Purpose & Profit: Kuradashi becomes Japan’s first B Corp to IPO
Social good platform “Kuradashi” to go public on Tokyo’s Stock Exchange🗼
Kuradashi, a company tackling food loss through its popular e-commerce platform, will be listed on the Growth Market of the Tokyo Stock Exchange on 30th June 2023.
This marks a historic milestone as Kuradashi becomes the first B Corp* in Japan to IPO! 🇯🇵
*B Corps (Certified B Corporations) are companies meeting high standards of social and environmental performance, transparency, and accountability.
Tackling Food Loss Through Innovation
The Kuradashi platform, which markets itself as a social good market, reduces food loss by selling products that are still perfectly edible but cannot be sold through regular sales channels because of impending expiry dates, damaged packaging, or their seasonal nature.
In Japan, food manufacturers follow what is known as the “one-third rule”. Introduced by Japanese retailers in the 1990s in response to demands from customers for only the freshest products, the rule requires producers to deliver food and beverages within the first third of the period spanning from the production date to the expiration date.
This results in a lot of perfectly consumable products going to waste. Some six million tons of food are wasted each year in Japan, half of which is discarded by the food industry. Kuradashi aims to solve that problem through its simple but innovative service.
Aligning with Sanpo Yoshi Principles
The platform offers a truly win-win-win solution, in line with the principle of Sanpo Yoshi (see “Sanpo Yoshi: the Japanese business principle of success through responsibility” for more).
- Partner companies reduce food loss by providing their products, reducing disposal costs, and enhancing their corporate image.
- Customers benefit from products that are sold for up to 97% off the original market price.
- Society gains from less food going to landfill — furthermore, Kuradashi donates up to 5% of sales to a range of charities.
The company has seen strong growth since its founding in 2014. The service now boasts over 450,000 registered users and 1,300 partner companies, offering a broad range of products including fruits, vegetables, fish, meat, coffee, snacks, confectioneries, alcoholic beverages, and beauty products.
To date, Kuradashi has eliminated some 16,000 tons of food waste and donated over 10 million yen to charity. Furthermore, sales in 2022 were up 64% year-on-year.
A Step Forward for Purpose-Driven Businesses & Redefining Capitalism?
Kuradashi and similar companies are leading the way in redefining capitalism (see “Social Business in Japan” for an overview).
While B Corp certification — which proves a company has voluntarily met the highest standards for social and environmental performance, as verified by the nonprofit B Lab — remains relatively unknown in Japan, the number of companies gaining B Corp status is picking up pace. At present, some 17 companies have received the certification and this number is on the rise.
Meanwhile, the Kishida Government’s “Council of New Form of Capitalism Realization” is exploring the creation of a new corporate entity, similar to the Public Benefit Corporation (PBC) in the US, as part of its efforts to promote mission-driven businesses tackling societal problems.
Undoubtedly, many social business enthusiasts will be eagerly watching Kuradashi’s IPO. While its business model has social impact integrated into its very core, there have been cases in other countries where companies have radically changed course post-IPO to prioritise shareholder interests.
One cautionary tale is that of Etsy, a US-based e-commerce website for handmade goods, which abandoned its B Corp status after a historic IPO in 2015 due to shareholder pressure.
Without a doubt, Kuradashi’s IPO will be a historic moment and proves that doing good can also be good for business. Only time will tell how capital markets will react, what this means for the future of social business, and whether this can be an inflection point towards a more conscious form of capitalism in Japan.
Thanks for reading! For more on social business and social innovation in Japan, see some of my other posts here:
