FY2022.6 Q4

Table of Contents

1

FY2022.6 Summary—Highlights

2

Mid- to Long-Term Policy

3

FY2022.6 Financial Overview/Results

4

FY2023.6 Business Objectives

5

Appendix2

1

FY2022.6 Summary—Highlights
Objectives set out at the beginning of FY2022.6● Continue to grow and reinforce the three pillars of our business while promoting new areas for us to pioneer, including
global expansion, and create further opportunities for the Group to grow.

● Through business activities that have a positive impact on the environment and the world, use the planet's limited
resources carefully and aim to build a world where anyone can create value. In particular, focus on climate change
mitigation and D&I as priority areas.

Steady growth of
three pillars1

Sowing seeds for midto long-term growth

Building a global
standard organization● Steadily expanded Mercari
JP and US user bases● Established Merpay’s proﬁt
base● Launched Japan Region● Launched Mercari Shops● Completed registration as a
cryptocurrency exchange2● Uplisted to the TSE Prime Market3● Strengthened ESG (page 35)● Actively hired talent who will enhance
growth● Established India Center of Excellence4 tocontinuously strengthen technology base

1. Refers to Mercari JP, Merpay, and Mercari US
2. Registered by Mercoin, Inc. on June 17, 2022
3. Changed listing on the Tokyo Stock Exchange from the Growth Market to the Prime Market
4. Mercari Software Technologies India Private Limited (established June 23, 2022)

3

Mid- to Long-Term
Policy4

2Mission●Create value in a global marketplace where anyone can buy and sell52Planet Positive1
We aim to build an ecosystem that seamlessly circulates all forms of value and become essential to thecreation of a circular economy, and then go one step further to realize a planet-positive world where we sharethe earth’s limited resources across generations so all people can continue to create new value.

1. “Planet positive” is based on the concept of “planetary boundaries” (the earth’s limited resources). Mercari adopted this term to express our stance of being a company
that has a positive impact on the environment through the growth of our business.

6

2

Mercari’s Positive Impact●

In clothing alone, approximately 480K tons of CO2 emissions were avoided by transactions on Mercari1CO2 emissions avoided, assuming items were bought on Mercari
instead of buying new products (for clothing only)

480K tons
400K tons

480K tons

100K

80K

380K

400K

200

coveredbaseballstadiums

50K

Approx.

350K

Approx.

1.4M

over

3 years

tons

CO2 equivalent to approx. 200
covered baseball stadiums2

1. CO2 emissions avoided on the assumption that items bought and sold under the categories in question are used in place of new items, calculated by applying an adjustment factor and with consideration
for the item lifecycle (item production, distribution, use, and disposal). (CO2 that can be avoided = (CO2 emissions when new items are used to an equivalent level of that of secondhand items) - (CO2emissions from use of secondhand items)). Per-unit CO2 emissions for clothing taken from the Ministry of the Environment’s data. (Source: Ministry of the Environment “Results of Survey on Fashion & theEnvironment.”) Also used the Ministry of the Environment’s data for estimates found in the results of our analysis of CO2 emissions for Mercari US.
2. CO2 equivalent to one covered baseball stadium: 2,436 t-CO2 (covered baseball stadium volume: 1.24M KL; 1 mol = 22.4 L = 44 g-CO2; Source: Tokyo Dome)

7

Medium-Term Milestones to Achieve Our Mission
Working with external partners to createa circular economy ecosystem
Create a world that uses technology to seamlessly
circulate all forms of value, not just physical things, andpromote collaboration with various external
partners necessary to do so
C2C

Security

Global expansion
Proceed with expansion into other countries
while prioritizing further development of the US
business, and further promote D&I andwell-being to create a borderless organization
where talent all over the world can thrive

Payment>>>
B2C

CreditMarketplace

US

Fintech

Logistics

NFT

>>>

2

Blockchain

AI
City

Crypto8

2Income Pillars to Follow Mercari JP●

Building on the success of Mercari JP, we will raise the proﬁtability of Marketplace, Fintech, and US
in the midterm to reinforce the Group’s proﬁt base going forward.

Marketplace

FintechUS

9

2Medium-TermTargets& Investment
Plans
Long
term Growth
Imageof Mercari
Group
Business Area

Main
Businesses

Group

Medium-Term Objectives

Future Major
Investment Areas■ Work with external partners to realize an
ecosystem that leads the move to a circular
economy■ Create a borderless organization where talent
all over the world can thrive■ Promote further global expansion● Strengthening AI and data infrastructure● Strengthening safety and security of theservice for users● Maintaining information security● Promoting D&I and well-being● Building global business■ Become a leader in the circular economy

Marketplace

Fintech

US

C2C
B2C
Payment/
CreditCrypto/NFT

C2C● Lead the market as an essential service to thecreation of a circular economy, and accelerate
this by collaborating with external partners● Expecting three-year GMV CAGR of 15% and an
adjusted operating margin over 40%1

● Using AI to enhance matching
accuracy● Creating an optimal UX including
C2C, B2C, ﬁntech, and ofﬂine
experiences■ Promote a “circular ﬁnancial ecosystem”2
as a step towards building a new ﬁnancial
culture with ﬁnancial services utilizing thegroup’s synergies● Creating a UX that leads users back to themarketplace● Strengthening credit (AI credit, etc.)● Expanding the experience to include
cryptoassets and NFTs utilizing
blockchain technology■ Establish name recognition and thereputation as "the easiest and safest
selling app" in the US● Expanding the user base● Simplifying listing and enhancing
personalization● Using AI to enhance matching accuracy● Expanding shipping options

1. GMV refers to the combined GMV of C2C and B2C; adjusted operating margin refers to that of Marketplace excluding company-wide expenses, but including Souzoh (B2C) and Merlogi expenses
2. A term referring to utilizing/circulating not only goods and money, but diverse forms of credit, no longer limited to personal information used in conventional systems

10

2

Mercari's Growth Trajectory and Further Leaps Forward▶ 20XX

Complete the mission

Create value in a global marketplace whereanyone can buy & sell

Global Expansion

Four years
after IPO1:▶ FY2022.6–

Global expansion andnew businesses

4x
MAU : approx. 2xUS▶ FY2022.6

Sales: approx.

Mercari Shops launched

2

Now
▼

Fintech▶ FY2019.6

Merpay launchedMarketplace▶ FY2017.6

Mercari UK launched (Closed)▶ FY2015.6

Mercari US launched▶ FY2014.6

Mercari JP launched1. Comparison of consolidated net sales and MAU (JP and US combined) between FY2018.6 Q4 and FY2022.6 Q4
2. Quarterly average number of users who browsed our service (app or web) at least once during a given monthNote: This diagram of future growth is for illustrative purposes only

11

FY2022.6
Financial Overview/
Results

12

3

FY2022.6 Summary—Highlights
Consolidated● While there was steady growth in our three pillars of business, such as establishing a proﬁt base for Merpay, the growth rate of
GMV for both Mercari JP and US slowed down as a result of factors including changes in the external environment, impact offraudulent use, and updates to the investment policy to give top priority to growth in the mid-to-long term. However, we wereable to achieve an operating proﬁt in Q4 by clarifying priorities and making carefully selected investments, as well as reducing
costs.
● Overall, we sowed seeds for mid- to long-term growth and created new opportunities for growth.

Mercari JP

MerpayMercari US● MAU exceeded 20 million, establishing
Mercari as a service with an overwhelminguser base in the C2C marketplace● In addition to marketing initiatives, we
strengthened UI/UX through productimprovements for mid- to long-term growth,such as personalization, strengthening web,etc.

● Both the payment and credit businesses grewsteadily, achieving continuous top-line growthand strengthening the proﬁt base● Thanks to the growth of ﬁxed-amountpayment, an area of special focus, establisheda proﬁt base and achieved full-year unadjusted
operating proﬁt1 for the ﬁrst time

● MAU grew due to successful marketing
efforts to increase brand awareness; full-year
GMV growth rate was -2% YoY due to highhurdles for FY2022.6 and changes in theexternal environment, such as inﬂation● Also steadily promoted ease-of-use featuresand personalization

SouzohMercoinKashima Antlers● Fully rolled out Mercari Shops in Oct● The number of shops opened surpassed
200,0002 as a result of steady progresssince Q3 and marketing to acquire new
shops while focusing on productimprovement● Made steady progress in hiring specialized
talent, solidifying our organizationalfoundation● Also made progress toward the full-scalelaunch of services, by releasing "Paciﬁc
League Exciting Moments β" and completing
registration as a cryptocurrency exchange● Under the management vision “Vision KA41,”
we formulated a management plan that does
not rely solely on the soccer business● Implemented various initiatives to lay thefoundation for further growth, with the goal of
returning the soccer business to pre-COVID
levels1. Adjusted: Figures after adjustment exclude internal transactions between Mercari JP and Merpay (outsourced payment processing fees)
Unadjusted: Figures before adjustment include internal transactions between Mercari JP and Merpay (outsourced payment processing fees)
2. As of April 19, 2022.

