is without a doubt a popular hobby. Based on my experience, there seem to bequite a few golfers at MARUI GROUP. Golf lets you get a sensible amount of exercise
while also providing important opportunities for networking with colleagues andassociates outside the Company. I generally don’t experience a flow state outside ofwork, but when I am golfing, people often tell me how impressed they are with myintense focus while putting. The moment when the surrounding sights and sounds
fade away and I am able to turn my full attention toward the hole is precisely what you
would call a state of flow. The right clubs are also an important part of golf. I haveactually gone through more than 10 putters before I found the right one. With myfavorite Piretti, I hope to start shooting more scores in the 70s.

H __Hiroaki Matsumoto

M __Masao Nakamura

M __Masahiro Aono

I started cooking back when I was still in school, and I have been at it for more than four
decades now. I love to eat, and whenever I find a dish I like, I find myself compelled toreproduce it. With my trusty kitchen knife in hand, I will attempt to make anything fromdried horse mackerel dishes to roast beef and even traditional Japanese New Year’s
delicacies. When I am cooking, I enter into a state of flow in which I am fully relaxed while
being able to unleash my creativity. The time I spend focused on cooking is the easiest
way I can experience a sense of self-actualization and an important part of my personalfulfillment. Cooking is like business, there are unlimited possibilities to be found throughdifferent combinations of ingredients, seasonings, and preparation methods. I enjoy thecooking, the eating, the drinks I pair with the dishes, and the smiles of family and friends I
share these meals with. I love cooking for all the joy it brings me.

I don’t drink, but I still love company parties. Such parties have become a rarity of late.
They were on the decline even before the COVID-19 pandemic, but the pandemic prettymuch put an end to them altogether. I used to go to these parties once every twomonths or so. We had farewell parties, welcome parties, and year-end parties. Our
company even had sports events, festivals, and field trips, which entailed parties. I still
try to arrange company parties for those people who are interested. This year, for example, I got around 100 people to attend an event in which we walked 20 kilometers to a
hot spring, where we had a party. I love talking with people as well as the process ofplanning parties, finding attendees, and performing to make the party more fun. I get into
a flow when I try to get as many smiles as I can. Today, I dressed up as Nobita, a character from the children’s TV program Doraemon, and wore this costume at our Halloween
party. We had a group of more than 10, all dressed as Nobita, walking the streets ofNakano, the area around MARUI GROUP’s head office, on the day of that party.

Managing Executive Officer
In charge of Retailing BusinessPresident and Representative Director, MARUI CO., LTD.
Safety Control Committee (Chairman)

Senior Managing Executive Officer and CSO (Chief Security Officer)
In charge of Corporate Real Estate, Architecture
President and Representative Director, MARUI HOME SERVICE Co., Ltd.
President and Representative Director, MARUI HOME SERVICE MANAGEMENT Co., Ltd.
Internal Control Committee (Chairman)
Information Security Committee (Chairman)

T __Tomoo Ishii

Senior Managing Executive Officer and CHRO (Chief Human Resources Officer)
In charge of General Affairs, Personnel, Audit, and Well-being Promotion
Human Resource Strategy Committee (Chairman)
Public Relations IR Committee (Chairman)

I have two toy poodles at home. I often take them on drives and to dog parks. In the nine
years since I got my dogs, I have searched for hotels that allow dogs whenever we take atrip. Outings with my dogs give me a feeling of excitement that I can’t feel every day. I
bought them their own car seats online so that my wife wouldn’t have to watch them inthe back seat while I was left alone in the front to drive, which could be a little stressful attimes. Riku (pictured) is less active, and he will usually just watch me drive from thepassenger seat or even fall asleep. He is so cute; I just forget all feelings of exhaustion
both on the way to and from our excursions, and actually experience a state of exuberance and deep focus. Is that flow? I also experience a state of flow when I am weighttraining, but I thought I would present a different image for this year’s message.
86

A __Akikazu Aida

Managing Executive Officer, CDO (Chief Digital Officer), and General Manager, Digital Transformation Office
In charge of Corporate Planning, Co-Creation with Future Generations, Co-Creative Investment
Director, D2C & Co. Inc.
Director, okos Co., Ltd.
Director, Muture Corporation

My everyday source of strength is working out at the gym, which is essentially a seriesof flow states. Working out with the goal of feeling the joy of surpassing my limits andclearing my mind to focus on my breathing, rather than on boosting my physicalcondition, is itself a flow state. Losing myself in concentration leaves me feelingrefreshed and mentally fulfilled. I think of myself as being a cheerful, optimistic, andstraightforward person. As such, having a change of pace like this makes it easier forme to enjoy things. At the same time, I tend to get tired of things quickly and amalways seeking new sources of stimulation. I am also a people lover and enjoy being
able to interact with a diverse range of people. This is why I am so dedicated to engaging in co-creation with various people to generate value for the betterment of society.
87Our Flow Experiences

Y __Yuko Ito

T __Takeshi Ebihara

Executive Officer in charge of Group Design Center
President and Representative Director, AIM CREATE CO., LTD.
Director, MARUI CO., LTD.

Senior Executive Officer and CIO (Chief Information Officer)
President and Representative Director, M & C SYSTEMS CO., LTD.
Director, Muture Corporation

In a world where it seems like you can do almost anything digitally, I experience a stateof flow when I’m on the side of a mountain actually exposed to the elements. When I
was still at school, I remember being moved by Yasushi Inoue’s novel Hyoheki (“Wall ofIce”). Inspired by this story, I set out for Karasawa Cirque in the heart of the Japan Alps
without even stopping to get the right equipment. The sense of exhilaration I felt as I
faced this rocky behemoth amid the snowy valley, set against the backdrop of a bluesky, had to be what you call flow. This was the start of my love affair with mountains. I
have scaled numerous peaks, from my local mountain to 3,000-meter giants in the
Northern Japan Alps. Even if I start to feel the effects of a strenuous climb, the hunger I
have for the fresh mountain air will always drive me to the peak. The invigorating senseof accomplishment and one-of-a-kind scenery are the greatest reward. I can also say
the same for when I am presented with a work project that I can really get absorbed in.

One thing that I really get immersed in is net fishing for ayu sweetfish. When I was akid, my dad would often take me out to the river. When net fishing, I try to enter the river
without making a noise and then focus only on casting my net in the quiet river, punctuated only by the sound of water. The feeling of anxiousness about whether I willcatch a fish the moment I cast my net into the water brings me into a state of flow.
I have been net fishing for a number of years, and I have come to learn the type ofplaces where sweetfish like to hide. I absorbed this knowledge through the series ofsuccesses and failures that has been my fishing career, but I cannot be completely
sure of the accuracy of this knowledge. I want to use the level of concentration I
experience when fishing to contribute to improved corporate value for MARUI GROUP.

M __Mayuki Igayama

N __Naofumi Tsuchiya

Executive Officer
President and Representative Director, MOVING CO., LTD.

Executive Officer and CDXO (Chief Digital Transformation Officer) (Non-full time)
Representative Director and CEO, Goodpatch Inc.
Director, Muture Corporation

I grew up on manga. The various manga I read in my adolescence no doubt played amajor role in making me the type of person I am today. Slam Dunk, in particular, could
be said to be my personal bible. When I want to raise my motivation for work or prepare
for a major project at work, I pick up this legendary manga and reread the part about the
big game against Sannoh High, the undefeated national champion. It was Slam Dunk
that taught me to never give up and to persevere to the very end, no matter how muchthe odds are stacked against me. At work, I constantly find myself thinking about Coach
Anzai’s famous line: “When you give up, that’s when the game is over.” I have alreadyseen the Slam Dunk movie that came out this year a ton of times. For what it’s worth,though, I wasn’t on the basketball team at school.

After joining the workforce, I got hooked on skiing. When I was a kid, I liked snow
mounds and fresh snow. Today, I set targets for the number of full runs I can do down
a mountain, from its peak to its foot, in a single day. I can clear massive courses withlengths of more than five kilometers and elevation differences of over 800 meters, like
Hakuba and Myoko, in about 10 minutes. Clearing my goals requires me to find themost comfortable position by using both my muscles and bones, and this position is
aways changing based on the snow condition or slope. If I am off balance, it can placepressure on my thighs. Sometimes, extending my knees will let me find the best
position. In this manner, I focus on interpreting the feedback between my bones andthe snow, and nothing beats the feeling of accomplishment when I reach the bottom.
Every year, the distance and the number of runs I can ski increases. This makes me
feel that I can continue to grow and evolve, no matter how old I get, as long as I makethe effort.

T __Tatsuo Niitsu
M __Masahisa Aoki
Executive Officer
CEO, tsumiki Co., Ltd.

I have loved motorcycles since the age of 17, and I am 54 now. Motorcycles are lesscomplete than cars, having only two wheels, and this means that they are most stable
when accelerating on a straightaway or a curve. The weakest level of stability occurs
when cruising at low speeds. As such, riding involves quickly accelerating from a stop,
having the courage to slow down before a dangerous curve, and checking that it is safe
before accelerating again. Of course, you have to do all of this while following the rulesof the road. There is a lot of overlap between this process and my job, like when it
comes to developing new businesses. No matter how old I get, I want to keep accelerating and evolving, going full speed whether at work or on the road, to live up to theaspirations of my younger self.
88

Executive Officer
Director and General Manager, E-Commerce Business Department, MARUI CO., LTD.
Director, MOVING CO., LTD.
Director, okos Co., Ltd.

My hobby is travel. I particularly like to travel to different countries. After the start of
the COVID-19 pandemic, however, my travels have been limited to Japan, but this has
provided me with an opportunity to reconnect with the beauty of this country. In thepast couple of years, I have visited Okinawa, southern Kyushu, Shimane, Hiroshima,
Yamaguchi, Kusatsu, and Hokkaido, and even have taken a trip around Shikoku. WhenI am on a trip, I try to find things I can get immersed in. In the past, this has included
diving in Okinawa, visiting art and other museums, and touring shrines and temples.
What I get most lost in, though, is planning my trips. Researching online where I want
to go and deciding how to get the most out of a trip in the least amount of time reallygets the dopamine flowing. I remember having a lot of fun adjusting my plans toinclude a trip around Shikoku when heavy snowfall in the Chugoku region forced me tocancel my plans to go there. Not only that, the scenery I saw in Shikoku was amazing,
truly making it a trip to remember.
89

Our Flow Experiences

A __Ayumi Hiromatsu

Executive Officer
Director and General Manager, Digital Promotion Department, M & C SYSTEMS CO., LTD.
Director, Epos Card Co., Ltd.

My love for horses inspired me to take up horse riding around when I was 30. Horseriding lets me feel a sense of improvement that can only be found in sports. I am alsoable to become immersed in the emotionally invigorating act of taking care of horses
while feeling their gentle gaze and in the sensation of riding. When I got to cantering, it
was even more fun. I experience a feeling of liberation when galloping across an open
plain or along the coast. Once, when I was galloping toward the horizon in Mongolia, I
was filled with a desire to continue riding headlong to the ends of the earth. It was such
an amazing feeling of immersion and liberation, exactly what you might call flow.
Horses are sensitive creatures, and they are able to detect and respond to our feelings.
This is why I really recommend horse riding to anyone who wants a sport that leaves
them feeling emotionally refreshed.

Y __Yuko Shiota

Executive Officer and General Manager, Sustainability Department and ESG Promotion Department

I experienced flow during the process of launching the Kesou brand. Our team started
from scratch, working for two years to create the world’s most sustainable shoes. There
were days when it felt like we had lost more progress than we had gained. Nevertheless,I continued to think about Kesou every day, becoming completely obsessed with thebrand. It was thus all the more moving when we had finally launched the brand, andcustomers starting buying the shoes and giving us messages of approval. I remember
the frustration felt when the COVID-19 pandemic delayed our shipping the brand andthe sense of appreciation for the customers who supported us regardless. I was able
to experience the full spectrum of emotions through the process of developing Kesou.
As a result, I now feel like I can keep going no matter what life throws at me. I do notexperience a state of flow in my daily life, but I think it’s a great thing to be able toexperience such a state at work, where we spend so much of our time.

J __Jiro Ishioka

A __Atsushi Nagasao

Executive Officer
Director and General Manager, Sales Planning Division, MARUI CO., LTD.
Director, Epos Card Co., Ltd.

Executive Officer and General Manager, Corporate Planning Division
Director, AIM CREATE CO., LTD.

I love basketball, and I have been playing it since junior high. I especially love making
three-point shots. When I make one shot, it’s a really good feeling, but when I sink fiveor six in a row, that is when I experience true exhilaration that makes me oblivious to
the sounds around me. The more I succeed, the better I feel and the more motivated I
am to pursue further success. I can’t help but wonder if this feeling is a flow state. I
have always been the type of person who searches for ways to enjoy even the mostchallenging tasks, and this commitment to enjoyment drives me to seek results. I
might even say the feeling of enjoyment I get from success is a flow experience for me.
I want to continue to tackle various new challenges so that I can also experience new
types of enjoyment.

T __Takahiro Matsumoto

T __Takeaki Yamane

I remember letting out a roar of excitement when Japan secured a ticket to the 2024
Paris Olympic Games at the FIBA Basketball World Cup 2023. I tend not to get overly
excited about things, but basketball has always been an exception. I have never experienced a more overwhelming state of flow after scoring a series of baskets and feeling
unstoppable, but I do sometimes experience more down-to-earth flow states, like being
able to jump a bit higher than usual on occasion. My flow states tend to have acommon trigger: having fun despite struggling to pull ahead in a close game. The samegoes for work; even when I feel behind without a clear path to success, I am still enjoying myself on some level. I hope to continue to enjoy the sense of pressure and tension
as I contribute to improvements in MARUI GROUP’s corporate value.

I am hooked on camping. My favorite things about camping are pitching the tent,sitting by the campfire at night, and drinking my morning coffee, in that order. Pitching
the tent is probably the part of camping that is most similar to experiencing a flow
state, which involves losing track of oneself and time moving more quickly. The firstthing you do when you get to a campsite is to set up the tent, and I go about this taskwith a sense of exhilaration, energized by the fact that I have just arrived at camp. If I
succeed in pitching the tent in a visually appealing manner, without any unsightly
creases, I can enjoy that sight throughout the duration of my time at camp. This is why
I devote such attention to the tent. If I don’t get it right, I will often reposition the frameand start over. The more I do this, the better I get. It brings me great joy when people
praise how good I have gotten lately at pitching a tent.

Executive Officer
General Manager, General Affairs Division
Director, MARUI FACILITIES Co., Ltd.

90

On days off, I frequent public baths and hot springs, and I love to soak in the open sky
while enjoying outdoor baths. Gazing at the sky is not something I normally have theopportunity to do, but when I am able to relax and look up, I start to feel like the sky is
actually really close or that the clouds are moving at incredible speeds. My gears tend
to be turning quite a bit when this happens, and it is not uncommon for an idea tosuddenly pop into my head that solves a problem that has been troubling me for quite
some time. When I have the time, I can spend hours in the bath, and I always lookforward to a beer after the bath. Lately, I have been getting into craft beer, and I keep astock of beers of different tastes at all times. I do admit, though, that drinking after
exercising might be the better idea!

Executive Officer, Project A Product Owner
Director and General Manager, Fintech Business Department, Epos Card Co., Ltd.

91

Officer Skill Matrix

For information on officer backgrounds, please refer to thefollowing website.
www.0101maruigroup.co.jp/en/ci/officer/

CliftonStrengths®

92

Investments instart-up companies

Audit & Supervisory Board Member (Full time)

New businessdevelopment

Hitoshi Kawai

FintechDirector, Senior Executive Officer, and CWO (Chief Well-being
Officer)

Retailing

Reiko Kojima

Digitaltransformation

Director, Managing Executive Officer, and CFO

Well-being

Hirotsugu Kato

Sustainability

External Director

Innovation

Peter David Pedersen

Risk management

External Director©2021 Gallup, Inc. Unauthorized reproduction and replication is prohibited. Gallup®, StrengthsFinder®, CliftonStrengthsFinder®, and thenames of the 34 CliftonStrengths® are trademarks of Gallup, Inc.

