FY202.6

Financial Results Presentation Material

Table of Contents
1

FY2024.6 Summary

2

Mid-Term Policy

3

FY2024.6 Financial Overview

4

FY2025.6 Financial Forecast/Business Objectives

5

ESG

6

Appendix

7

Basic Information
2

FY2024.6 Summary3

1

FY2024.6 Summary—Record-Level Revenue and Core
Operating Proﬁt1

Financial Results Presentation Material

Business Objectives
at the Start of FY● Consciously balance growth and proﬁtability● Create new businesses and accelerate the growth of existing businesses

while looking ahead to the next 10 years

Strengthening Proﬁtability of
Existing Businesses

Growth of New Areas/
Areas to Enhance

Future Challenges

Marketplace

MercardAdjusted2 core operating margin:

Issued overMarketplace GMV
Growth Rate

40%

(upper limit of full-year target)

FintechRevenue growth rate:

40%

Positive core operating proﬁtUS

reduced loss

Signiﬁcantly
Cut core operating loss by
4.2B JPY (YoY)3

3.4M+9% (YoY)

Mercards

Did not achieve full-year target(+10% or higher)

Mercari Hallo

US GMV Growth Rate

Reached more than

5.0M registered users

in the ﬁrst three months of service-10% (YoY)

Did not get back on track for growth

Crossborder/B2C
Grew crossborder transaction GMV

3.5x (YoY)
Grew B2C GMV 2.7x (YoY)

1. Core operating proﬁt is deﬁned as IFRS operating proﬁt excluding other income/expenses, etc.
2. Proﬁt after deduction of internal transactions with Fintech (outsourced payment processing fees).
3. Based on IFRS core operating proﬁt4

Mid-Term Policy

5Group Mission

Financial Results Presentation Material

2

Circulate all forms of value
to unleash the potential in all people
62

Business Growth Leveraging C2C BaseFinancial Results Presentation Material

External partners (primary distribution) and users

On-demand work

Crossborder transactions

Cash-in using wages

Expand marketplace globally

MerpayB2C

Cash-in using credit

Mercard

Loyalty program

Provide a variety of items

C2C

MAU1: Approx. 23M users

Cryptoassets
Invest sales balance7
1. Quarterly average number of users who browsed our service (app or web) at least once during a given month2

Mid-Term Objectives of Main Businesses
Group-wide

Financial Results Presentation Material

Mid-Term Objectives

Focus Areas■ Work with external partners to realize an ecosystem■ Promote global expansion by growing our US business and strengthening
crossborder transactions■ Create a borderless organization where talent from all over the world can thriveand strengthen I&D

Marketplace■-

Strengthen AI/LLM and data
infrastructure
Strengthen our safe and secureusage environment
Reinforce information security

FintechUS

Mid-Term Objectives

Mid-Term Objectives

Mid-Term Objectives

In addition to the stable growth of the■ Expand Group synergy■ Lift core operating proﬁt to over 10B JPY
and establish Fintech as the second pillarof Mercari Group■ Engage Gen Z and establish namerecognition and the reputation as "theeasiest and safest selling app"
■ Realize sustainable growth whileessentially continuing to break even

Focus Areas

Focus Areas

C2C business, continue to lead themarket with high-level growth ofcrossborder transactions, B2C, etc.
■ Become No. 1 in the on-demand work
industry

Focus Areas-

Promote I&D
Expand globally focusedon crossborder business

Redesign UI/UX using AI/LLMs
Strengthen categories with high pricerangesEnhance crossborder transactions
Grow B2C
Expand on-demand work-

Expand payments and credit balance
focused on the loyalty program
Maintain and enhance AI credit accuracy
and collection rates
Expand our available cryptoasset types
and usage scenarios-

Acquire Gen Z users
Expand crossborder transactions withJapan
Leverage AI and machine learning to
improve UX

8

2

Aim to Achieve Double-Digit Revenue CAGR FY2024–FY2027

US

On-demand work

+40% YoY

B2C
FintechGMV YoY

Approx. 2.7x

US

FintechGrowth in
FY2024.6
Revenue

B2C
Crossborder

Stable growthHigh proﬁtability

Crossborder

GMV YoY

Approx 3.5x

Market size of high growth areas

New business

C2C

FY2024.6
revenue

C2C

FY2027.6
revenue

Marketplace

Financial Results Presentation MaterialHigh growth rate
Disciplined investment● The US online reuse market is projected to be
worth 180B USD in 2030, which is 2.4 times thesize of the market in 2022.2● The deferred payment market for 2027 is
projected to be worth 2.4T JPY, which is double
the size of the market in 2022.3● Annual potential size of the on-demand work
market is approximately 5T JPY4
● The size of the global crossborder e-commercemarket in 2030 is projected to be 7.938T USD,
which is 10 times the size of the market in 2021.5● The size of the Japanese B2C e-commerce market
in 2030 is projected to be approximately 23.9T
JPY, 1.7 times the size of the market in 2022.6

Market size of stable growth areas● Annual potential size of the C2C market(estimated value of unneeded items): Approx
7.6T JPY7

1. The graph is for illustrative purposes only.
2. Source: “Mercari 2023 Reuse Report”
3. Source: Yano Research Institute Ltd. “Online Payment Service Providers 2024 (Survey),” released on April 19, 2024 (Note: Based on the transaction volume of deferred payment service providers)
4. The on-demand work market is expected to expand amid progress to uncover potential markets while capturing a portion of the mid- to long-term part-time and dispatch worker markets. This was calculated based on
the hypothesis that within the total amount of salaries in 2022 (24.9336T JPY) for categories other than full-time employees (such as part-time workers) described in “Statistical Survey of Actual Statistics for Salary in the
Private Sector in 2022,” 20% of existing part-time and dispatch work positions are in the on-demand market.
5. Source: “Report on the Results of FY2022 E-Commerce Market Survey” released by the Ministry of Economy, Trade and Industry (METI) on August 31, 2023. Forecast for the expansion of the scale of the global crossborder
e-commerce market.
6. Source: “Report on the Results of FY2022 E-Commerce Market Survey” released by the Ministry of Economy, Trade and Industry on August 31, 2023. The 2022 e-commerce adoption rate (9.1%) in B2C e-commerce for goods
was calculated based on the projected EC adoption rate for 2030 (15.6%) outlined in the NLI Research Institute publication “Long-term forecast on commercial facility sales”
7. Source: Ministry of Economy, Trade and Industry (April 2017 and April 2018), total market size including such things as secondhand store sales, online secondhand sales, and auctions. Does not include the sales ofautomobiles, motorbikes, or moped scooters.

9

2

Aiming for Core Operating Proﬁt CAGR FY2024–FY2027
of 25% or Higher
Aim essentially for top-line growth associatedwith increased proﬁtability

Financial Results Presentation Material

Consciously balance
growth and proﬁtability

Double-digit growthof revenue CAGR

Prioritize high top-line growth

171.9
1,720

(Billion JPY)

187.4

147.0
106.1

Core operating proﬁt
CAGR of 25% or higher

76.2
51.6

16.7

35.7

18.8

5.1
FY2018.6

FY2019.6

FY2020.6

FY2021.6

FY2022.6

FY2023.6

FY2024.6

FY2025.6

FY2026.6

FY2027.6

-3.7

-4.4
-12.1
-19.3

1. Following the transition to IFRS as of FY2024.6, disclosure is conducted based on IFRS beginning with the business results for FY2023.6.
2. In the event an opportunity arises for signiﬁcant growth that will contribute to the future growth of the company, a temporary loss may be incurred resulting from making a ﬂexible investment, but thecompany will explain the investment if this occurs.