13

3

FY2022.6—Full-Year KPI Summary

Net
Sales

147.0
(YoY +39%)

Excluding the impact ofchanges to accounting
policies on sales

124.8

Consolidated
billion JPY

Operating
Income‐3.7

billion JPY(YoY -8.9 billion JPY)

billion JPY(YoY +18%)

Mercari JP

MerpayMercari US

GMV1

Number of Users2

GMV1

YoY +12%Adjusted Operating Margin
27% (YoY -6ppts)

13.45 million

Identity Veriﬁcation Rate

86.2%

YoY -2%MAU3
4.9 million (YoY +6%)

1. Aggregated transaction value after adjusting for cancellations (the GMV of Mercari JP does not include the GMV of Mercari Shops)
2. Aggregated number of unique users who had registered for Merpay Electronic Money or used QR Code Payments, Online Payments, or Merpay Smart Payments(lump-sum payment or ﬁxed-amount payment), etc. as of the end of June 2022
3. Quarterly average number of users who browsed our service (app or web) at least once during a given month14

3

Financial Highlights—Consolidated Net Sales & Operating Income●

Achieved operating proﬁt in Q4 thanks to our updated investment policy and making carefully
selected investments.

Net Sales

Operating Income
38.5
37.5
37.3

(Billion JPY)

33.6

(Billion
JPY)

YoY

+28%

(Billion JPY)

(Billion JPY)
(Excluding theimpactof the change inaccounting
policies)

YoY

+8%

15

3

Talent Supporting Mercari’s Growth●●

As a result of the easing of COVID-19 border control measures in Japan, employee numbers
exceeded the forecasts we made in Q3, as newly recruited talent residing overseas arrived in Japanto start working sooner than expected.
We will continue to focus on hiring mostly for engineering positions in FY2023.6, but the increase inheadcount will likely be moderate overall.

Number of Employees

16Impact of Fraudulent Use—Decrease Expected From FY2023.6 Onward

3●●

Thanks to the countermeasures we have put in place, we expect the impact of fraudulent use to start
decreasing in FY2023.6.
Creating a safe and secure usage environment is our top priority, and the entire company has been
continuing to work together to achieve this goal.

Q4 Impact

Countermeasures
EMV-3D Secure

Mercari JP: Fraudulent use ofcredit cards●
Q4: 1.3 billion JPY●

Establishment of a dedicatedanti-fraud department●

Merpay: Phishing●Q4: 0.3 billion JPY(However, 0.5 billion JPY was covered byinsurance for fraudulent use of Merpay thisﬁscal year; creating a 0.2 billion JPY surplus
in operating income)

Implemented on the Android
version, in addition to iOS

Able to respond quickly andcomprehensively to new fraud
incidents

Industry-wide initiatives●●

Shared our experience in
implementing EMV-3D Secure withother companies in the industry1
Held brainstorming sessions on
methods to prevent phishing acrossthe industry2

1. Japan Online Marketplaces Consortium and E-Commerce Business Council
2. Payments Japan Association

FY2023.6 Forecast●

Thanks to theimplementation of
EMV-3D Secure andother appropriate
countermeasures,
expenses are expected
to decrease starting inthe ﬁrst half of FY2023.6
and return to normal
levels in the second half17

3

Mercari JP—A Look Back at GMV/MAU in FY2022.6 Q4●

Due to a decrease in the time users spent at home, the impact of countermeasures against fraudulent
use, and an update to our investment policy, the GMV growth rate slowed temporarily. However, we areaiming not for short-term growth, but rather mid- to long-term growth by investments that
accumulate steady results.
MAU remained at 20 million users, despite Q4 traditionally being a slow season and amidst theimplementing of disciplined investment.
YoY

●

1

GMV/MAU(Million users) +4%(Billion JPY)

YoY
+5%

(Billion JPY)
(Million users)

1. Quarterly average number of users who browsed our service (app or web) at least once during a given month18

3

Mercari JP—FY2022.6 Q4
Net Sales1

Adjusted Operating Income/Margin2/3
YoY
+7%

YoY
-3ppts(Billion
JPY)(Billion JPY)
(Billion JPY)

(Billion
JPY)