Unique Skills
Corporate
governanceYasunori Nakagami

Finances

External Director

Human resource
management

Etsuko Okajima

Management
strategy
formulation

President and Representative Director, Representative Executive
Officer, CEO

Corporate
management

Domain of Overall
Strengths: Top 5

Hiroshi Aoi

Shared Skills

For information on CliftonStrengths®, please refer to the following website.
www.gallup.com/cliftonstrengths/en/253715/34-cliftonstrengths-themes.aspx

Basis for Skills

1. Futuristic
2. Ideation
3. Learner
4. Belief
5. Individualization• Corporate management: Experience as president and representative director (April 2005 to present)• Management strategy formulation: Involvement in corporate planning since prior to becoming president and representative director and in formulation of medium-term management plans collectively encompassing period spanning from 2014 to 2026 as president and representative director• Finances: Oversight of capital policies as president and representative director• Risk management: Chairman of the Compliance Promotion Board responsible for Groupwide risk management (October 2005 to present)• Innovation: Leadership of business model innovation and evolution through measures including transition to fixed-term rental contracts, development of stores that do not sell,
and redefinition of credit card business as fintech business• Sustainability/Well-being: Promotion of Groupwide ESG initiatives, including 2019 establishment and disclosure of MARUI GROUP’s 2050 Vision; participation in World Economic
Forum’s Global Future Council on Japan and other sustainability- and well-being-related committees• Digital transformation: Definition of vision for stores for post-digital era and promotion of stores that do not sell, housing tenants like D2C brands and content and subscription service providers• Retailing/Fintech: Oversight of retailing and fintech businesses as president and representative director• New business development: Leadership of launch of several new business projects through direct oversight• Investments in start-up companies: Involvement in decisions to conduct investments totaling ¥26.9 billion in 53 start-up companies (as of March 31, 2023)

1. Activator
2. Communication
3. Maximizer
4. Individualization
5. Achiever• Corporate management: Experience as representative and CEO of GLOBIS Management Bank (July 2005 to May 2007) and president & CEO of ProNova Inc. (June 2007 to present)• Management strategy formulation/Human resource management: Extensive track record as a management consulting expert specializing in management team enhancement
and leader cultivation; involvement in cultivation of future leaders at MARUI GROUP• Finances/Corporate governance: Extensive knowledge regarding finances and corporate governance gained from serving as an outside director at various companies• Innovation: Discussions with managers and support for corporate innovation as part of main business• Sustainability: Support for promoting diversity at various companies as part of main business, leadership in promoting empowerment of female employees at MARUI GROUP• Well-being: Experience leading discussions on improving corporate value through well-being as chairperson of Nikkei Well-being Initiative roundtable discussion committee (Marchto December 2021)• New business development: Establishment of ProNova Inc. in June 2007
• Investments in start-up companies: Insight regarding start-up companies gained as advisory board member of committee seeing participation by leaders in start-up company
management

1. Strategic
2. Activator
3. Ideation
4. Futuristic
5. Command• Corporate management: Experience as representative director and CEO of Asuka Corporate Advisory Co., Ltd. (March 2005 to July 2013) and representative director and CEO of
Misaki Capital Inc. (October 2013 to present)• Management strategy formulation: Two decades of experience providing management consulting services to a wide range of industries• Finances/Risk management: Insight regarding finances and investment-related risk management gained through years of involvement in investing• Corporate governance: Insight related to corporate governance gained as chairman of the Independent Directors Committee of the Japan Association of Corporate Directors(February 2018 to present)• Innovation: Establishment of unique investment style by advocating new concept of being an engaged shareholder that works together with companies and their management• New business development: Establishment of Misaki Capital Inc. in October 2013

1. Strategic
2. Input
3. Futuristic
4. Responsibility
5. Connectedness• Corporate management: Experience as CEO of E-Square Inc. (September 2000 to October 2011), representative director of Next Leaders’ Initiative for Sustainability (January 2015
to present)• Management strategy formulation: Guidance of strategy formulation for collaboration with new companies and managers focused on environmental initiatives and Lifestyles of
Health and Sustainability (LOHAS) and for related projects in self-established companies and NPOs
• Human resource management: Cultivation of future leaders as representative director of Next Leaders’ Initiative for Sustainability• Innovation: Advancement of numerous innovative sustainability initiatives, including introducing Japan to the concept of LOHAS, together with companies, universities, and government agencies• Sustainability/Well-being: Co-founding of CSR and environmental consulting firm E-Square Inc. as start of more than 20-year career as sustainability specialist• New business development: Founding of E-Square Inc., Next Leaders’ Initiative for Sustainability, and various other companies

1. Harmony
2. Analytical
3. Responsibility
4. Consistency
5. Individualization• Corporate management: Experience as president and representative director of D2C & Co. Inc. (January 2020 to present)• Management strategy formulation/Corporate governance: Leadership of formulation of medium-term management plans and establishment and evolution of corporate governance systems as general manager of the Corporate Planning Division (April 2013 to March 2017)• Finances: Background centered on finance and accounting divisions dating back to joining MARUI GROUP and experience as CFO (April 2019 to present)• Risk management: Member of the Compliance Promotion Board responsible for Groupwide risk management (October 2015 to present)• Innovation: Spearheading of capital measures including promotion of targeted balance sheet from perspective of investors since 2016
• Sustainability: Promotion of sustainability initiatives and proactive disclosure as officer in charge of sustainability and ESG promotion (October 2016 to present)• Digital transformation: Leadership of Groupwide digital strategies as CDO (October 2017 to March 2019) and senior managing director of M & C SYSTEMS CO., LTD.
(April 2018 to March 2019)• New business development: Leadership in establishing tsumiki Co., Ltd., a company providing cumulative investment services through EPOS cards• Investments in start-up companies: Involvement in decisions to conduct investments totaling ¥26.9 billion in 53 start-up companies (as of March 31, 2023)

1. Maximizer
2. Learner
3. Arranger
4. Achiever
5. Self-Assurance• Human resource management: Leadership in promoting wellness management contributing to improved corporate value as company physician (April 2011 to present)• Risk management: Promotion of workplace risk management measures including those for prevention of overworking and mental health issues with occupational health andsafety consultant qualifications• Innovation: Promotion of development of highly creative organizations by going beyond scope of duties as company physician to plan Companywide project team and programs
targeting senior management• Sustainability/Well-being: Promotion of wellness management and well-being management through Companywide project team as general manager of Wellbeing Promotion
Department (formerly Health Management Division, April 2014 to present) and CWO (May 2021 to present)

1. Ideation
2. Responsibility
3. Deliberative
4. Strategic
5. Arranger• Management strategy formulation: Insight into management strategies gained from experience as general manager of the Corporate Planning Division of Mitsubishi UFJ Morgan
Stanley Securities Co., Ltd. (January 2013 to September 2014)• Finances: Robust practical experience and insight regarding finances and accounting gained from working at a bank
• Corporate governance: Practical corporate governance insight related to business partners gained from working at a bank
• Risk management: Insight regarding financial and accounting risks gained from working at a bank93

Officer Skill Matrix

CliftonStrengths®

Akikazu Aida
Managing Executive Officer andCDO (Chief Digital Officer)

Takeshi Ebihara
Senior Executive Officer andCIO (Chief Information Officer)

94

Investments instart-up companies

Managing Executive Officer

New businessdevelopment

Masahiro Aono

FintechManaging Executive Officer

Retailing

Yoshinori Saito

Digitaltransformation

Senior Managing Executive Officer and CHRO (Chief Human
Resources Officer)

Well-being

Tomoo Ishii

Sustainability

Senior Managing Executive Officer and CSO (Chief Security
Officer)Innovation

Masao Nakamura

Risk management

External Audit & Supervisory Board Member

Unique Skills
Corporate
governance

Hiroaki Matsumoto

Finances

External Audit & Supervisory Board Member

Human resource
management

Yoko Suzuki

1. Maximizer
2. Strategic
3. Ideation
4. Adaptability
5. Relator

Management
strategy
formulation

Audit & Supervisory Board Member (Full time)

Corporate
management

Domain of Overall
Strengths: Top 5

Hajime Sasaki

Shared Skills

Basis for Skills• Corporate management: Experience as president and representative director of MARUI CO., LTD. (April 2016 to March 2019), and president and representative director of AIM
CREATE CO., LTD. (April 2019 to March 2022)• Management strategy formulation: Establishment of medium-term management plan for the retailing business encompassing period spanning from 2016 to 2020 as president
and representative director of MARUI CO., LTD.
• Risk management: Member of the Compliance Promotion Board responsible for Groupwide risk management (October 2014 to March 2022)• Innovation/Retailing: Robust retailing experience as president and representative director of MARUI CO., LTD.; promotion of retailing business structure reforms through transition
to fixed-term rental contracts• Sustainability: Promotion of sustainability in the construction field through collaboration with Sumitomo Forestry Co., Ltd., conducted as president and representative director of
AIM CREATE CO., LTD.
• Retailing: Experience as officer in charge of retailing and store operation business (April 2015 to March 2016) and president and representative director of MARUI CO., LTD.
• Fintech: Experience as director and general manager of the Card Planning Division (October 2007 to September 2009) and director of Epos Card Co., Ltd. (April 2015 to March 2016)

1. Positivity
2. Includer
3. Achiever
4. Communication
5. Strategic• Corporate governance/Risk management: Highly specialized insight as attorney; extensive knowledge on corporate legal affairs and legal compliance audits founded on robust
experience and insight gained as outside director, corporate auditor, etc., at other companies• Retailing: Insight on retailing from perspective of corporate auditor gained in positions as an outside corporate auditor at retailing companies

1. Harmony
2. Responsibility
3. Consistency
4. Discipline
5. Deliberative• Finances: Specialized expertise and robust experience regarding financial and accounting gained as director of the Kumamoto Regional Tax Bureau• Corporate governance/Risk management: Qualifications as certified public tax accountant; experience as corporate auditor at other companies

1. Individualization
2. Arranger
3. Maximizer
4. Woo5. Communication• Corporate management: Experience as president and representative director of MOVING CO., LTD. (April 2010 to March 2011); president and representative director of MARUI CO.,LTD. (April 2011 to March 2016); president and representative director of AIM CREATE CO., LTD. (April 2016 to March 2019); and president and representative director of MARUIHOME SERVICE Co., Ltd. (April 2021 to present)• Management strategy formulation/Finances/Corporate governance: Experience as general manager of the Corporate Planning Division (March 2008 to March 2011) and officer incharge of corporate planning (April 2019 to March 2022)• Risk management: Oversight of Groupwide risk management as CSO (April 2021 to present)• Innovation: Promotion of retailing business structure reforms through transition to fixed-term rental contracts• Retailing: Experience as officer in charge of retailing business (April 2015 to September 2017 and April 2020 to March 2021) and president and representative director of MARUICO., LTD.
• Fintech: Experience as officer in charge of fintech business (October 2017 to March 2020)

1. Analytical
2. Significance
3. Responsibility
4. Restorative
5. Relator• Corporate management: Experience as president and representative director of MARUI FACILITIES Co., Ltd. (formerly CSC Service Co., Ltd., October 2008 to March 2013) and president and representative director of MOVING CO., LTD. (April 2017 to March 2019)• Human resource management: Experience as general manager of the Personnel Division (April 2013 to March 2016), officer in charge of personnel (April 2016 to present), and
CHRO (May 2021 to present)• Corporate governance/Risk management: Experience as general manager of the Group Compliance Division (October 2005 to September 2007), general manager of the General
Affairs Division (October 2007 to March 2013), and officer in charge of general affairs (April 2013 to present)• Sustainability: Experience as officer in charge of CSR promotion (September 2007 to March 2013)• Well-being: Experience as CHO (formerly Chief Operating Officer of Healthcare Promotion, April 2015 to May 2021) and officer in charge of wellness promotion (formerly officer incharge of healthcare promotion, April 2015 to present)• Retailing: Experience as deputy store manager in charge of general affairs at Tachikawa Marui (January to December 1999)

1. Consistency
2. Harmony
3. Analytical
4. Significance
5. Relator• Corporate management: Experience as president and representative director of Epos Card Co., Ltd. (April 2016 to present)• Management strategy formulation: Establishment of medium-term management plans for the fintech business, collectively encompassing period spanning from 2016 to 2026 aspresident and representative director of Epos Card Co., Ltd.
• Finances: Experience as general manager of the Financial Department (July 2008 to March 2011)• Risk management: Insight regarding fintech-specific risks like delinquent debt and information security gained as president and representative director of Epos Card Co., Ltd.
• Innovation: Promotion of unique strategy of maximizing share of household finances through expansion of rent guarantee services, etc.
• Retailing: Experience as general manager of the Direct Marketing Department (April 2011 to March 2012) and the Demand Survey Department of MARUI CO., LTD. (April 2012 toMarch 2013)• Fintech: Experience as president and representative director of Epos Card Co., Ltd., and officer in charge of fintech business (April 2020 to present)

1. Positivity
2. Maximizer
3. Ideation
4. Intellection
5. Woo• Corporate management: Experience as president and representative director of MARUI CO., LTD. (July 2020 to present)• Management strategy formulation: Establishment of medium-term management plan for the retailing business encompassing period spanning from 2021 to 2026 as president
and representative director of MARUI CO., LTD.
• Risk management: Member of the Compliance Promotion Board responsible for Groupwide risk management (April 2016 to March 2017 and October 2019 to present)• Innovation: Promotion of retailing business structure reforms through transition to fixed-term rental contracts• Retailing: Experience as president and representative director of MARUI CO., LTD., and officer in charge of retailing business (April 2021 to present)

1. Woo2. Achiever
3. Communication
4. Positivity
5. Analytical• Corporate management: Experience as managing director of Marui (Shanghai) Co., Ltd. (April 2011 to March 2014)• Management strategy formulation/Finances/Corporate governance: Experience as general manager of the Corporate Planning Division (April 2017 to March 2022) and officer incharge of corporate planning (April 2022 to present)• Risk management: Member of the Compliance Promotion Board responsible for Groupwide risk management (April 2019 to present)• Innovation: Promotion of increased investments in non-tangible assets for creating new businesses and transition to intellectual creation company as general manager of the
Corporate Planning Division and officer in charge of co-creative investment (October 2021 to present)• Digital transformation: Oversight of digital transformation strategies as general manager of the Customer Success Division (October 2018 to March 2022), CDO (April 2021 topresent), and general manager of the Digital Transformation Office (September 2022 to present)• Retailing: Experience as deputy store manager of Yurakucho Marui (April 2013 to March 2014) and Hakata Marui (April 2016 to March 2017)• New business development/Investments in start-up companies: Experience as director of D2C & Co. Inc. (January 2020 to present); director of okos Co., Ltd. (May 2021 to present); general manager of the New Project Division (April 2022 to March 2023); and officer in charge of co-creative investment

1. Harmony
2. Responsibility
3. Positivity
4. Includer
5. Restorative• Corporate management: Experience as president and representative director of M & C SYSTEMS CO., LTD. (April 2021 to present)• Risk management: Oversight of information security risk management as CIO (April 2021 to present) and president and representative director of M & C SYSTEMS CO., LTD.
• Digital transformation: Experience as director and general manager of the Digital Transformation Promotion Department of M & C SYSTEMS CO., LTD. (April 2019 to March 2021);
CDO (April 2019 to March 2021); and president and representative Director, M & C SYSTEMS CO., LTD. (April 2021 to present)• Fintech: Experience as general manager of the Systems Department (April 2014 to March 2018) and director of Epos Card Co., Ltd. (April 2018 to March 2021)

95

Officer Skill Matrix

CliftonStrengths®

Takahiro Matsumoto
Executive Officer

Yuko Shiota
Executive Officer

Atsushi Nagasao
Executive Officer

Takeaki Yamane
Executive Officer

96

Investments instart-up companies

Executive Officer

New businessdevelopment

Jiro Ishioka

FintechExecutive Officer

Retailing

Ayumi Hiromatsu

Digitaltransformation

Executive Officer

Well-being

Tatsuo Niitsu

Sustainability

Executive Officer

Innovation

Mayuki Igayama

Risk management

Executive Officer

Unique Skills
Corporate
governanceYuko Ito

Finances

Executive Officer

Human resource
management

Masahisa Aoki

Management
strategy
formulation

Executive Officer and CDXO
(Chief Digital Transformation Officer) (Non-full time)

Corporate
management

Domain of Overall
Strengths: Top 5

Naofumi Tsuchiya

Shared Skills

Basis for Skills

1. Strategic
2. Activator
3. Ideation
4. Woo5. Communication• Corporate management: Experience as representative director and CEO of Goodpatch Inc. (September 2011 to present)• Management strategy formulation/Human resource management/Innovation/Digital transformation: Experience supporting innovation at a number of companies through therecruitment and training of digital transformation strategy, user experience design, and digital technology professionals as a digital transformation and user experience expert• New business development: Establishment of Goodpatch Inc. in September 2011
• Investments in start-up companies: Experience supporting numerous start-up companies through development of products founded on strengths in user interface and user experience design and wide-ranging insight pertaining to start-up companies

