General marketplace Mercari yet again failed to turn its robust sales into profit in the first two quarters of 2019. Continued investment that prioritized business growth significantly increased its net loss to Y14.1 billion ($128 million U.S.) in the six-month period leading up to Dec. 31, 2019 from Y4.4 billion ($40 million U.S.) a year earlier.

Net sales surged 38.7% year-on-year to Y32.9 billion. Operating loss increased to Y13.9 billion, compared to Y3.6 billion in 2018, which was primarily due to increases in advertising and personnel expenses, according to the company’s financial statement.

Tokyo-based Mercari was founded in 2013 and entered the U.S. market in 2014. The marketplace is profitable in Japan with its traffic outpacing that of rivals Jmty.jp and Fril.

In Japan, Mercari’s gross merchandise volume (GMV) for the six months was Y281.3 billion, up Y53.3 billion or 23% year-on-year. Net sales rose 20% to Y26.5 billion, while adjusted operating income soared 51% to Y6.7 billion.

Mercari’s U.S. business maintained its solid top-line growth with GMV growing 46% to $127 million U.S.

Despite that growth, “achieving monthly GMV of $100 million this financial year is challenging,” the group said. “We do realize that an increase in awareness will not immediately boost GMV. As to our future plans, we will discuss whether the business merits continued investment in H1 2021 and beyond after assessing the results of H1 2020.”

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