Mercari, the Japanese shopping platform that allows users to buy and sell almost anything, reported its net sales surged nearly 48 percent for the fiscal year ending June 30, but operating losses grew 58.9 percent.
The company said sales reached 76.2 billion yen ($719 million), up 47.6 percent from 51.5 billion yen ($490 million) in fiscal year 2019.
But even as sale volumes soared, operating losses grew to 19.3 billion yen ($180 million), far worse than fiscal year 2019’s 12.1 billion yen ($110 million) in red ink.
Comprehensive losses also increased 34.6 percent to 19 billion yen ($179.2 million) in fiscal 2020 from 14.1 billion ($133.1 million a year earlier. Losses per share likewise grew to 147.86 yen ($1.40) from 94.98 yen (90 cents) in fiscal 2019.
Mercari has seen 45 million downloads of its app and is more mobile-focused than U.S. rival eBay.
PYMNTS’ latest ranking of top shopping apps puts Mercari at No. 7. Walmart topped the list, followed by Amazon, then came Wish. China’s AliExpress was at No. 4, eBay ranked 5th and Target made the No. 6 spot. The final three after Mercari included SHEIN and OfferUp.
Mercari said at the time that it would merge Origami Pay with its own Merpay service to battle competition from SoftBank Group’s rival app PayPay.
The company also plans to compete in U.S. markets against larger rivals with similar business models, like eBay and Craigslist. Mercari has pledged that such an expansion would improve its financial results.
But in contrast to Mercari’s fiscal-year losses, eBay recently beat Wall Street’s Q2 earnings expectations as the eCommerce giant benefited from a flood of online shopping as COVID-19 kept consumers indoors.