1. Positivity
2. Maximizer
3. Harmony
4. Individualization
5. Includer• Corporate management: Experience as president and representative director of MARUI CO., LTD. (April 2019 to June 2020) and CEO of tsumiki Co., Ltd. (October 2021 to present)• Risk management: Member of the Compliance Promotion Board responsible for Groupwide risk management (April 2019 to present)• Innovation/New business development: Proposal of anime business; pioneering of MARUI GROUP’s development of new businesses; and growth of anime business and contribution to transformation of retailing business as general manager of Anime Business Department (April 2016 to March 2019) and officer in charge of the anime business (April 2018
to March 2020)• Sustainability: Promotion of reuse and recycling initiatives as chief manager in charge of apparel recycling project (April 2010 to March 2011)• Retailing: Experience as store manager of Shinjuku Marui Annex (April to September 2015) and president and representative director of MARUI CO., LTD.
• Fintech: CEO of tsumiki Co., Ltd. (October 2021 to present)• New business development: Experience as general manager of Co-Creative Investment Department (July 2020 to September 2021) and director of D2C & Co. Inc. (July 2020 to
September 2021)

1. Discipline
2. Analytical
3. Deliberative
4. Focus
5. Responsibility• Corporate management: Experience as president and representative director of AIM CREATE CO., LTD. (April 2022 to present)• Innovation: Leadership of Groupwide design management through open innovation with nendo inc. as general manager of the Group Design Center (April 2018 to March 2022) andofficer in charge of Group Design Center (April 2022 to present)• Sustainability: Promotion of sustainability in the construction field through collaboration with Sumitomo Forestry Co., Ltd., conducted as director (April 2012 to March 2022) andpresident and representative director of AIM CREATE CO., LTD. (April 2022 to present)• Retailing: Experience as director of MARUI CO., LTD. (April 2019 to present)

1. Analytical
2. Ideation
3. Achiever
4. Arranger
5. Responsibility• Corporate management: Experience as president and representative director of MOVING CO., LTD. (April 2019 to present)• Risk management: Member of the Compliance Promotion Board responsible for Groupwide risk management (April 2016 to March 2017 and April 2019 to present)• Retailing: Experience as director and general manager of the Direct Marketing Department (April 2014 to March 2016) and director and general manager of the Omni-Channel
Retailing Division of MARUI CO., LTD. (April 2016 to March 2019)

1. Individualization
2. Ideation
3. Arranger
4. Maximizer
5. Futuristic• Digital transformation: Promotion of collaboration with artificial intelligence technology companies as director of okos Co., Ltd. (May 2021 to present)• Retailing: Experience as director and general manager of Sales Planning Division (April 2019 to March 2021), and director and general manager of the E-Commerce Business
Department of MARUI CO., LTD. (April 2021 to present)• Fintech: Experience as director of Epos Card Co., Ltd. (April 2016 to March 2019)• New business development: Robust experience in new business development gained as leader of multiple new business projects

1. Ideation
2. Responsibility
3. Belief
4. Harmony
5. Consistency• Sustainability/Well-being: Promotion of diversity as general manager of the Diversity Promotion Section of the Personnel Division (April 2014 to March 2018) and while balancing
child-rearing and work through use of the shortened working hour system• Digital transformation: Experience as director and general manager of the System Planning Department (April 2019 to March 2021), director and general manager of the Customer
System Development Department (April 2021 to March 2022), and director and general manager of the Digital Promotion Department of M & C SYSTEMS CO., LTD. (April 2022 topresent)• Fintech: Experience as general manager of the Business Planning Department (April 2008 to March 2010), general manager of the Credit Management Department (April 2010 toJanuary 2011), and director of Epos Card Co., Ltd. (April 2022 to present)

1. Strategic
2. Maximizer
3. Learner
4. Achiever
5. Ideation• Human resource management: Experience as general manager of the Personnel Division (April 2020 to March 2023)• Retailing: Experience as deputy store manager of Hakata Marui (April 2016 to March 2017) and general manager of the Sales Planning Division of MARUI CO., LTD. (April 2023
to present)

1. Harmony
2. Achiever
3. Deliberative
4. Analytical
5. Responsibility• Corporate governance/Risk management: Experience as general manager of the General Affairs Division (April 2021 to present)

1. Learner
2. Intellection
3. Achiever
4. Significance5. Context• Sustainability: Experience as chief manager in charge of CSR at CSR Promotion Department (April 2016 to March 2017), chief manager in charge of sustainability at Sustainability
Department (April 2017 and March 2019), and general manager of Sustainability Department and ESG Promotion Department (April 2022 to present)• Retailing: Experience as deputy store manager of Kawasaki Marui (October 2013 to March 2014) and chief manager of the Hakata Demand Marketing Section of the Sales
Planning Division (April 2014 to March 2016)• New business development: Experience as chief manager in charge of co-creative businesses in new business projects (October 2019 to March 2021) and general manager of the
Co-Creative Business Department of okos Co., Ltd. (April 2021 to March 2022)

1. Harmony
2. Analytical
3. Maximizer
4. Relator
5. Positivity• Management strategy formulation/Corporate governance: Experience as general manager of the Corporate Planning Division (April 2022 to present)• Finances: Experience as chief manager of the Dispatch and Storage Section of the Financial Department (April 2017 to March 2019) and chief manager in charge of corporate
planning at the Corporate Planning Division (April 2019 to March 2022)

1. Analytical
2. Deliberative
3. Relator
4. Individualization
5. Competition• Retailing: Experience as chief manager of the Needs and Sales Promotion Section of the Sales Planning Division of MARUI CO., LTD. (April 2015 to March 2016)• Fintech: Experience as general manager of the Sales Planning Division (April 2021 to March 2022) and general manager of Fintech Business Department of Epos Card Co., Ltd.
(April 2022 to present)

97

Overview of MARUI GROUP
As of March 31, 2023

Company Overview

Major Shareholders

Name

MARUI GROUP CO., LTD.

Head office3-2, Nakano 4-chome, Nakano-ku, Tokyo 164-8701,
Japan

Date of foundation

February 17, 1931

Date of establishment

March 30, 1937

Capital¥35,920 million

Business activities

 orporate planning and management forCGroup companies engaged in Retailing ­segment and
Fintech segment

Number of employees

4,435 (Group total, excluding temporary employees)

Corporate Website
www.0101maruigroup.co.jp/en/

Stock Information
Stock listing

Tokyo Stock Exchange, Prime Market(Loan margin trading issues)

Securities code

8252

Number of ­authorized shares

1,400,000,000

Number of common sharesissued*1

208,660,417

Number of shareholders

34,407*1 Number of common shares issued includes 18,547,000 shares of treasury stock,equivalent to 8.9% of the total number of shares of common stock issued.

Ratings, Awards, and Recognition As of December 2023
Number ofshares(Thousandsof shares)

Percentage of
total sharesissued*2 *3 *4(%)

The Master Trust Bank of Japan, Ltd.
(Trust Account)

45,423

23.9

Custody Bank of Japan, Ltd. (Trust Account)

22,866

12.0

MISAKI ENGAGEMENT MASTER FUND

6,490

3.4

Aoi Real Estate Co., Ltd.

6,019

3.2

MUFG Bank, Ltd.

4,356

2.3

TOHO CO., Ltd.

3,779

2.0

The AOI SCHOLARSHIP FOUNDATION

3,249

1.7

THE BANK OF NEW YORK MELLON 140042

2,794

1.5

Tadao Aoi

2,784

1.5

KARASUYAMA, Ltd.

2,454

1.3

Name

*2 The Company holds 18,547,000 shares of treasury stock, which are excluded from theabove principal shareholders. The number of shares of treasury stock excludes shares
held by the Officer Compensation BIP Trust and Stock Benefit ESOP Trust.
*3 Percentage of shareholding is calculated based on the total number of shares issued
and outstanding, excluding treasury stock of 18,547,000 shares.
*4 The calculation for the percentage of shareholding includes 766,000 shares held by the
Officer Compensation BIP Trust and Stock Benefit ESOP Trust.

