By  on June 13, 2014

TOKYO Zozotown, one of Japan's largest fashion e-commerce players, has closed down the international versions of its website, marking a sharp change in direction from the company's previously lofty international expansion plans.
The retailer, which sells a mix of Japanese and international brands, has gradually scaled back its international operations over the past year. Last month, Zozotown shuttered its English-language website, which shipped to some 84 countries. In March of last year, the retailer closed down its Chinese site, which was a partnership with Japanese mobile phone operator Softbank. In May of last year, it shuttered its South Korean operations, which it ran in partnership with eBay Korea.
A spokeswoman for Start Today Co. Ltd., Zozotown's parent company, said the retailer has altered its international strategy to focus on a new smartphone app called Wear. The app allows people to save their favorite items, post photos of themselves in their daily outfits, and shop items they find via fellow users who they follow. At the moment, the app is only available to consumers in Japan and Taiwan, but the spokeswoman said Zozotown hopes to roll it out to more countries in the future.
"Rather than having people arbitrarily come to shop on our e-commerce site, we want to instead start by attracting people who like fashion, and then get them to shop from our app," she said.
Back in 2011, Yusaku Maezawa, founder and chief executive officer of Start Today, spoke about efforts to expand the business outside of Japan, and said that the international sites had been performing well.
"We've gradually started doing some promotion [campaigns] internationally, so depending on how effective that is, we'll [see how it goes] from now," he told WWD in an interview. "We've put ads in international magazines, as well as online ads. Of course, because we have a lot of Japanese brands, we get many orders from [elsewhere in] Asia, such as Hong Kong, Taiwan, South Korea and China."
But Maezawa had also noted that difficulties remained in selling Japanese clothing to customers overseas.
"Everyone is interested; however, from the viewpoint of Chinese people, it's still expensive," he said. "For American and European [customers], the sizes don't quite work unless [the brands] make things specifically for that [market]."
Zozotown's retreat from international markets — even if temporary — comes at a time when other larger Asian e-commerce players are seeking to internationalize their businesses and corporate profiles, through acquisitions, financial operations or new site launches.
Japan's Rakuten bought Aliso Viejo, Calif.-based for $250 million in 2010 and runs e-commerce sites in several countries including the United States, Brazil, Germany and Indonesia. Rakuten also has a stake in Pinterest, having led a consortium that invested $100 million in the start-up. Meanwhile, China's Alibaba has embarked on a major acquisitions drive ahead of a highly anticipated initial public offering in the United States later this year. Earlier this week, the Chinese Web giant launched a beta version of 11 Main, a multi-category website targeting U.S. consumers.
Still, Zozotown's domestic focus seems to be working for the company, which has posted steady growth in recent years.
For the year ended March 31, Start Today Co., Ltd. posted a 45.5 percent jump in net income to 7.80 billion yen, or $78 million at average exchange rates for the period. Sales over the same time grew 10.1 percent to 38.58 billion yen, or $385.80 million. The company said it expects this year to grow both its net profit and sales by 8.1 percent.

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