YoY
-4%

1–2. From FY2022.6 Q1, to compare business results (YoY) exclusively for C2C transactions, the net sales shown here represent only the C2C results
3. Graph reﬂects retroactive adjustment made from FY2019.6 Q3 to the amount before recording internal transactions between Mercari and Merpay as a result of transferring settlement to Merpay(outsourced payment processing fees)19

3

Mercari JP—FY2022.6 Summary●●●

Worked on acquiring new users, strengthening listings, and retention through investments thatsteadily accumulate results. As a result, MAU grew to over 20 million.
The decrease in time spent at home, impact of countermeasures against fraudulent use, andprioritization of investments made for mid- to long-term growth rather than short-term growth
resulted in headwinds for short-term GMV growth.
As a result, achieved YoY GMV growth of +12% and an adjusted operating margin of 27%, numbers
mostly in line with the forecasts announced in Q3.

Product Initiatives● User activation through personalized home screen● Strengthening Mercari Web as second gateway to Mercari(Web ratio to total GMV increased by 3 ppts YoY to 10%1)

▶ GMV

881.6

billion JPY

12%)(YoY +
Marketing Initiatives● Acquired new users through invitation campaigns● Improved retention by promoting cross-use2 to new users● Developed a new user base through Mercari Workshop▶ Adjusted Operating Margin

27%(Number of Mercari Workshop participants as of June 2022: 180,00 (YoY +130,000))

1. As of June 30, 2022.
2. Initiatives encouraging users to use Merpay payment in addition to buying and listing items on Mercari.

20

3

Mercari JP—FY2022.6 Summary(Billion JPY)
(Million users)

Adjusted Operating
Income/Margin2/3

Net Sales1

GMV/MAU(Million YoY
users) +4%

YoY(Billion+12%
JPY)(Billion JPY)
(Billion JPY)

YoY
+13%
(Billion
JPY)(Billion JPY)

YoY
-6pptsYoY-7%(BillionJPY)

1–2. From FY2022.6 Q1, to compare business results (YoY) exclusively for C2C transactions, the net sales shown here represent only the C2C results
3. Graph reﬂects retroactive adjustment made from FY2019.6 Q3 to the amount before recording internal transactions between Mercari and Merpay as a result of transferring settlement to Merpay(outsourced payment processing fees)21

3

Mercari JP—Full-Year Cost Structure Against Net Sales●

Made aggressive investment in H1, but shifted to strictly disciplined investment, especially in Q4.
As a result, adjusted operating margin for the full year was 27%, but proﬁtability is improving.

1

1. Outsourcing expenses, rent, and taxes & dues22

3

Mercari JP—Cost Structure Against Net Sales in Q4●●

Achieved an adjusted operating margin of 30% due to a signiﬁcant decrease in the
promotion ratio, driven by disciplined investment in line with updated priorities.
Due to the impact of fraudulent use, commission fees increased by 6% (1.2 billion
JPY) and promotion costs by 0.5% (0.1 billion JPY).
1

Impact of fraudulent use
on promotion

0.5%

Impact of fraudulent use
on commission fees6%

1. Outsourcing expenses, rent, taxes & dues, hiring fees23

3Souzoh—FY2022.6 Summary●●

Launched the full rollout of B2C marketplace Mercari Shops in October 2021 and conducted
aggressive marketing initiatives to achieve a successful launch.
In the second half of the year, focused on product updates and carried out disciplined marketing
initiatives to acquire new shops. As a result, Mercari Shops has been progressing well, and thenumber of shops has surpassed 200,000.

Marketing Initiatives● Ran a TV commercial targeting businesses toincrease awareness of Mercari Shops● Carried out no-selling-fees campaigns and buyer
point-back campaigns to acquire new shops▶ Over200K shops▶ Percentage of ﬁrst-time
online store openings

1

55%
2

Product Initiatives● Focused on functional improvements in orderto create a selling experience for businesses(Feature examples: inventory registration, custom color andsize registration, staff accounts, social media integration)

1. As of April 19, 2022.
2. Based on the results of a survey for Mercari Shops owners conducted in July 2022.

24

3Souzoh—FY2022.6 Summary●

Took on initiatives to solve social issues that arose as a result of COVID-19.

Enhanced the Food Category

Cooperation with Local Governments

Due to COVID-19, wholesale volume of restaurants andretailers decreased, and sales have declined because ofcancellation of product exhibitions nationwide

There is an increased need to expand EC sales
channels for local specialty products, etc.,
to revitalize local economies● Enabled sales of perishable food items such as seafood, and supported
sales of these items through improvements to shipping options such
as Refrigerated Mercari Shipping and campaigns● The number of transactions in the food category is the largest,indicating that we have matched demand as expected● Collaborated with some local communities on a regional
revitalization program aimed at promoting the region andencouraged local businesses to make their own shops on
Mercari Shops● Contributed to the revitalization of local economies asapproximately 60% of shipped items are from outside of major
cities1

1. Survey period: August 1, 2021–August 31, 2021. Deﬁnition of urban areas: Tokyo and surrounding areas (Tokyo, Kanagawa, Chiba, and Saitama), Aichi, and Osaka25

3

Merpay—FY2022.6 Summary●●

Achieved both top-line and proﬁt base growth through the strengthening of the payment andcredit businesses.
In particular, Smart Payments (ﬁxed-amount payment) grew steadily, and we achieved
full-year unadjusted operating proﬁt for the ﬁrst time.

Establishment of proﬁt base● As expected, Merpay Smart Payments (ﬁxed-amountpayment) grew, and proﬁtability improved as a result● Established a proﬁt base that can bring a regular
unadjusted1 operating proﬁt with the services wecurrently offer● Carried out rigid credit control leveraging our unique AI
credit system

Establishment of safe & secure environment▶ First full-year operating

proﬁt (unadjusted1)▶ Identity veriﬁcation ratio

86.2%● The percentage of users who have completed identity veriﬁcation
exceeded 86% due to ongoing promotion, helping us construct anenvironment that is convenient, safe, and secure

1. Figures before adjustment include internal transactions between Mercari JP and Merpay (outsourced payment processing fees)26

Merpay—Net Sales and Adjusted/Unadjusted Operating Income

3●

Achieved satisfactory growth in both total net sales and net sales excluding internaltransactions, and achieved a full-year unadjusted operating proﬁt for the ﬁrst time.

Adjusted/Unadjusted
Operating Income3

Net Sales1
YoY+39.9%

Achieved proﬁtability forthe ﬁrst time
Unadjusted
Operating
IncomeTotal
Net Sales1

Adjusted
Operating Income(Billion JPY)

YoY
+65.0%Net Sales
ExcludingInternal
Transactions2

1. Numbers for Q3 and Q4 of FY2020.6 exclude temporary sales from Origami.
2. Net sales and operating income after deduction of internal transactions between Mercari JP and Merpay (outsourced payment processing fees)
3. Adjusted: Figures after adjustment exclude internal transactions between Mercari JP and Merpay (outsourced payment processing fees)
Unadjusted: Figures before adjustment include internal transactions between Mercari JP and Merpay (outsourced payment processing fees)(Billion JPY)27

3

Merpay—Net Sales and Adjusted/Unadjusted Operating Income●

In addition to the credit business growing steadily, our carefully selected investments supported
the increase in unadjusted operating income in Q4.

Adjusted/Unadjusted
Operating Income3

Net Sales1(Billion JPY)

Unadjusted
Operating
IncomeAdjusted
Operating Income

Total
Net Sales1

Net Sales
ExcludingInternal
Transactions2(Billion JPY)

1. Numbers for Q3 and Q4 of FY2020.6 exclude temporary sales from Origami.
2. Net sales and operating income after deduction of internal transactions between Mercari JP and Merpay (outsourced payment processing fees)
3. Adjusted: Figures after adjustment exclude internal transactions between Mercari JP and Merpay (outsourced payment processing fees)
Unadjusted: Figures before adjustment include internal transactions between Mercari JP and Merpay (outsourced payment processing fees)28

3

Merpay—Progress in the Credit Business●●

The percentage of users who have veriﬁed their identity has steadily increased to 86.2% thanks tocontinuous efforts to build a safe and secure usage environment.
The number of veriﬁed users contributes to the growth of the credit business.

Merpay Users
Identity-Veriﬁed Users(Million users)

Identity
Veriﬁcation Rate

86.2%

29

3

Mercoin—FY2022.6 Summary●●

We built a highly specialized organization with talent experienced and knowledgeable in the ﬁelds ofcryptoassets and NFTs.
FY2022.6 was the year of preparations for the planned service launch in FY2023.6.
○
Began sales of digital contents, looking ahead to the utilization of blockchain technologies in the near
future.
○Registered as a cryptocurrency exchange to provide highly convenient services utilizing cryptoassets.

Building theorganizational foundation

Preparations for the full-scalelaunch of the service● The hiring of professionals specialized in
the ﬁelds of cryptoassets and NFTs
progressed steadily, bringing theorganization size to just under 100 people1● Made solid progress in hiring for key
positions and building a strongorganization for the full-scale launchof the service● Launched the digital contents Paciﬁc League
Exciting Moments β, looking ahead to the
future popularization of NFTs; while there is stillroom for UI/UX improvement, the rare content
sold out immediately, indicating a good
response● Completed the registration process to obtainthe cryptocurrency exchange license, which isindispensable for providing services

1. The number of employees mainly involved in the Mercoin business (as of July 1, 2022).

30

3

Mercari US—FY2022.6 Q4 GMV/MAU●●

MAU declined QoQ mainly due to the seasonal slowdown, but continued to grow YoY thanks tothe steady accumulation of new users.
YoY GMV growth was -12% due to high hurdles from Q4 of the previous year, as well as external
factors centered on inﬂation, and a revised investment policy.

GMV/MAU1

YoY+6%(Million users)(Million USD)(Million users)

YoY

-12%

(Million USD)

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

31

3

Mercari US—Net Sales/Adjusted Operating Income (US GAAP/Quarterly)●

Adjusted operating income improved QoQ due to the low season in Q4 and updates to ourinvestment policy to make carefully selected investments for mid- to long-term growth as a
top priority.

Adjusted Operating Income1

Net Sales(Million USD)(Million USD)

YoY
-12%

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

32

3

Mercari US—FY2022.6 Summary●●Thanks to effective marketing efforts, MAU grew and brand awareness steadily increased to record-high levels.
As a result of product initiatives such as personalization and hassle-free selling, the number of listings has
increased YoY. However, GMV growth was negative due to factors such as the high hurdle from the signiﬁcant
growth seen in FY2021.6 (YoY +72%), prioritizing investments for the long term throughout H2, and inﬂation
causing buying to slow down.

Marketing● Promoted mid- to long-term brand building throughinitiatives such as commercial collaborations with top ﬁlm
animation entertainment companies that have high brandrecognition and credibility▶ GMV $1.14 billion (YoY -2%)

Product▶ MAU 4.9 million (YoY +6%)

● Released Omakase, a new feature that automaticallyenters listing and item information from just a picture● Improved user personalization accuracy, including
search and item recommendation of similar products
33

3

Mercari US—Net Sales/Adjusted Operating Income (US GAAP/Yearly)(Million USD)(Million users)

Adjusted Operating Income1

Net Sales

GMV/MAU
YoY+6%(Million USD)(Million USD)

YoY
-2%

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

YoY
+3%

34

3

ESG—FY2022.6 Summary●

Through business activities that have a positive impact on the environment and society, we aim to use
the planet's limited resources carefully and build a world where anyone can create value.
We executed various action plans focused on issues such as mitigating climate change and D&I.1

Mitigating
ClimateChangeD&I

Corporate
Governance● As a step toward reaching our mid-term decarbonization targets, achieved scopes 1
and 2 (reduce emissions by 75%), which was our target for this ﬁscal year, by using
renewable energy for 100% of our ofﬁce electricity● Developed Mercari Eco Box, a box for temporarily storing items that are no longer
used but whose useful life is not over, and resumed offering the reusable packing
material Mercari Eco Pack
● Introduced new work style policy called “Mercari’s New Normal Work Style ‘Your
Choice’”● Started the Mercari Restart Program, aimed at helping people return to theworkforce after pausing their careers to focus on such things as childcare or
nursing care
● Updated the Merci Box beneﬁts system (introduced ﬁnancial support for egg
freezing and ﬁnancial support for childcare for children less than 1 year of age)
● Established an ESG committee to advise the company’s Senior Executive
Committee, which carries out management discussions and decision-making for
Mercari Group. Involved company ofﬁcers in business-related management
decisions from an ESG perspective. This enables Mercari to balance its businesses
and ESG initiatives with respect to the company’s materiality, in an effort to ensurea structure that allows Mercari to swiftly implement and promote these initiatives.

1. For details, see our FY2022 Sustainability Report

Mercari Eco Pack

A reusable packing material
that can also be returned

35

FY2023.6
Business Objectives

36

4

Change in Business Segments to Be Disclosed●●

We aim to promote synergy and efﬁciency by grouping individual companies in Japan Region into
Marketplace and Fintech to strengthen business collaboration.
Going forward, we will use the Marketplace and Fintech domains to explain and disclose businessresults in future ﬁnancial results presentations1.

Japan Region

Marketplace

FintechUS

OthersElimination/
Corporate2

Mercari JP

MerpayMercari US

Kashima Antlers

Company-wide
expenses

SouzohMercoinIndia Center of
Excellence

Consolidated
adjustments

Merlogi
1. Will be organized into Japan Region, US, and Other segments for the consolidated ﬁnancial results and securities reports
2. Company-wide expenses, which were previously included in Mercari JP, will be displayed as a separate item from FY2023.6

37

4

FY2023.6 Business Objectives
Consolidated● Build a lean, global business foundation and implement management that balances growth andproﬁtability.
● Achieve further growth through synergy created by strengthening collaboration between C2C and B2C,
as well as between Marketplace and Fintech.

Marketplace

Fintech● Promote sustainable growth by increasing the numberof listings through strengthened collaboration between
C2C and B2C● Expecting full-year GMV YoY growth of +10–15% andadjusted operating margin of 30–35%1, while balancing
growth and proﬁtability (In FY2022.6, Marketplace GMV was 893.3● Provide new ﬁnancial services that utilize groupsynergy to enhance convenience and promote use of
the service● Leverage blockchain technology

US

Others (Kashima Antlers/India Center of Excellence)● Focus on functional improvements, such as continued
simpliﬁcation of listings and personalization, for mid- tolong-term growth● Expecting +0–10% growth in GMV YoY, while assessing
the impact of the uncertain external environment● Aim to strengthen the proﬁtability of the soccer
business, lay the foundation for further growth, andexpand the non-soccer business● Plan to hire around 50–60 software engineers to workat the India Center of Excellencebillion JPY, net sales were 85.7 billion JPY, and adjusted operating income was
26.3 billion JPY. Adjusted operating margin was 31%.)

1. These numbers are pre-audit and are subject to change in the future.

38

Japan Region—FY2023.6: Strengthening the Mercari Ecosystem

4●●

Bring Marketplace (C2C/B2C) and Fintech together to promote efﬁcient and effective productUI/UX improvements and marketing.
Create an ecosystem that circulates credit, NFTs, cryptoassets, and all forms of value, not justphysical things and money.
Marketplace

Mercari

MAU: 20 million

Leverage Mercari’s 20 million MAU
Increase and diversify listings

Mercari Shops
Shops: over 200,000

Increase Merpay balanceContribute to GMV with
with sales balance andincreased payment
increase data that can beopportunities andused for credit
unique credit

MerpayVeriﬁed users:
over 11.5 million

Leverage Merpay’s 11.5 million veriﬁed users
Increase Merpay balance through asset management

Mercoin

Cryptocurrency
exchange license

Fintech39

4Marketplace—FY2023.6 Business Objectives
Medium-Term Objective
Lead the market as an essential service to the creation of a circular economy,
and accelerate collaboration with external partners

Personalization

FY2023.6 Business Objectives

Aim to achieve full-year GMV YoY growth of +10–15% and adjusted operating marginof 30–35% by increasing the number of listings through strengthened
collaboration between the C2C and B2C business areas

GrowthIncrease MAU
by acquiring
new users
1. ARPU: Average Revenue Per User

Proﬁtability/Investment Policy
Increase
ARPU1 byactivating ourexisting users

Disciplined
investment
with priorities

Investments that
accumulate
long-term
results40

4Marketplace (B2C)—FY2023.6 Business Objectives
Create an easy-to-sellexperience
Continue to provide easy-to-use online
store management with Mercari UX, andstrengthen the connection between C2C andB2C to give shops the experience of selling
their products.

C2C

20 million
MAU

Utilize Mercari's
20 million MAU

Product/marketing initiatives
Add features and conduct campaigns that allow
shops owners to increase their own fans (repeat
buyers), and aim to build a product infrastructurethat supports the expansion of monthly sales.

B2C

200,000 shops
Increase anddiversify listings

Feature example:“Repeat buyer” label and purchase frequency display feature

41

4

Fintech—FY2023.6 Business Objectives
Medium-Term Objective
Promote a “circular ﬁnancial ecosystem” as a step towards building a new ﬁnancial culture
with ﬁnancial services utilizing the group’s synergies

FY2023.6 Business Objectives
Promote circular ﬁnance by strengthening group synergy● Provide ﬁnancial services that leverage group synergy● Increase opportunities for using Merpay through synergy between paying,buying, and selling● Further strengthen the proﬁt base by expanding the credit business

Payment/
Credit1

Crypto/NFT● Provide highly convenient services unique to Mercari that utilize
cryptoassets● Develop and provide services that leverage blockchain technologies

1. Refers to the cryptoasset and NFT businesses of Mercoin, Inc.

42

4

Fintech (Payment/Credit)—FY2023.6 Business Objectives
Strengthen synergy
between paying, buying,and selling
Implement new measures to promote using Merpay
when buying things to sell on Mercari, selling on
Mercari things bought using Merpay, and using
Merpay when buying on Mercari. As a ﬁrst step, we
aim to increase the use of Merpay within Mercari.