Corporate Data
MARUI GROUP CO., LTD. and Its Consolidated Subsidiaries

FY2019Earnings per share (Yen)FY2021*10

FY2022

FY2023117.58

10.86

85.81

Return on equity (%)

9.1

8.8

0.8

6.5

8.5

Return on invested capital (%)

3.7

3.7

1.4

3.3

3.5

96,357

173,111

301,993

308,876

316,378

2,539,631
337,006

2,903,713
320,119

2,919,231
229,2073,373,446
245,255

3,957,281
272,772

2,310,635

2,678,839

2,760,432

3,200,536

3,758,847

41,18425,341

41,94425,39615,3102,327

36,784
17,791

38,771
21,473

688

720

709

714

731

65.9
1.80

65.5
1.88

63.0
2.09

64.6
1.81

66.9
1.61

5,326
43.9
13

5,130
44.8
14

4,855
44.1
15

4,654
44.7
17

4,435
45.3
18

100

100

100

100

100

1.1
15,10996,232399,92623.0
13,956
67,916352,640

52.1
11,09037,858
256,682

60.9
10,54029,983
258,22468.0
10,04325,582
255,620

CO2 emissions reduction (t-CO2)*5
Total Group transactions (Millions of yen)*6
Retailing (Millions of yen)
Fintech (Millions of yen)
Operating income (Millions of yen)
Net income attributable to owners of parent (Millions of yen)
EPOS cardholders (including Akai Card) (Ten thousandsof members)
Ratio of active cardholders (%)
Ratio of bad debt write-offs (%)
Total number of employees
Ratio of female employees (%)
Ratio of women in management position (%)
Ratio of applicable male employees acquiring childcare
leave (%)*7
Rate of renewable energy use (%)*8
GHG emissions (Scope 1) (t-CO2)*9
GHG emissions (Scope 2) (t-CO2)*9
GHG emissions (Scope 3) (t-CO2)*9*5 Reductions are from the base year of the fiscal year ended March 31, 2017.
*6 The “Eliminations” item, which is used to deduct card shopping transactions from figures
for the Retailing segment, has been omitted.
*7 Figures for the ratio of applicable male employees acquiring childcare leave are calculated
based on standards for basic employment equity surveys.
*8 Figures represent rates of renewable energy use for MARUI GROUP stores and offices.

98

FY2020115.99MARUI GROUP established the IR Department in October 2015 andthen the ESG Promotion Department in October 2016 to enhancecommunication with institutional investors and information disclosure. We have also identified the promotion of decarbonization,
sustainable consumption, and accelerated human resource initiatives
as key measures under the medium-term management plan with theaim of improving corporate value.

More detailed information on these and other awards and recognition can befound on the Company’s corporate website.
www.0101maruigroup.co.jp/en/ci/award/

Global Socially Responsible Investment Indexes
MARUI GROUP has been selected for inclusion in the
Dow Jones Sustainability World Index for the sixth
consecutive year and has also been included in the Dow
Jones Sustainability Asia Pacific Index for seven consecutive years.

MARUI GROUP has been included in the FTSE4Good
Index Series,*11 a series of indexes arranged by FTSE
Russell that comprise companies meeting evaluation
standards pertaining to ESG factors, for seven consecutive years.

Inclusion in All Six ESG Indexes Utilized by the Government Pension Investment FundMARUI GROUP has been included in the FTSE Blossom
Japan Index for seven consecutive years. This ESG index
is meant to reflect the performance of Japanesecompanies that meet various ESG-related requirements,
and industry is therefore not considered when selecting
companies for inclusion.

For seven consecutive years, MARUI GROUP has been
included in the MSCI Japan Empowering Women
Index,*12 an ESG index for Japanese stocks consisting ofcompanies that exhibit gender diversity excellence ineach industry.

MARUI GROUP has been selected for inclusion in the
FTSE Blossom Japan Sector Relative Index. This index iscompiled by assessing the stance toward managementof climate change risks and opportunities of companies
with high carbon intensity.

For the sixth consecutive year, MARUI GROUP was
included in the S&P/JPX Carbon Efficient Index, which
comprises companies selected based on their disclosureof environmental information and their carbon efficiency.

MARUI GROUP has been included in the MSCI JapanESG Select Leaders Index for the seventh consecutive
year.*12 This ESG index comprises Japanese companies
with relatively high MSCI ESG Ratings in each industry
selected.

MARUI GROUP was selected for inclusion in Gender
Equality Group 1, the highest rating in the Morningstar
Japan ex-REIT Gender Diversity Tilt Index, based on
evaluations by data provider Equileap.

MARUI GROUP has declared its intent to become carbon
neutral and laid out strategies for linking decarbonization
activities to business growth. These strategies havebeen certified by Science Based Targets as viable forachieving net-zero emissions.

MARUI GROUP has been included in the Climate A List,
which represents the highest evaluation offered by CDP,
for the fourth time in reflection of its initiatives toaddress climate change and practice information
disclosure of a level that is high, even viewed from a
global perspective.

For six consecutive years, MARUI GROUP has beenchosen for inclusion in the Nadeshiko Brand, a programorganized to recognize companies exhibiting excellencein empowering female employees. In addition, MARUIGROUP was identified as a company warranting attention for its implementation of distinctive initiatives for theempowerment of its female employees.

For the sixth consecutive year, MARUI GROUP waschosen for inclusion in the Health & Productivity Stock
Selection, which is compiled to recognize enterprisesthat focus on and strategically carry out efforts withregard to their employees’ health from a management
perspective.

109.37*9 Scope 1 and Scope 2 represent greenhouse gas emissions from the Group. Scope 3
represents greenhouse gas emissions from areas including raw material procurement,
transportation, and use by customers. Third-party verification has been received from theJapan Quality Assurance Organization for greenhouse gas emissions figures since thefiscal year ended March 31, 2017.
*10 The Company began applying the Accounting Standard for Revenue Recognition (ASBJ
Statement No. 29, March 31, 2020) effective April 1, 2021. Figures for the fiscal year
ended March 31, 2021, have not been restated to reflect this change.

MARUI GROUP has been chosen for inclusion in the
Digital Transformation Stock Selection in reflection of
the high evaluation of initiatives such as the issuance ofJapan’s first digital social bonds to be offered by acompany other than a financial institution and its
provision of the OMEMIE service.

*11 FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms thatMARUI GROUP CO., LTD. has been independently assessed according to the FTSE4Good criteria, and has
satisfied the requirements to become a constituent of the FTSE4Good Index Series. Created by the global index
provider FTSE Russell, the FTSE4Good Index Series is designed to measure the performance of companies
demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE4Good indices are usedby a wide variety of market participants to create and assess responsible investment funds and other products.
*12 THE INCLUSION OF MARUI GROUP CO., LTD. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF MARUI GROUP CO., LTD. BY MSCI OR ANY OF ITS AFFILIATES. THE MSCIINDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE
TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

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Overview of MARUI GROUPMARUI GROUP Store Network As of October 2023

MARUI GROUP Co-Creative Platforms for Supporting Self-Actualization
MARUI GROUP provides platforms for supporting employees in realizing their business ideas and achieving their dreams. In this section, we will
look at four such platforms. Additional information on these platforms can be gained by scanning the respective QR codes (in Japanese only).

Marui and Modi stores: 22
EPOS Card Centers (outside of Marui and Modi stores): 39

Hokkaido

Aomori

Gunma

IbarakiNiigata

SaitamaFuture Accelerator Gateway is a program launched in October 2020 to serve as aFirst held in February 2021, Marui Co-Creation Pitch is a program for soliciting

gateway to new business creation. Through this program, members of younger

business ideas from start-up companies with unique services and technolo-

generations, specifically individuals age 25 and under, are able to submit ideas

gies. Through this program, we seek out ideas for using MARUI GROUP’s

for new businesses. The proponents of ideas selected are teamed up withassets and expertise to create a more inclusive society. When the idea of a

MARUI GROUP employees to refine their ideas over a period of roughly threecompany is approved, MARUI GROUP will look at how best to take action withmonths with the goal of creating new businesses. Another major characteristic

regard to the idea, whether through collaboration, investment, or other means.

of the Future Accelerator Gateway program is participation by entrepreneurs as

HERALBONY Co., Ltd., won the grand prize in the first Marui Co-Creation Pitch,

mentors. Such mentorship allows participants to gain practical businessand its idea for co-creation through collaboration cards was used to shape adevelopment skills while fostering their entrepreneurial spirit.

new business.