10

FY2024.6 Financial Overview

11

3

Consolidated Results1 (Full Year)
Core Operating Proﬁt2

Revenue
Financial Results Presentation Material(Billion JPY)

YoY
+9%Billion JPY(Billion JPY)

1. Following the transition to IFRS as of FY2024.6, disclosure is conducted based on IFRS beginning with the business results for FY2023.6.
2. Core operating proﬁt is deﬁned as IFRS operating proﬁt excluding other income/expenses, etc.

YoY

Billion JPY

+13%

12

3

Consolidated Results1 (Quarterly)Core Operating Proﬁt2

Revenue
Financial Results Presentation Material(Billion JPY)

(Billion JPY)

YoY

+5%
Billion JPY

YoY

-9%
Billion JPY

1. Following the transition to IFRS as of FY2024.6, disclosure is conducted based on IFRS beginning with the business results for FY2023.6.
2. Core operating proﬁt is deﬁned as IFRS operating proﬁt excluding other income/expenses, etc.

13

3Marketplace—Summary

Financial Results Presentation Material

Business
Objectives at theStart of FY2024.6

Focus on top-line growth while continuing disciplined investments.
Aim to achieve GMV growth of 10% or higher and adjusted1 core
operating margin2 of 30–40% by focusing on strengthened areas inaddition to marketing investments and product developments.

Although areas to enhance and the loyalty program contributed to the full-year GMV
growth rate of +9% YoY, we did not achieve our target
Areas supporting future growth expanded, including such things as crossborder GMV
growth of 3.5x YoY and B2C GMV growth of 2.7x while Mercari Hallo reached over 5M
registered users less than three months after launching the service
Adjusted core operating margin achieved high proﬁtability of 40%, including
investment in Mercari Hallo

1. Proﬁt after deduction of internal transactions with Fintech (outsourced payment processing fees)
2. Core operating proﬁt is deﬁned as IFRS operating proﬁt excluding other income/expenses, etc.

14

3Marketplace—Results1 (Full Year)
GMV2/MAU

Revenue
YoY +2%Mercari JP(Billion JPY)

Million users

Financial Results Presentation Material

GMV (Billion JPY)
MAU (Million users)

Adjusted5 Core Operating
Proﬁt/Margin6

Marketplace

A portion of point-related expenses
totaling approx. 1.2B JPY (attributed toadvertising costs) were deducted fromrevenue ﬁgures4(YoY growth before deductions: +7%)

(Billion JPY)
Adjusted core operating proﬁt
Adjusted core operating margin

Billion JPY

Billion JPY

YoY
+9%

YoY
+5%

Mercari JP

Marketplace3

Includes Mercari
Hallo ﬁgures

YoY -4 ppts
Billion JPY

YoY
-3%

Mercari JP

1. Following the transition to IFRS as of FY2024.6, disclosure is conducted based on IFRS beginning with the business results for FY2023.6.
2. Aggregate transaction value after adjusting for cancellations. Figures do not include Mercari Hallo.
3. FY2022.6 and FY2023.6 are primarily the business results of C2C, B2C, and crossborder transactions. The business results of Mercari Hallo are included starting in FY2024.6.
4. In accordance with accounting standards, starting in FY2024.6 Q4, a portion of point-related expenses (attributed to advertising costs) are deducted from revenue ﬁgures.
5. Proﬁt after deduction of internal transactions with Fintech (outsourced payment processing fees).
6. Core operating proﬁt is deﬁned as IFRS operating proﬁt excluding other income/expenses, etc.
7. Figure primarily represents C2C and B2C results from which company-wide expenses were deducted.

Marketplace3,715Marketplace—Proﬁt and Cost Composition (Quarterly)

Financial Results Presentation Material

3

1

2

3

4

J GAAP

IFRS

1. Proﬁt after deduction of internal transactions with Fintech (outsourced payment processing fees)
2. Core operating proﬁt is deﬁned as IFRS operating proﬁt excluding other income/expenses, etc.
3. In accordance with accounting standards, starting in FY2024.6 Q4, a portion of point-related expenses (attributed to advertising costs) are deducted from revenue ﬁgures and advertising expenses
4. Outsourcing expenses, land rent and depreciation, etc.

16

3Marketplace—Results (Quarterly)
GMV1/MAU

Financial Results Presentation Material

GMV (Billion JPY)
MAU (Million users)

Adjusted3 Core Operating
Proﬁt/Margin4

Revenue(Billion JPY)

YoY +2%Millionusers
Billion
JPY

YoY
+6%

(Billion JPY)
Adjusted core operating proﬁt
Adjusted core operating margin

A portion of point-related expenses
totaling approx. 1.2B JPY (attributed toadvertising costs) were deducted fromrevenue ﬁgures2(YoY growth before deductions: +4%)

Includes Mercari
Hallo ﬁgures

Billion
JPY

YoY
-1%5

1. Aggregate transaction value after adjusting for cancellations. Figures do not include Mercari Hallo.
2. In accordance with accounting standards, starting in FY2024.6 Q4 a portion of point-related expenses (attributed to advertising costs) are deducted from revenue ﬁgures.
3. Proﬁt after deduction of internal transactions with Fintech (outsourced payment processing fees)
4. Core operating proﬁt is deﬁned as IFRS operating proﬁt excluding other income/expenses, etc.
5. The YoY growth rate for revenue has been corrected from +1% to -1% (corrected August 14, 2024).

YoY-3 ppts
Billion
JPY

YoY
-7%

17

3

Fintech—Summary

Financial Results Presentation Material

Business
Objectives at theStart of FY2024.6

Focus on acquiring Mercard holders and aim to enhanceGroup synergy

Led by the strength of Mercard, achieved high growth for full-year revenue of+40% YoY and attained full-year core operating proﬁt1 for a second consecutive
year
Expanded Group synergy by acquiring Mercard holders- Issued more than 3.4 million Mercards- ARPU improved by 50% within Mercari after users became cardholders2- Mercari payment rate improved by 6 ppts following start of Mercard service3

Reached more than 2.2 million cryptoasset accounts created, and the numberof accounts created in the year under review was No. 1 in the industry4
1. Core operating proﬁt is deﬁned as IFRS operating proﬁt excluding other income/expenses, etc.
2. Average ARPU for FY2024.6 Q3 of all users who signed up for Mercard in the entire period since Mercard was launched.
3. Scope of increase from FY2023.6 Q1 to FY2023.6 Q4
4. According to cryptoasset monthly trading data of the Japan Virtual and Crypto assets Exchange Association, 3.1 million accounts were created during the most recent one-year period (March 31, 2023,
to March 31, 2024) for which data exists. During the same period, Mercari Group saw the creation of 1.91 million cryptoasset trading accounts, comprising more than half (61.5%) of newly createdaccounts for the entire industry.

18

3

Fintech—Results1 (Full Year)
Core Operating Proﬁt2

Revenue(Billion JPY)

Financial Results Presentation Material

Billion
JPY(Billion JPY)

YoY
+40%

1

Billion
JPY

YoY
+57%

Billion
JPY

YoY
+51%

BillionJPY

MerpayFintech3

MerpayFintech3

1. Following the transition to IFRS as of FY2024.6, disclosure is conducted based on IFRS beginning with the business results for FY2023.6. Net sales and operating income after deduction of internaltransactions between Marketplace and Fintech (outsourced payment processing fees).
2. Core operating proﬁt is deﬁned as IFRS operating proﬁt excluding other income/expenses, etc.
3. Mainly reﬂects the results of Merpay, Inc. and Mercoin, Inc.

