The mobile battery sharing business in China has become an essential part of daily life, growing into a massive service used by approximately one out of every two people. In contrast, in Japan, the penetration rate of mobile battery sharing services is only about one in 35 people. We have great expectations and confidence in the high growth potential of this business in Japan. However, even in our VISION2030 (medium-term business plan) looking seven years ahead, we only define the proportion of unique users who might use ChargeSPOT at least once a year as one in every five people.
In other words, if we take the current Chinese market as a reference, there is still a potential for 2.5 times more growth than what we envisage for 2030.
We cannot state for certain how close the usage rate of about one in 35 in Japan will get to China’s rate in the future or when market growth will reach a certain saturation point after 2030. However, if we predict a future where the mobile battery sharing service reaches a penetration rate of one in two people, the business results at that time would be incomparable to what they are now.
Furthermore, the arrival of such a future is undoubtedly a very positive occurrence for us. Mobile battery sharing is a service that was born and evolved in China.
We initially expanded this business in Hong Kong, and even now, our batteries and battery stands are developed and manufactured in China. We regard China as a pioneering market and consistently gather the latest information through our subsidiary in Guangzhou, independent of media reports.
Consequently, we conclude that there are many operational challenges in mobile battery sharing in China, due to the large number of competing companies and the varying service standards compared to Japan, among other factors. This results in fundamental differences in the cost structure and profitability between Chinese battery sharing companies and our operations, which focus mainly on Japan, Hong Kong, and Taiwan.
Specifically, in China, there is no major player like ChargeSPOT, and the market faces over-competition with numerous relatively small companies. As a result, competition for installation sites amid this red ocean has led to skyrocketing installation fees, creating a very challenging financial situation.
Additionally, many battery sharing companies in China do not comply with Apple’s strictly controlled MFi certification for Lightning cables, which significantly distinguishes them from the battery sharing service provided by INFORICH.
Moving forward, we are committed to closely monitoring trends in China, a pioneering market. We will adopt beneficial practices while avoiding business practices that should be avoided to maintain profitability, all while continuing to offer a unique, Japan-refined sharing service that remains distinct from China’s model.