Tsukuba

Soka
Shiki
Kashiwa

Akishima

Yamaguchi

Kitasenju

Hikarigaoka
Kokubunji Kichijoji Nakano Shinjuku

MachidaMizonokuchi

Aichi

Oita

Ueno

Chiba
Kinshicho

Tokyo
Shinurayasu

Inage
Chiharadai

Ebina

Kanagawa

Osaka

MiyazakiTokyo

Shibuya
Yurakucho

Shizuoka

NagasakiKagoshima

Marui Co-Creation Pitch

Shobu

Omiya

Hyogo

Kumamoto

Forum for Giving Form to the Business Ideas of Start-Up Companies

Future Accelerator Gateway
Kumagaya

Gifu

Shiga
Fukuoka

Tochigi

Platform for Realizing the Ideas of Younger Generations

OdawaraTotsuka

Saga

Yokohama
Yokosuka

Official Site (in Japanese only)www.0101maruigroup.co.jp/future/

Shinjuku Marui Main Building

Yurakucho Marui

Shibuya Modi

EPOS Card Center

Official Site (in Japanese only)maruicocreationpitch.samurai-incubate.asia/

Education Support for Future Generations

Easy Way for Anyone to Open a Physical StoreAOI SCHOLARSHIP FOUNDATIONOMEMIE

Marui and Modi StoresTokyo

Kanagawa

Transactions(Billions of yen)Transactions(Billions of yen)

Name

Sales floorarea (m2)

Marui Family Shiki

18,90011.0

Omiya Marui

13,970

6.4

Soka Marui

16,530

4.7

Chiba

Kashiwa Location*13

18,810

7.7

11.6

Shizuoka

Shizuoka Modi

5,540

2.3

16,390

10.6

Osaka

Namba Marui17,000

7.5

Shibuya Location*13

9,840

5.9

Hyogo

Kobe Marui

6,940

4.5

Nakano Marui

4,950

6.1

Fukuoka

Hakata Marui

15,000

8.0

Kokubunji Marui

14,300

9.6

Marui Kichijoji

11,9505.5Marui Family Mizonokuchi

32,26020.5

Marui City Yokohama

16,5109.9

Totsuka Modi

16,5808.7

Marui Family Ebina

19,500

7.4

Name

Sales floorarea (m2)

Kitasenju Marui35,30033.8

Shinjuku Marui*13

30,590

20.6

Yurakucho Marui

18,50014.3

Machida Location*13

21,27012.3

Marui Kinshicho

22,990

Ueno Marui(FY2023)

Saitama(FY2023)*13 “Shinjuku Marui” refers to Shinjuku Marui Main Building, Shinjuku Marui Annex, andShinjuku Marui Men. “Machida Location” and “Kashiwa Location” refer to both the Maruiand Modi stores located at these sites. Shibuya Marui was closed on August 28, 2022,
and only Shibuya Modi remains accordingly.

The AOI SCHOLARSHIP FOUNDATION was established in 1973 through a

OMEMIE is a unique service that makes it easy for a variety of users, including

personal investment by MARUI GROUP founder Chuji Aoi based on his desire toindividuals who had given up on the possibility of opening a store and direct-

foster talented individuals to serve society. Scholarships offered by the founda-

to-consumer businesses that previously operated exclusively online, to open

tion entail no fees, and there is no need to pay back money received, which isa store at a Marui or Modi location. Through this service, users are able torare in Japan. In accordance with Chuji Aoi’s belief that companies have a duty

perform all processes online, which range from searching for available store

to return some of their business earnings to society, the activities of thisspace to making inquiries and performing complicated contracting tasks forfoundation are fully funded by the dividends received from its holdings of MARUI

permanent and temporary (pop-up) event shops. Users have praised thisGROUP stock. In the fiscal year ended March 31, 2023, the foundation set newservice for how it has enabled them to introduce their products and services

records for scholarship payments and for recipients, with total payments of

to customers with whom they would not previously been able to connect.

¥143 million being issued to 222 high school and university students.
Official Site (in Japanese only)omemie.0101.co.jp/

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101

Overview of MARUI GROUPMARUI GROUP’s Media Sources
MARUI GROUP operates websites, social media accounts, and other media sources. These venues are used to communicate our policies andinitiatives as well as to deliver a wide range of other content including articles on social issues, records of discussions by the pioneers of ourage, and videos.

MARUI GROUP’s Owned Media

Enthusiast Media

Impact Co-Creation Magazine

kono yubi to-mare

5PM Journal& magazine

The kono yubi to-mare community site is an owned media source showcasing

5PM Journal is a direct-to-consumer brand curation website launched in 2020the latest information pertaining to MARUI GROUP, including chronicles ofby D2C & Co. Inc., a Group company that conducts investment and financing

forward-looking discussions, looks at new businesses, news on events, andcentered on such brands. This site has been redesigned and its scope expanded

details about our workstyles.

to focus on the new theme of enthusiasts, a group that tends to be highly

The future that MARUI GROUP envisions for 2050 is one in which we are able to

VISION BOOK 2050

transcend dichotomies to enable everyone to live happily and be themselves. We

Report published in March 2019 declaring MARUI GROUP’s vision for the worldof 2050began publishing & magazine in March 2023 with the aim of communicating thewww.0101maruigroup.co.jp/en/sustainability/lib/s-report.html

initiatives needed to shape this future to all of our stakeholders. This magazine

Co-creation management reports

is distributed at Marui and Modi stores, and its articles can also be found online.

Annually published management strategy reports functioning as communication tools and offering a condensed look at MARUI GROUP’s present and future

Four issues of & magazine have been published to date.

www.0101maruigroup.co.jp/en/ir/lib/i-report.html

compatible with direct-to-consumer brands. Committed to communicating
kono yubi to-mare forward-looking community site (in Japanese only)
www.to-mare.com/

MARUI GROUP’s Vision& magazine issues (in Japanese only)www.0101maruigroup.co.jp/ir/lib/magazine.html

people’s dedication toward their passions, 5PM Journal provides informationon the love of fans for a wide range of genres as a form of enthusiast media.

IMPACT BOOK
Road map for achieving earnings growth while generating our desired impact,
published in June 2023

www.0101maruigroup.co.jp/en/ir/lib/impactbook.html
kono yubi to-mare X (formerly Twitter) account (in Japanese only)twitter.com/maruigroupkono yubi to-mare YouTube channel (in Japanese only)www.youtube.com/channel/UCCHq6q2aRFTyyEwVOMxHYXA

5PM Journal (in Japanese only)
5pmjournal.0101.co.jp/

Hypotheses and Predictions Grounded on Research

Research Pod

Investor Relations Information Mailing list registration (in Japanese only)
Medium-Term Management Plan Financial and ESG Information 

Medium-term management plan-related materials

Financial results summaries

www.0101maruigroup.co.jp/en/ir/lib/plan.html

Corporate Governance 
MARUI GROUP Code of Conduct and policies

Store and Brand Information

www.0101maruigroup.co.jp/en/ci/governance/
MARUI GROUP Corporate Governance Guidelines
www.0101maruigroup.co.jp/pdf/

Marui store website (machine translated)
www.0101.co.jp.e.ex.hp.transer.com/global/en.html

cgg_20230509_en.pdf
Corporate Governance Reportwww.0101maruigroup.co.jp/pdf/cgr_en.pdf

Marui shopping app (machine translated)
www.0101.co.jp.e.ex.hp.transer.com/appinfo/

Corporate officer backgrounds and reasons forappointment
www.0101maruigroup.co.jp/en/ci/officer/

EPOS app website (in Japanese only)www.eposcard.co.jp/appli/index.html

Research Pod is a podcast that presents forward-looking discussions on

EPOS Net (in Japanese only)www.eposcard.co.jp/index.html

www.0101maruigroup.co.jp/pdf/

Hiroshi Aoi; Akira Sato, co-founder of Value Create Inc. and general manager ofcommittee_members_en.pdf

is also an official Research Pod X (formerly Twitter) account that is constantly
updated with posts from fledgling researchers.
Apple Podcasts (in Japanese only)
podcasts.apple.com/us/podcast/リサーチpod/id1597451145

Official MARUI GROUP Social Media Accounts
List of official MARUI GROUP social media accounts(contained within MARUI GROUP Social Media Policy)
www.0101maruigroup.co.jp/en/social_media/index.html

Shareholder return policies
www.0101maruigroup.co.jp/en/ir/stock/dividend.html
Basic internal control policy (in Japanese only)www.0101maruigroup.co.jp/ci/pdf/statement/
int_control.pdf
Risk management
www.0101maruigroup.co.jp/en/ci/governance/risk.
html

Spotify (in Japanese only)
open.spotify.com/show/3zxzj5A7WbDqBKdLqCh0Ht

www.0101maruigroup.co.jp/en/ir/lib/brief.html
Annual securities reports
www.0101maruigroup.co.jp/en/ir/lib/sec.html
FACT BOOKs (supplementary financial materials)
www.0101maruigroup.co.jp/en/ir/lib/fact.html
Monthly performance forecasts
www.0101maruigroup.co.jp/en/ir/lib/monthly.html
ESG DATA BOOKs
www.0101maruigroup.co.jp/en/sustainability/lib/
databook.html
GRI and ISO 26000 applicability tables
www.0101maruigroup.co.jp/en/sustainability/lib/gri.
html
Investors guides
www.0101maruigroup.co.jp/en/ir/lib/guide.html
Financial results briefings and videos
www.0101maruigroup.co.jp/en/ir/lib/result.html
MARUI IR DAY materials and videos
www.0101maruigroup.co.jp/en/ir/lib/irday.html
Investor Relations website
www.0101maruigroup.co.jp/en/ir/
IMPACT BOOK
www.0101maruigroup.co.jp/en/ir/lib/impactbook.html
Sustainability website
www.0101maruigroup.co.jp/en/sustainability/

Awards and Recognition 
www.0101maruigroup.co.jp/en/ci/award/

Publications 
Co-creation management reports
www.0101maruigroup.co.jp/en/ir/lib/i-report.html
VISION BOOK 2050 and co-creation sustainability reports
www.0101maruigroup.co.jp/en/sustainability/
lib/s-report.html& magazine (impact co-creation magazine, in Japanese
only)www.0101maruigroup.co.jp/ir/lib/magazine.html
Co-creation wellness reports (in Japanese only)www.0101maruigroup.co.jp/sustainability/lib/wreport.html
Convocation notices for Ordinary General Meetings ofShareholders
www.0101maruigroup.co.jp/en/ir/stock/meeting.html
Co-creation newsletters (shareholders newsletters, inJapanese only)www.0101maruigroup.co.jp/ir/lib/report.html

Videos 
MARUI GROUP Corporate Video—The Future (inJapanese only)
www.youtube.com/watch?v=-WQZCdHfxno
MARUI GROUP’s Impact (in Japanese only)www.youtube.com/watch?v=5tMScyyVb-o

Initiatives related to the TCFD
www.0101maruigroup.co.jp/en/sustainability/
Research Pod X (formerly Twitter) account (in Japanese only)
twitter.com/researchpod0101

102

Committee members

medium- to long-term trends of interest to MARUI GROUP between President
the Company’s Investment Research Department; and researcher Saito. Therewww.0101maruigroup.co.jp/ir/infomail/reg.html

vision2050/3business_02.html

103

EDITORIAL POLICY
Editorial Policy 
MARUI GROUP has been publishing co-creation management
reports as tools for stakeholder engagement since 2015. These
management strategy reports are forged over a process of dozensof planning meetings a year led by President Hiroshi Aoi. Since thefirst co-creation management report was issued in 2015, thesereports have continued to be used to foster understanding regarding
MARUI GROUP’s values and vision for the world. Our co-creation
management reports are complemented by & magazine, aJapanese-only impact co-creation magazine launched in March2023 that provides timely information on MARUI GROUP along with
examples of its social experiment. Co-Creation Management Report
2023 was crafted through a series of discussions spanning 19
months that began with the planning and eventual cancellation of
our co-creation management report for 2022 and included thelaunch of & magazine.

Overview of Planning Process (Period: April 2022–October 2023, 27 meetings) 
Attendees	President Hiroshi Aoi; CFO Hirotsugu Kato; representatives from the Corporate Planning Division, the IR Department, theFinancial Department, the Sustainability Department, the ESG Promotion Department, the Wellbeing Promotion
Department, the General Affairs Department, and the Investment Research Department; and EDGE INTERNATIONAL, INC.
Major Discussion Themes• Approach for co-creation management report for 2022
• Potential for launch of co-creation magazine and impact report• Value creation narrative presented through examples of generated
impact• Examples of innovation looking at interactions between diligence,
time, and digital technologies• Exploration of innovation based on metaphor of a butterfly’s
metamorphosis• Proposal of new form of innovation through combined efforts andsocial experiments• MARUI GROUP’s vision for the future and change in corporate
approach• Definition of co-creation, corporate value, inclusion, etc.
• Role and potential for owned media sources• Cancellation of co-creation management report for 2022 andpublication of & magazine• Approach for and purpose of publishing Co-Creation Management
Report 2023

•P
 ower of interests and businesses that people are inspired tosupport• Individual interests and concept of flow as tools for unleashing
employee creativity•M
 ARUI GROUP’s expertise, capabilities, and intangible assets•R eason for a for-profit company to evolve into a company that
contributes to the resolution of social issues and concept of transitioning from a focus on GDP to focus on “gross domestic
well-being”•G oal of achieving earnings growth (high growth and high returns)
while generating desired impact (happiness)•R epresentative examples of MARUI GROUP’s assets and impacts•E volution from monthly installment payments to embedded financeand concept of a gift economy• Themes that sparked lively discussions at officer meetings andretreats and concepts to be showcased in officer lists and skill
matrixthat offers happiness to allissues, a goal we announced in June 2023, and on the people whowill be indispensable to this evolution.
We sought to explain exactly what constitutes a company that
contributes to the resolution of social issues and what it means forpeople to work to create value. To this end, Co-Creation Management
Report 2023 looks at the thoughts of President Hiroshi Aoi and othermembers of MARUI GROUP’s management and of employees aswell as at the sentiments they direct toward these matters. We havealso provided a glance at the various assets MARUI GROUP is
utilizing in its evolution.
It is our hope that this report can be used as a tool for engagement with stakeholders and to encourage them to take part in theco-creation of value with MARUI GROUP to help us shape a brighter
future. I look forward to your ongoing support of MARUI GROUP.

2050 Vision
Build a world that transcends dichotomies ofimpact and profit
Philosophy
Continue evolving to better aid our customers
Equate the development of our people withthe development of our company
ValuesCreditability should be built together with customers
Pioneer spirit of creating opportunities

Wakana Zama
General Manager, Public Relations Office,General Affairs Department
MARUI GROUP CO., LTD.
koho-ml@0101.co.jp

QR codes used in this report are registered trademarks of DENSO WAVE INCORPORATED.

104

MissionContribute to co-creating an inclusive society

Afterword Thank you for reading Co-Creation Management Report 2023 to its
end. I suspect that some of you may have been surprised by thedecision to cancel our 2022 report. The production process for the2022 report began with a vision of pushing the boundaries of an
integrated report even further than we had done with Co-Creation
Management Report 2021. However, as we went about this, we cameto realize that, if we strayed too far from the standard formula for an
integrated report, it might result in readers who are unfamiliar withMARUI GROUP being unable to gain an understanding of our various
initiatives from the report. It was this realization that led to thedecision to cancel the report.
The discussions that took place in 2022 shaped the process of
preparing Co-Creation Management Report 2023. Specifically, these
discussions helped us reconfirm the purpose of our co-creation
management report as being, not so much about communicating
MARUI GROUP’s management strategies, but rather about placing a
spotlight on the thoughts of management and the faces of employees. This approach is taken to better present our values and philosophy to those who may be interested in engaging in co-creation withMARUI GROUP in the future. It was based on this framing that wemoved forward with the production of our first report in two years.
The resulting report is focused on MARUI GROUP’s policies forevolving into a company that contributes to the resolution of social

MARUI GROUP’s Co-Creation Philosophy

Contact:
Public Relations Office, General Affairs Department
MARUI GROUP CO., LTD.
Tel: 03-3384-0101 (Receptionist) E-mail: koho-ml@0101.co.jp
Other inquiries:
www.0101maruigroup.co.jp/en/question.html

105