19

3

Fintech—Results (Quarterly)
RevenueCore Operating Proﬁt(Billion JPY)

(Billion JPY)

BillionJPY
Financial Results Presentation Material

Breakdown of core
operating proﬁt3

2

1

Billion
JPY

YoY

+32%
Billion
JPY

YoY

+39%

BillionJPY

1

1. Proﬁt after deduction of internal transactions with Fintech (outsourced payment processing fees)
2. Core operating proﬁt is deﬁned as IFRS operating proﬁt excluding other income/expenses, etc.
3. Investment for new services: For management accounting purposes, total of costs related to the promotion of Mercard and cryptoasset trading services, and point-back rewards related to Mercard
usage; proﬁt excluding investment for new services: Core operating proﬁt (IFRS) minus the amount invested in new services20

3

Fintech—Expansion of Credit Balance and
the Growth of Credit
Credit Balance2 and Collection Rates3

Breakdown of Revenue
Financial Results Presentation Material(Billion JPY)

(Billion JPY)

1

BillionJPY

Billion
JPY

YoY

+60%
BillionJPY

Billion
JPY

YoY

+52%

1. Includes revenue of Mercoin, Inc., bank withdrawal fees, expiration and seizure of sales balance, and Mercard reissuance fees, etc.
2. Merpay Smart Payments (lump-sum payment or ﬁxed-amount payment) and Smart Money credit balance at the end of the quarter (excludes debt converted into bankruptcy reorganization debt)
3. Weighted average rate of the quarterly cumulative collections completed within the past 11 months compared to the amount of Merpay Smart Payments (lump-sum payment and ﬁxed-amount payment) andSmart Money billed in the past 11 months (excludes bankruptcy reorganization debt)

21

3

US—Summary

Financial Results Presentation Material

Business
Objectives at theStart of FY2024.6

Focus on reﬁning the product to strengthen retention ofexisting users and aim to get back on track for growth
Focus on engaging Gen Z for future growth

Due to the effects of external factors, including the extended period of inﬂation, we wereunable to get back on track for growth
In order to stimulate purchases by increasing the number of listings and varying service fees
according to supply and demand, we removed selling fees and changed to a business model
where the buyers pay service fees. We are seeing signs of improvement in such things as thenumber of listings, but we have yet to gain a contribution to GMV at this time.
We reduced losses signiﬁcantly, primarily by reviewing ﬁxed costs including marketing
expenses and personnel expenses. In addition, in FY2024.6 Q4, we restructured ourorganization toward breaking even in FY2025.6.

22

3

US—Results (US GAAP/Full Year)
GMV/MAU(Million USD)

GMV (Million USD)
MAU (Million users)
Financial Results Presentation Material

Adjusted Operating
Proﬁt1

Revenue(Million USD)

Million
users

YoY
+1%
MillionUSD
Million
USD

YoY
-10%

1. Adjusted operating proﬁt after non-cash items (i.e., stock-based compensation and depreciation) are deducted

Million
USD

YoY
-9%

23

3

US—Results (US GAAP/Quarterly)
GMV/MAUGMV (Million USD)
MAU (Million users)

Financial Results Presentation Material

Adjusted Operating
Proﬁt1

Revenue(Million USD)

Million
users

YoY
+1%
Million
USD

YoY
-9%

1. Adjusted operating proﬁt after non-cash items (i.e., stock-based compensation and depreciation) are deducted(Million USD)

Million
USD

YoY
-12%
Million
USD

24

FY2025.6 Financial Forecast/Business Objectives

25

4Disclosing Consolidated Financial Forecast1
at the Beginning of the Fiscal Year for the First Time●

Core operating proﬁt is expected to accumulate concentrated in H2

Core Operating Proﬁt1

Financial Results Presentation Material

Revenue

200.0–210.0B JPY
YoY+7–12%

22.0–25.0B JPY
YoY+17–33%26
1. Following the transition to IFRS as of FY2024.6, disclosure is conducted based on IFRS beginning with the business results for FY2023.6.

4

FY2025.6 Business Objectives
Consolidated
連結
Guidance
Core operating proﬁt1

Revenue
Financial Results Presentation Material

Policy/Major Initiatives

200.0–210.0B JPY 22.0–25.0B JPY● Essentially aim for top-line growth that will lead toincreased proﬁts● Expand businesses centered around Group synergy

Marketplace

FintechUS

Guidance

Guidance

Guidance

GMV growth rate: around +10%
Adjusted1 core operating
margin2: 37–42%
Policy/Major Initiatives● Redesign UI/UX using AI/LLM andstrengthen high-price categories● Achieve strong growth of crossbordertransactions and the B2C business● Increase workers and businesslocations for Mercari Hallo andimprove the productCore operating proﬁt1: 3.0B
JPY or higher
Policy/Major Initiatives● Transition to a phase ofcontinuously increasing proﬁt● Acquire Mercard holders andencourage use● Enrich cryptoasset-related
features1. Core operating proﬁt is deﬁned as IFRS operating proﬁt excluding other income/expenses, etc.
2. Proﬁt after deduction of internal transactions with Fintech (outsourced payment processing fees)
3. Envisioning break-even based on IFRS core operating proﬁt

Break even3

Policy/Major Initiatives● Get back on track for growth● Expand crossborder transactions
with Mercari in Japan● Enhance accuracy of the fee
model

27

4

Japan Region—Group Synergy Overview
MAU: approx. 23M
GMV: over 1T JPY

Japan Region

Financial Results Presentation Material

Marketplace

Identity-veriﬁed users: over 16M
Mercards issued: over 3.4M
Crypto trading accounts: over 2.2M

MAU, sales balance, data

C2C/B2C
Purchasing
power thanks
to wages

MAU

Mercard (loyalty program), credit,
payment features, identity veriﬁcation

On-demand
work

FintechCash-in of wages1

Workers: 5M
Business
locations: 50K

Japan Region proﬁtability enhancements
Increased GMV as a resultof higher ARPU

Decreased external
payment processing fees

1. Aim to encourage circulation through seamless integration of wages

Expanded use of credit
services

Expanded use of
on-demand work service

28

4Marketplace—Business Objectives
Aim for a GMV growth rate of around +10% YoY and an adjusted core
operating margin of 37–42% through strong growth of crossbordertransactions and B2C, in addition to steady growth of the C2C business

Financial Results Presentation Material

PolicyInitiatives● C2C○ Improve UI/UX through implementing AI/LLM
features to activate transactions○ Strengthen high-price categories● Crossborder transactions○ Strengthen partnerships with major partnercompanies○ Expand covered regions● B2C○ Acquire large-scale merchants in categories
such as reuse businesses○ Improve features to support increasing sales

Global Crossborder
E-CommerceMarket Size1

Domestic B2C
E-CommerceMarket Size2

Approx.

Approx.
約倍
times
largerlarger

13.9T JPY

7,938.0B USD

10 times

1.71.7

23.9T JPY

785.0B USD

Strengths

User base of
approx. 23M
peopleSafe andsecure usage
environment

Highlyconvenient
UI/UX utilizing
technology

2021

2030
Forecast

2022

2030
Forecast

1. Source: “FY2022 E-Commerce Market Survey Report”, Ministry of Economy, Trade and Industry (published August 31, 2023). Prediction of expansion in the global crossborder e-commerce market size.
2. Source: “FY2022 E-Commerce Market Survey Report”, Ministry of Economy, Trade and Industry (published August 31, 2023). Calculated based on the assumption that the e-commerce conversion rate
for the market size of B2C e-commerce (goods) in 2022 (9.1%) will grow according to the prediction for 2030 in “Long-Term Predictions for Revenue of Commercial Facilities” published by NLI ResearchInstitute (15.6%).

29

4Marketplace—Accelerating Marketplace Growth
Through Crossborder Transactions and B2C●Strengthen purchases/listings and enhance AOV in the C2C business through strong
growth in crossborder transactions and the B2C businesses

Financial Results Presentation Material

Marketplace

Crossborder

B2C

Crossborder

B2C

Approx.

Approx.

3.5 times

2.7 times

FY2024.6 GMV(YoY)

Overseas (buyers)

Merchants (listers)

FY2024.6 GMV
(YoY)

Aim

Purchase of items
listed in Japan

Purchase of items
listed by merchants

Aim● Strengthen
purchases- Enhance ARPU

(Number ofpurchases x AOV)

Individuals(listers)

C2C

Buying/selling
betweenindividuals

Individuals(buyers)● Strengthen listings- Increase listings- Strengthen
categories

C2C
30

4

Marketplace—On-Demand Work Business Objectives
Establish an environment enabling the service to be used
across the country and aim to become the number-one
service in Japan in the medium term

Financial Results Presentation Material

PolicyInitiatives● Acquire merchants○ Nationwide chains with many open positions○ Local partners that have a strong regional presence● Acquire workers○ Utilize Mercari’s user base
● Improve UI/UX○ Implement a feature for workers and businesses torate each other○ Implement an alumni connect feature1

Strengths

User base of
23M people
across thecountry andof all ages

Seamless
integration with
Mercari andMerpaySafe andsecure usage
environment

Potential On-Demand Work
Market Size2
Approx.
約 times
倍2121

5T JPY3

larger

240.0B JPY2

1. A feature enabling businesses to invite workers who have experience working in the same job or at other locations of the same business to a group, encouraging them to apply for job postings (patentpending)
2. Gross transaction volume estimated by Mercari based on the total revenue of the one-off job listing information service market, short-term job talent referral service market, and talent matching
service market published by a research agency
3. Projections show that the on-demand work market will expand in the mid-to-long term by acquiring a portion of the part-time job market and temporary employee market, as well as uncovering
potential markets. The size of these potential markets is calculated assuming that, of the 24,933.6 billion JPY total pay received by workers other than full-time employees (such as part-time workers) in
2022 (as published by the National Tax Agency in the results of their FY2022 Statistical Survey of Actual Status for Salary in the Private Sector), 20% of the existing part-time job market and temporary
employee market will become part of the on-demand work market.

31

4

Fintech—Business Objectives
Transition to a phase of continuously increasing proﬁt throughsteady accumulation of credit balance; aim for core operating
proﬁt of 3.0B JPY or higher

Financial Results Presentation Material

PolicyDeferred Payment Service Market Size1

Initiatives● Grow the credit business further○ Acquire Mercard holders○ Encourage use through UX enhancements
such as expansions to payment methods andthe loyalty program● Enrich cryptoasset-related features○ Enhance convenience through updates suchas adding a savings feature

Strengths

Collaboration
withMarketplace

Unique credit

Approx.

2.4T JPY

2 timeslarger

1.2T JPY

High identity
veriﬁcationrate

1. Source: E-commerce Payment Services (Payment Gateway) Market in Japan: Key Research Findings 2024. Survey by Yano Research Institute(note: based on the transaction amount of deferred payment service providers)32

4

US—Business Objectives
Commit to breaking even and aim to get back on
track for growth

Financial Results Presentation Material

PolicyUS Online Reuse Market1

Initiatives● Create buying opportunities through crossbordertransactions with Mercari in Japan○ Aim to activate transactions by increasing available
listings of items from Japan that are in high demandin the US● Update fee model○ Implement and continually enhance accuracy of asystem in which fee rates ﬂuctuate based on supply
and demand, utilizing AI/machine learning

Unique positioning
as a crossStrengths
category C2C
marketplace

1. Source: Mercari 2023 Reuse Report

A variety ofdeliveryoptions

Approx.

2.4 times

180.0B USD

larger

74.0B USDNo selling
fees

2022

2030
Forecast

33

Financial Results Presentation Material

4

US—The Road to Breaking Even

Set breaking even in
FY2025.6 through highGMV growth as aninternal target

Beginning of
FY2023.6

Released newfeatures andimprovements, but
did not achieve GMV
growth; aimed forhigh growth throughdrastic changes tothe fee model

Saw signs ofimprovement insome KPIs, such as
number of listings,
but these only had
a limited impact on
GMV

FY2024.6 Q3

Determined that we would
not achieve our target ofbreaking even throughGMV growth and carriedout a restructuring of theorganization, including
reductions to theworkforce
Carried out cuts to
executive compensation
for a certain period of time
as executive responsibility
for the large-scale layoffs

FY2024.6 Q4Achieve
break-even interms of IFRS core
operating proﬁt
for the full year

Goal for FY2025.6

34

4

Financial Policies

Financial Results Presentation Material●

Consolidated●●

Fintech●●Approach toShareholder
Returns●

Essentially strengthen our capital through top-line growth that willlead to increased proﬁts
Diversify debt ﬁnancing methods, lengthen ﬁnancing periods, andspread out repayment periods to strengthen our ﬁnancial foundation
Promote non-recourse1 receivable liquidation as our basic ﬁnancing
policyMaintain/enhance our collection rate
Strengthen balance sheet management through asset and liability
management (ALM)2
For the foreseeable future, we will prioritize strengthening our
ﬁnancial foundation through investment in growth opportunities
and our internal reserves; we do not have plans to pay dividends atpresent

1. A method of ﬁnancing in which the amount collected from the credit is the only source of repayment, and the repayment obligation is not borne by Mercari
2. A method of managing risks by comprehensively looking at assets and liabilities

35

ESG

36

5

ESG—Materiality●

Mercari deﬁnes our materiality as important topics that relate to creating value to contribute toresolving social and environmental issues through our business, and creating the managementfoundation necessary for continuous growth.

Financial Results Presentation Material

MISSION

Circulate all forms of value tounleash the potential in all people(1) Empowerment of Individuals and Society
By creating opportunities for anyone to realize their dreams and contribute to society and the people
around them, we will achieve a world that unleashes the potential in all people.

(2) Creating a World That Circulates All Forms of Value
SocialImpactBusiness Value
Created ThroughOur Products andServices

We strive to be a planet-positive company that contributes to solving environmental issues through its
business activities by realizing a society in which all forms of value—not just physical goods andmoney—circulate seamlessly.

(3) Creating a New User Experience Through Technology
We utilize data, AI, and other innovative technologies to constantly evolve our products and create new user
experiences through the seamless exchange of value.

(4) Building Long-Term Public Trust
Organizational andManagement Foundations
Supporting the Creation of Value

We fulﬁll our responsibilities as a public entity and build public trust by establishing a robust and highly
transparent decision-making process, and through more effective corporate governance and thoroughcompliance.
We contribute to the realization of healthy internet services around the world by achieving a safe, secure,and fair transaction environment, and also by educating and sharing information throughout the industry.

(5) Unleashing the Potential in Diverse Talent Worldwide
We will aim to be a company that can continue to grow sustainably by creating an environment in which37
people from diverse backgrounds all around the world can reach their full potential.

5

Our Structure for Promoting ESG●

Financial Results Presentation Material●

In July 2024, we merged the functions of the ESG Council1 with those of the Executive Committee, which integrates
the plan of execution for each material topic into our annual business plan.
The monitoring of individual material topics, which was shifted into a structure promoting business strategies andinitiatives for material topics more seamlessly, is executed by the Executive Committee each quarter in tandem with
monitoring the progress of our business plan. The committee ultimately reports the monitoring results to the Boardof Directors. We aim to further promote ESG through these structures and processes.

Board of Directors
Reports

Supervises

Executive Committee

Business plan
Promotion owners are chosen for each material topic from among the Executive Ofﬁcers
Material Topic 1

Material Topic 2

Material Topic 3

Material Topic 4

Material Topic 5

Empowerment of
Individuals andSociety

Creating a World That
Circulates All Forms
of Value

Creating a New User
Experience ThroughTechnology

Building Long-Term
Public Trust

Unleashing the
Potential in Diverse
Talent Worldwide

Advisory Board on
the Ideal Form of aMarketplace

I&D Council

1. The I&D Council and the Advisory Board on the Ideal Form of a Marketplace, which were subcommittees of the ESG Council established in December 2021, continue to meet periodically as meetingbodies that promote each material topic.

38

5

Our Structure for Promoting ESG●

Financial Results Presentation Material●

Mercari was selected to join the FTSE Blossom Japan Sector Relative Index for the ﬁrst time,
marking Mercari’s inclusion in ﬁve of the six ESG indices featuring Japanese companies adopted by
GPIF
We plan to disclose more details in our Impact Report 2024, which will be published in late
September 2024

Environment● 540K tons of greenhouse gas
emissions avoided as a resultof Mercari’s business1● Certiﬁed as Eco-First
Company2 by Ministry of theEnvironment● Published TCFD disclosures

Social● Percentage of women directors: 30%3
● Reached a total of 220,471 donations(212,218,393 JPY) through Mercari
Donation3● Implemented corrective measures toaddress the gender pay gap4
● Joined the FIDO Alliance board5● Ranked as the top company in perceived
developer experience as chosen byengineers for three consecutive years6

Governance● Transitioned to amonitoring-type Board of
Directors and enhanced
effectiveness through thetransition to a Company withThree Committees● Percentage of Outside
Directors: 60%3

1. Estimated based on factors such as the greenhouse gas emissions involved in the product lifecycle and delivery, frequency of use of Mercari, and length of product use life, under the assumption that
items bought on Mercari are used in place of new items, thus avoiding greenhouse gas emissions
2. To be certiﬁed as an environmental leader within their industry, a company must pledge to the Minister of the Environment voluntary commitments to achieving environmental goals.
3. As of June 30, 2024
4. In August 2023, reduced the unexplained pay gap found at Mercari from 7.0% to 2.5%
5. An international standardization organization promoting FIDO Authentication, a simple and reliable authentication method that reduces reliance on passwords
6. From Japan CTO Association’s Developer eXperience AWARD 2024 rankings
7. As of May 31, 2024

39

ESG—FY2025.6 Focus Areas

5●

We have deﬁned focus areas in line with our material topics and will move ahead with them alongside ourbusiness strategy

Financial Results Presentation Material

Material Topic

FY2025.6 Focus Areas

1. Empowerment of Individuals
and Society●

Realizing a world where all people’s potential is unleashed2. Creating a World That
Circulates All Forms of Value●●

Expanding our positive impact in line with our business growth
Expanding the circulation of value on a global scale

3. Creating a New User Experience
Through Technology●●

Innovating features using data and AI
Creating new innovations using our user base

4. Building Long-Term Public
Trust

●
●

Realizing safe, secure, and fair transactions
Earning the trust of users and stakeholders (society, investors, media,
etc.)

●
●
●

Developing and promoting diverse talent
Embodying inclusion & diversity
Building a productive organizational environment to take on boldchallenges

5. Unleashing the Potential in
Diverse Talent Worldwide

40

Appendix

41

6

Board of Directors Structure●

Appointing Outside Directors with a wealth of knowledge and experience in a variety of areas torealize a transparent and highly diverse organization

Financial Results Presentation Material

10 Directors
Directors (4)Shintaro Yamada

Fumiaki Koizumi

Representative Executive
and CEO

OfﬁcerPresident / CEO of
Kashima Antlers F.C. Co.,Ltd.

Sayaka Eda

Mayumi Tochinoki

Executive Ofﬁcer, Senior Vice Presidentof Corporate, and CFO

Independent Outside Directors (6)Makiko Shinoda

Masayuki
Watanabe

Takuya Kitagawa

Daiken Tsunoda

Kazuhiko
ToyamaFumiyuki
Fukushima
42

Financial Results Presentation Material

6

Governance Structure (Independent Outside Directors)

Makiko Shinoda

Masayuki Watanabe

Chair of theCompensation
Committee

•
•
•
•
•
•

Takuya Kitagawa

Background••••

The Long-Term Credit Bank of Japan, Limited(currently SBI Shinsei Bank, Limited)
McKinsey & Company, Inc.
Novartis Pharma K.K.
Head of Finance of Nestlé Nutrition K.K.
(currently Nestlé Health Science)
Director CFO of Hobonichi Co., Ltd.
Director of YeLL Inc. (current position)

McKinsey & Company, Inc.
Co-founder of DeNA Co., Ltd.
CEO of Quipper Ltd.
Director of FOODCODE, LTD. (current
position)••••Managing Executive Ofﬁcer, CDO of
Technology Division of Rakuten Group, Inc.
Director of Rakuten Data Marketing, Inc.,
Co-founder and Director, Public Interest
Well-being for Planet Earth Foundation(current position)
President and Director, QuEra Computing(current position)

Reasons for Selection
as Outside Directors•

Professional knowledge and deep experiencein I&D, ESG, ﬁnance, etc.

•

Knowledge of global expansion ofbusiness in tech companies••

Knowledge in technology areas such as AI
and data science
Experience in the use of AI and data forbusiness creation and social issues

43Governance Structure (Independent Outside Directors)

Financial Results Presentation Material

6

Kazuhiko Toyama

Daiken Tsunoda

Fumiyuki Fukushima

Chair of the Nominating
Committee

Chair of the Audit
Committee

Background•
Partner of Mori Sogo (Now: Mori Hamada & Matsumoto)•Partner of Nakamura & Tsunoda (currently Nakamura, Tsunoda &Matsumoto)•Outside Corporate Auditor of INES Corporation
Outside Corporate Auditor and Outside Director of Mitsui Sumitomo •Insurance Group Holdings, Incorporated (currently MS&AD Insurance•Group Holdings, Inc.)•
Outside Director of Culture Convenience Club Co.,Ltd. (current

•
•
•
•

•

position)•
Outside Director of Eisai Co., Ltd. (Audit Committee Member)
Outside Director (Member of the Audit and Supervisory Committee) of•
Sumitomo Mitsui Banking Corporation (Audit & Supervisory
Committee Member) (current position)•
Established Daiken Tsunoda Law Ofﬁce, Lawyer (current position)•••

Boston Consulting Group•
Representative Director and President of Corporate Direction
Inc.
•
Representative Director, CEO of Industrial Growth Platform, Inc., •Outside Director of Panasonic Corporation (currently PanasonicHoldings Corporation) (current position)
Outside Director of Tokyo Electric Power Company Holdings, Inc. •Representative Director, President of Japan Platform ofIndustrial Transformation, Inc. (current position)•
Chairman of Industrial Growth Platform, Inc. IGPI Group (current
position)
Chairman of General Incorporated Association Japan Associationof Corporate Directors•
Outside Director of Kuroda Precision Industries Ltd. (current
position)

Koyo Audit Firm
KPMG AZSA & Co. (currently KPMG AZSA LLC)
Outside Audit & Supervisory Board Member ofFindy Inc. (current position)
Outside Audit & Supervisory Board Member ofKashima Antlers F.C. Co., Ltd. (current position)
Outside Director (Member of the Audit andSupervisory Committee) of Chatwork Co., Ltd.
(current position)
Outside Director of dely, Inc. (current position)

Reasons for Selection as Outside Directors•

Strong insight in the areas of corporate
law and corporate governance••

Extensive knowledge and deep insight in
the areas of management and corporate
governanceDeep experience in promoting innovation
to solve social issues•

Experience in auditing and extensive
knowledge of accounting and internal
controls

44

6

Major Itemization of Consolidated BS

Financial Results Presentation Material●

We will continue to leverage various methods of ﬁnancing and appropriately control ourbalance sheet to maintain a sound ﬁnancial foundation
Mainly deposits
related to user funds

With regard to preservationof user funds, we act inaccordance with laws
regarding funds transfer
services, etc., by depositing
funds to the authorities andconcluding a Guarantee
Contract for Security Deposits
for Providing Funds Transfer
Services with ﬁnancial
institutions
Mainly credit fromtransactions within Mercari(formerly under “Other
receivable”), items formerly
under “Trade accounts
receivable”, items formerly
under “Allowance for
doubtful accounts”, etc.

Credit balancefrom Merpay’s
credit services

CB2 + borrowings

Cash on hand andin banks
191.9B JPY(excluding funds ﬁnanced byliquidating receivables)

77.6B JPY

Deposits received
201.1B JPY
Guarantee deposits
81.6B JPY
Trade and other receivables
195.4B JPY

Of receivables,
credit receivablebalance187.2B JPY
Other: 32.7B JPY

Borrowings from liquidatingreceivables
112.2B JPY

Of borrowings,
non-recourse ﬁnancing3

99.5B JPY

Other: 38.5B JPY

CB2 and long-term borrowings

Mainly Mercari sales
balance (including US)
and wallet balance fromusers adding funds frombanks
Funds ﬁnanced byliquidating receivables

Liquidated lump-sum payment
and ﬁxed-amount payment
receivables for Merpay Smart
Payments. Starting FY2023.6, wehave carried out non-recourse1
ﬁnancing for a portion ofliquidated receivables.

Total equity
72.1B JPY

Total assets at end of FY2024.6 Q4: 501.7B JPY
1. A method of ﬁnancing in which the amount collected from the credit is the only source of repayment, and the repayment obligation is not borne by Mercari
2. Convertible bond-type bonds with stock acquisition rights issued in July 2021 (due in 2026: 25 billion JPY, due in 2028: 25 billion JPY).
3. Non-recourse ﬁnancing amount of Merpay Smart Payments (lump-sum payment and ﬁxed-amount payment)

45

6

Approach to Financing for Credit Services

Financial Results Presentation Material●

We plan to expand and diversify ﬁnancing in sync with the growth of our credit services
centered on non-recourse1 receivable liquidation, in which ﬁnancing is based on conﬁdence inthe actual credit receivable for Merpay Smart Payments
Liquidation of receivables● We have received an external ratingfor Merpay Smart Payments
ﬁxed-amount payment receivables
and carried out non-recourse
ﬁnancing for a total of 74.0B JPY.
● Additionally, we have liquidated
receivables in line with the growth of
our credit balance per month, withthe maximum amount set to 34.0B
JPY for ﬁxed-amount payment and
50.0B JPY for lump-sum payment,
and improved the efﬁciency of ourfunds.
● We plan to carry out non-recourse
ﬁnancing as necessary to match thegrowth of our credit services going
forward.

Other funds used

ReceivablecreditLiquidation ofﬁxed-amountpayment
receivables
74.0B JPY+
Max. 34.0B JPY

Liquidation of
lump-sumpayment
receivables
Max. 50.0B JPY

Plan to continue carrying
out non-recourse
ﬁnancing with externalratings going forward; will
also carry out
supplemental ﬁnancing
within range of the
maximum amount until
we reach a certain level ofcredit balance

Financing carried out up
within range of the
maximum amount

As of June 30, 2024

1. A method of ﬁnancing in which the amount collected from the credit is the only source of repayment, and the repayment obligation is not borne by Mercari46

6

Business Segments

Financial Results Presentation Material

Japan Region

Marketplace

Fintech

C2C

Payment

Crossborder

CreditB2C

Crypto(Mercari)(Mercari Shops)(Merpay)(Merpay)

US

OthersAdjustments

C2C

Kashima
Antlers

Company-wide
expenses

India Center of
Excellence

Consolidated
adjustments(Mercari [US])(Mercoin)On-demand
work
47

6

Marketplace—Cost Composition (Quarterly)

Financial Results Presentation Material(Billion JPY)

1

2

J GAAP

IFRS

1. In accordance with accounting standards, starting in FY2024.6 Q4, a portion of point-related expenses (attributed to advertising costs) are deducted from revenue ﬁgures and advertising expenses
2. Outsourcing expenses, land rent and depreciation, etc.

48

6

US—Crossborder Transactions From Mercari in Japanto Mercari in the US1Financial Results Presentation Material●

Aiming to activate transactions by increasing available listings of items from Japan that arein high demand in the US (the Entertainment & Hobbies category, etc.)

Marketplace

US

Transaction amount isrecorded as GMV. Just
like transactions within
Japan, the lister pays a
10% selling fee when thetransaction is complete.

Transaction amount isrecorded as GMV. The
buyer pays a service
fee, PPF fee, andshipping costs.

Japan

US

Listing

Purchase

1. Announced on August 1, 2024 (local time)
2. Service fee: Rate depends on category, brand, and other factors; payment fee: 2.9% + 0.50 USD

49

6Kashima Antlers—FY2025.6 Business Objectives
Soccer business:●●

Financial Results Presentation Material●

Strengthen youth teams to enhance the team’s capabilities in the long term
Expand admission fee and advertising revenue streams through initiatives such as free admission forelementary school students
Expand merchandise sales using e-commerce, etc., develop new products, and strengthen management ofphysical stores

Non-soccer business:●●

Hold events to use the stadium effectively
Strengthen soccer school operations@KASHIMA ANTLERS

Soccer school@KASHIMA ANTLERS

Stadium camp50

Basic Information

51

Financial Results Presentation Material

7

ValuesGo
Bold

All for
One

Be
a Pro

In order to create innovation witha big impact on the world,
everyone takes on bold challenges
and learns from many failures.

With the whole team working
together and all members
working to their highest potential,
the team can achieve large
missions that one person alone
cannot.

All members take ownership of
their work as professionals in theirﬁeld, learn every day, and commit
to showing results.

52

Financial Results Presentation Material

7

Services
Marketplace
FintechUS

53

7Marketplace—Mercari (C2C/B2C) Overview●●

Financial Results Presentation Material●

Japan’s largest marketplace app, with an MAU of approx. 23 million users
Enables anyone to list items easily, and buyers to enjoy the feeling of hunting for treasure as they
search for lucky ﬁnds
Provides a safe, secure, and convenient UI/UX with an escrow system and various affordable
shipping options, including anonymous shipping● Service launch: July 2013 (C2C); October 2021
(B2C)

● Operating systems: Android, iOS(Can also be accessed through web browsers)● Usage fees: None
● Revenue structure: After the transaction iscomplete, the seller is charged a service fee of
10% of the listing price54

7Marketplace—Major Events

Financial Results Presentation Material● Mercari launch● First TV commercial● Establishment ofcustomer service ofﬁce● Anonymous
shipping
Began anonymous shippingwith RakuRaku Mercari
Shipping● Crossbordertransactions● Mercari Shops

Launched crossborder transactions,enabling buyers overseas to purchaseitems from Mercari through proxyservices

Launched a B2C service that allows
anyone to easily establish theirown online shop

Aired Mercari’s ﬁrst TV commercial
nationwide, increasing recognitionand expanding the user base

FY2014.6

FY2015.6

FY2016.6● Introduction of sellingfee (10%)● RakuRaku Mercari
Shipping
Became the ﬁrst marketplace app tooffer a shipping service with ﬂat-rateshipping across the country inpartnership with YAMATO
TRANSPORT CO., LTD.

FY2017.6

FY2020.6● RakuRaku Mercari
Shipping forOversized Items (nowTanoMer Shipping)In partnership with YHC, launcheda service enabling users to shiplarge items anonymously without
having to pack the items● YuYu Mercari Shipping
Launched a service with ﬂat-rateshipping across the country inpartnership with JAPAN POST Co.,Ltd.

● Monthly deferredpayment (nowlump-sum payment)

FY2021.6

FY2022.6● Yu-Packet Post
Launched a service enablingusers to anonymously ship
items from mailboxes inpartnership with JAPAN POST
Co., Ltd.

FY2024.6● Eco Mercari
Shipping
Launched a service
with ﬂat-rate shipping
across the country that
reduces the delivery
and environmental
burden by using
drop-off delivery● Mercari Hallo
Launched on-demand
work service Mercari
Hallo

55

Financial Results Presentation Material

7

Marketplace—Mercari’s Strengths

12Overwhelmingly
broad user baseHighly convenient
UI/UX utilizing
technology● Boasts a user base of approx.

● Features a highly convenient

23M people across the country
and of all ages
● Offers a cross-categorymarketplace with a wide
variety of items

UI/UX utilizing technology suchas AI, including listing
simpliﬁcation andrecommendation features tosupport purchases

3
Safe and secureusage environment● Focuses on providing a safe
and secure environment, withfeatures such as escrow
payment1, anonymous
shipping, and passkeys2

1. A system in which Mercari acts as a go-between between the seller and buyer in transactions on Mercari to prevent disputes
2. A password-less biometric authentication feature that enables users not only to use a highly safe authentication method, but also to avoid having to conﬁgure biometric authentication for each device.

56

7

Marketplace—GMV1/MAU2 (Quarterly)

Millionusers

Financial Results Presentation Material

GMV (Billion JPY)
MAU (Million users)

YoY
+2%

Billion
JPY

YoY
+6%

57
1. Aggregate transaction value after adjusting for cancellations. Figures do not include Mercari Hallo.
2. Quarterly average number of users who browsed our service (app or web) at least once during a given month7

Marketplace—Crossborder Transactions
As a result of focusing on crossborder transactions as an area to enhance, increased the number ofpartner companies to 70 (as of June 30, 2024)
Popular categories include categories related to character merchandise, trading cards, and apparel●●

Financial Results Presentation Material

Countries/Regions With theHighest Transaction Amounts1

Top 10 Categories1

1.

China

4.

Hong Kong

1.

Character Merchandise

2.

Taiwan5.

Singapore2.

Trading Cards

3.

US

6.

Korea

3.

Women’s Fashion (Bags)

4.

Figurines & Action Figures5.

Men’s Fashion (Jackets & Outerwear)

6.

Toys

7.

CDs

8.

Cameras9.

Celebrity Merchandise

10.

Video Games

Partner Companies
BEENOS Inc. (Buyee, Shopee)
SIG Service INC. (doorzo)
Leyifan Inc.

2

1. Based on transactions through Mercari’s proxy services such as Buyee between January 1, 2024, and June 30, 2024
2. List of partner companies (available only in Japanese): https://help.jp.mercari.com/guide/articles/1476/

58

7

Marketplace App Market Data

Financial Results Presentation Material●

Mercari’s GMV share continues to grow in the expanding online C2C market

Estimated value of
unneeded items1
2022 online C2C market2
Approx. 2.3 trillion JPY
2021 marketplace app market3
Approx. 1.2 trillion JPY

Annually

Approx.

7.6

trillion JPY

2022 Mercari GMV4
Approx. 932.7 billion
JPY
1. Source: Ministry of Economy, Trade and Industry (April 2017, April 2018). The total market size of sales of secondhand goods in stores, sales of secondhand goods online, auctions, etc.
Excludes automobiles, motorcycles, and motor scooters.
2. Source: “FY2022 E-Commerce Market Survey Report”, Ministry of Economy, Trade and Industry (published August 31, 2023). Includes B2B and B2C transactions in addition to C2C transactions.
3. Source: “FY2021 E-Commerce Market Survey Report”, Ministry of Economy, Trade and Industry (published August 12, 2022). Includes B2B and B2C transactions in addition to C2C transactions.
4. Source: Company materials; C2C and B2C GMV from January 2022 to December 202259

7Marketplace—Overview of Mercari Hallo(On-Demand Work Service)
Background of growing need for on-demand work

Financial Results Presentation Material●●●

Diversiﬁcation of work styles after COVID-19 pandemic
Labor shortages due to shrinking population and aging
society
Demand for additional income sources due to pricehikes

What makes on-demand work unique●●●

Shifts as short as one hour or one day
No résumé or interview needed
Wages are received immediately afterwork is done

Business

Worker(3) Works a shift(5) Pays 30% of wages and travel expenses(Free during current promotion)(2) Applies to job
listing(1) Posts job
listing(4) Pays immediately after work
(wages and travel expenses)

60

7Marketplace—Strengths of Mercari Hallo(On-Demand Work Service)

Financial Results Presentation Material

1

Multi-generationbase of 23 million
users across Japan● Our partners can acquire effective
crew from the ranks ofapproximately 23 million potential
users (16 million veriﬁed) acrossJapan● Through surveys1, we have
conﬁrmed that there is interest in
on-demand work from Mercariusers across a wide range of age
demographics

2

Pay, Buy, Sell,
Work: four actions,
one app● We aim to provide an experience thatallows users to use their wages earned
at Mercari Hallo to make purchases
within and outside of Mercari, andalso allows them to make Merpay
repayments seamlessly● It’s easy to use the service because it
inherits the Identity veriﬁcation
information and banking information
registered on Mercari

3
Safe and secureusage environment● Mercari has built trust as a prime
listed company and with a trackrecord of operating a safe and secure
marketplace for over 10 years

1. A survey of Mercari users (men and women ages 18 to 69) revealed that many users across a wide range of age demographics either had experience with on-demand work or lacked experience with
on-demand work but had a high level of interest (according to Mercari research)61

7

Fintech—Services
AssetManagement

Payment

CreditVarious convenient payment
methods available

Various services that utilize unique credit based on
behavior history such as usage history on MercariiD payment
Hold your phone
over a reader

Mercard(Credit card)

Mercard’s deferredpayment system uses
Smart Payments

Service that allows users to
buy and sell cryptoassets
from within Mercari

Smart Payments
Lump-Sum
Payment

Pay for everyday
purchases all at once
the following month

Fixed-AmountPayment
Pay over several months at aﬁxed amount of your choice;
Interest rate (annual): 15%

Code payment
Scan the code

Smart Money
Borrow when needed and repay ﬂexibly: interest rates ﬂuctuate
depending on the borrower's usage of Mercari;
Interest rate (annual): 3–15%

62

7

Fintech—Major Events

Financial Results Presentation Material● No-contact service
iD Payments/QR Code
Payments● Send/receive● Merpay Smart Money

Enables users to send theirMerpay balance/points tofamily and friends

A small-sum loan service thatutilizes Mercari usage history to
determine a user’s interest rate
and borrowing limit● Merpay Smart
Payments(ﬁxed-amount)● Cryptoasset
trading
service● Bitcoin savings
featureEnables users to buy
and sell bitcoin from
the Mercari app

Allows for ﬁxed-amountpayments, whereby users pay
in installments from thefollowing month onwards

FY2019.6

FY2021.6

FY2022.6● Identity veriﬁcation
using Japan’s
Individual Number
Card (JPKI)● Merpay Smart
Payments(lump-sum)
Allows users to defer payment
for items

FY2023.6

FY2024.6● Mercard
A comprehensive, ﬂexible credit
card that allows users to do
everything right from the Mercari
app and offers up to 4% points
back.

