Japan: Mercari (4385) Announces Withdrawal from Spot Work Service
Potential Beneficiary: Timee (215A)
Market Overview: Structural Growth in Spot Work
The spot work (short-term, on-demand jobs) market in Japan has expanded rapidly against the backdrop of chronic labor shortages and increasingly diverse working styles. According to Timee, the market size reached ¥121.6 billion in 2024, more than tripling within two years. However, intensifying competition and heightened regulatory scrutiny have become key challenges for market participants.
Mercari’s Withdrawal
On October 14, 2025, Mercari (4385) announced that it will exit its “Mercari Hallo” spot work service by December 2025. The move highlights the difficulty of achieving differentiation and profitability—even for a large tech company with a massive user base—when competing against incumbents that have already established strong network effects.
Structural Drivers of Growth
Severe Labor Shortages
Industries such as logistics, food service, and retail face chronic labor gaps.
Persol Research Institute projects that by 2035, Japan will face a daily labor shortfall equivalent to 3.84 million workers (17.75 million hours), nearly 1.9x worse than in 2023.
Rising Worker Demand for Flexible Employment
Deregulation of side jobs, removal of the “¥1.03 million wall” tax threshold, and declining real wages have boosted demand for part-time and flexible work.
Spot work services—requiring no resume, interview, or delay in payment—fit well with these needs.
Regulatory Landscape: Stronger Worker Protection
The Ministry of Health, Labour and Welfare (MHLW) has strengthened oversight:
Clarification of Employment Contract Timing & Leave Compensation: Matches made in apps may now be deemed contract formation, exposing firms to obligations for leave allowances if jobs are canceled.
Guidance under the Employment Security Act: The MHLW warned operators against permanently suspending workers for no-shows, forcing revisions to suspension policies.
These measures protect workers but also increase compliance costs and risks for platform operators.
Why Mercari Exited
Short Lifespan: “Mercari Hallo,” launched in March 2024, will shut down in December 2025—just over 18 months of operation.
Competitive Disadvantage: Despite leveraging its 22+ million monthly active users and rapidly accumulating 12 million registered workers, Mercari could not surpass Timee (215A) in matching efficiency or corporate client acquisition.
Network Effects: Timee, founded in 2018, had already established strong corporate ties, particularly in logistics and food service, and built robust know-how in labor management and instant payment systems.
Market Consolidation:
Following Recruit’s cancellation of its planned spot work service and Mercari’s withdrawal, the market structure is increasingly showing a winner-takes-all dynamic. Network effects make scale decisive, and profits are likely to concentrate among the top players—especially Timee (TSE Growth: 215A).
Timee’s Strengths:
Large corporate base (tens of thousands of client companies) ensuring stable job supply.
Strong brand association: “Spot work = Timee.”
Proactive regulatory compliance and rapid adaptation to MHLW guidance.
Conclusion
The spot work market will likely continue expanding as labor structures evolve. Yet, entry barriers have risen sharply. Mercari’s exit signals a shift to a consolidation phase, where established leaders capture most of the value. For investors, Timee (215A) stands out as the prime beneficiary of this concentration.
At the same time, regulatory tightening on labor protection ensures that all platform operators will face ongoing compliance and labor-management risks.