FY2025.6● Bitcoin payments
within Mercari
Enables users to use bitcoin
to pay for items purchased on
Mercari● Ethereum trading
Enables users to buy and sell
ethereum through thecryptoasset trading service

63Financial Results Presentation Material

7

Fintech—Strengths

1

2

3

Collaboration
with Marketplace

Unique credit

High identity
veriﬁcation rate

● Utilizes Mercari’s user base of morethan 23 million users (including
more than 16 million
identity-veriﬁed users)● Leverages sales balance on
Mercari, which has an annual GMV
on the scale of 1 trillion JPY, as a
cash-in source for the Merpay
wallet● Utilizes Mercari usage history
and AI technology to offer
appropriate credit to each user
based on their most recent
Mercari usage● Realizes a high credit collection
rate thanks to the uniquecredit system● Offers a safe and secure usage
environment thanks to a highidentity veriﬁcation rate of over90%
● Enables users who haveveriﬁed their identity to
seamlessly begin using other
Mercari Group services

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7

Fintech—Aims and Features of Mercard
Aims of Mercard

Financial Results Presentation Material

1Strengthen
Fintechproﬁtability

As Mercard is used
more and more both inand outside of Mercari,
the proﬁtability of ourcredit business will
increase.

2

3

The loyalty program
encourages the actionsof paying, buying, andselling within Mercari's
ecosystem.

As Mercard is increasingly
used on Mercari, external
payment processing fees
will be reduced andoverall Group proﬁtability
will increase.

Promote thefurther growth ofMarketplace GMV

Reduceexternal processing
fees withinMarketplace

4

Promotecirculation that
includes primary
distribution

We will promote thecreation of a circular
economy throughcollaborative initiatives
with manufacturers andretailers.

Five Major Features of Mercard
Unique credit system
based on behavior
history on Mercari andMerpayUsers who have alreadyveriﬁed their identity canapply for a card in as little
as a minute using the
Mercari app

Flexible control of
repayment date andtimingNumberless card and asafe and secure design
with all settings
conﬁgured entirely
using the Mercari app

Point-back rate that
increases through theactions of paying,buying, and selling(1-4% point-back rate within Mercari)

65

7Fintech—Credit Volume of Deferred Payment
in the EC Market1●●

The amount of deferred payments in the EC market is growing
A high rate of market growth is forecast for the future

Approx.

2 trillion JPY

1,260
billion JPY

440
billion JPY

Outlook

Forecast

Forecast

Forecast

66
1. Source: E-commerce Payment Services (Payment Gateway) Market in Japan: Key Research Findings 2024. Survey by Yano Research Institute(note: based on the transaction amount of deferred payment service providers)

7

US—Mercari (US) Overview●

Financial Results Presentation Material●●

Launched the year after Mercari’s founding as our ﬁrst step in aiming to create value in a global
marketplace
Holds a unique position in the US market as a cross-category service with a variety of delivery options
In order to activate transactions, became the ﬁrst major marketplace in the US with no selling fees after
shifting to a model in which the buyer pays fees

● Service launch: September 2014
● Operating systems: Android, iOS(Can also be accessed through web browsers)● Usage fees: None
● Revenue structure: After the transaction iscomplete, the buyer is charged a service fee(rate depends on category, brand, and otherfactors) and PPF fee (2.9% + 0.50 USD)

67

7

US—Major Events● Service launch● Localization ofmanagement
structure

Financial Results Presentation MaterialJohn Lagerling, current
CEO of Mercari, Inc. (US),joined Mercari GroupFY2014.6

FY2016.6

FY2017.6● Diversiﬁcation ofshipping methods● Enhancementof AI usage

Launched Mercari Local, a contactlesssame-day pickup and delivery service,nationwide in partnership with Uber

Launched Merchat AI,
a new shopping
assistant powered by
ChatGPT

FY2018.6

FY2021.6

FY2023.6● Launch ofdeferred payment
service● Rebranding● Introductionof fees

Carried out rebranding and an
app redesign as a step toward
localization

Launched deferred payment(BNPL) service with Zip (laterlaunched BNPL service with
PayPal in 2022)

FY2024.6● Launch ofcrossbordertransactions with
Mercari in Japan

FY2025.6● Change of fee model● Rebranded to a design
aimed at Gen Z

Launched a model inwhich sellers pay 10% oftransaction amounts as aselling fee

68Financial Results Presentation Material

7

US—Strengths

1

2

3

Cross-category
C2C marketplace

Wide range ofdelivery options

No selling fees1● Offers a cross-category C2C
marketplace with large
potential for mid- to long-term
growth in the US market,
which mainly consists of
category-speciﬁc services● Offers a variety of delivery
options including bothshipping and local pickup,
while many services in the US
market only offer one or theother● Uses a fee model with minimalburden on sellers as the only
major marketplace in the US tocharge no selling fees
● Offers a UX that makes listing
incredibly easy

1. In March 2024, removed selling fees and changed to a model where the buyer pays fees

69

Financial Results Presentation Material

7

US—GMV1/MAU2 (Quarterly)

Millionusers

GMV (Million USD)
MAU (Million users)

YoY
+1%

Million
USD

YoY
-9%

1. Aggregate transaction value after adjusting for cancellations
2. Quarterly average number of users who browsed our service (app or web) at least once during a given month70

US—US Reuse Market

7●

The US online reuse market is expected to grow at a pace approximately triple that of the ofﬂine market
between 2022 and 2031 and overtake the ofﬂine market in size in 2026

2030 Forecast$180 billion

Financial Results Presentation Material

US Reuse Market
Online market
Ofﬂine market(Billion USD)

2022
$74 billion

71
1. Source: Mercari 2023 Reuse Report. The numbers from 2023 and onwards are estimates.

7

US—Market Positioning●

Financial Results Presentation Material●

Aiming to be "the easiest and safest selling app" by providing a variety of delivery options in addition tocontinuing to pursue ease of use toward establishing a unique position in the US market
Strengthening regular delivery and expanding transaction methods to enhance user convenience,
including meet-up options

Cross-category

Enhanced local
shipping, including
meet-up options

Existing shipping
options

Local pickup
only

Ship only

Category-speciﬁc
72

Disclaimer
This material has been prepared based on information gathered at the time of its
preparation and is not in any way intended as a commitment to future implementation.
Also note that information contained herein has not been audited or reviewed by anindependent certiﬁed public accountant or audit corporation, and includes ﬁnancial
information based on past ﬁnancial statements or accounting documents as well as
management ﬁgures not based on ﬁnancial statements or accounting documents.
This document is an English translation of the original Japanese language document andhas been prepared solely for reference purposes. No warranties or assurances are given
regarding the accuracy or completeness of this English translation. In the event of any
discrepancy between this English translation and the original Japanese language
document, the original Japanese language document shall prevail in all respects.

The FY2025.6 Q1 ﬁnancial results are scheduled to be released at 15:00 or later on
November 5, 2024.

73