Expand credit business
Enhance the quality of our proprietary AI credit byutilizing data that will be increased by promoting
the use of Merpay within Mercari. This will build
credit for more people and promote circular ﬁnance.
.
Aiming to achieve
their dreams

PAY

MerpaySmart Money

Shipping

Goods

BUY

Fixed-amountpayment

SELL

Transaction
History
CreditInformation

Money

Payment

Credit

Sales

43

4

US—FY2023.6 Business Objectives
Medium-Term Objective
Establish name recognition and reputation as “the easiest and safest selling app” in the US

FY2023.6 Business Objectives
Focus on product initiatives to promote selling and buying
Expecting YoY GMV growth of +0–10%
Promote Selling

Promote Buying

Product● Add new categories to Omakase, a featurethat automatically inputs basic informationof an item from just a picture● Improve accuracy of personalization● Expand BNPL to create purchase
opportunities

Marketing● Carry out effective, medium- to long-term
promotions to acquire casual sellers● Introduce incentive programs toencourage repeat purchases

Shipping● Explore new categories by strengthening
local delivery● Add bundling options to reduce shipping
cost for buyers
44

4

US—Exploring New Category: Large Furniture●●●

Added large furniture to Mercari Local's category offerings starting June 16, in partnership with
Dolly1, an on-demand logistics company with expertise in handling large items2.
Aim to simplify transactions of large furniture, a category that has not been widely transacted
on online C2C marketplaces due to difﬁculty of shipping, despite high value.
According to our research, the total addressable market for used large furniture is expected toreach approximately $16 billion in 20253, and penetrating this market is expected to contributeto GMV in the future.

1. A service based in Seattle (US) that offers an app where users can order short-distance transportation of large items, currently operating in 45 cities across the US
2. Launched a pre-release stage with service availability limited to ﬁve states
3. Source: Research Nester Pvt. Ltd. “Global Off-the-Shelf Second Hand Furniture Market Outlook 2025”

45

4

Other Businesses—FY2023.6 Business Objectives

Kashima Antlers

Soccer business:● Strengthen admission fee and advertising revenue streams
in light of improvements in the business environment, suchas the easing of capacity restrictions● Expand merchandise sales using EC, etc.
Non-soccer business:● Use the stadium effectively and strengthen soccer school
operations

India Center of
Excellence● Promote Mercari JP and US product development
leveraging the Bengaluru Ofﬁce● Promote the establishment of a borderless organization byhiring around 50–60 people in FY2023.6, mainly software
engineers46

4

FY2023.6 Business Objectives—Focus Points

Balancingmanagement ofgrowth and proﬁts

Strengthening
Group synergies

Building a globalorganization● Building a lean businessfoundation● Growth through disciplined
investments with clear
priorities● Strengthening listings
through collaboration
between C2C and B2C● Strengthening cooperation
between paying, buying,and selling● Continued strengtheningof technology base
● Strengthening andpromotion of ESG

47

ESG

48

5

ESG—Mercari’s Five Material Topics (Materiality)●

We work to maximize opportunities and minimize risk for each material topic, aiming for sustainable growth.
Goals and Actions

Material Topic

Creating a Circular
Economy/Mitigating
Climate Change● We will continue to pursue our idea of planet positive, where Mercari not only minimizes
its environmental burden but helps solve environmental issues through business andcreates a circular economy where our ﬁnite resources are used sparingly.

2

D&I● We tackle structural discrimination and inequality issues by building a work
environment where people of all backgrounds can achieve their maximum potential.
We also strive to realize a service accessible to all.

3

Local Empowerment● By ﬁnding solutions to issues unique to regions across the country, we aim tocontribute to local economies and empower individuals and businesses.

4

Safe, Secure, and Fair
Transactions● We strive to provide a platform for secure and fair transactions so our users, merchants,
and business partners feel at ease using our services.

5

Corporate
Governance andCompliance● We aim to establish a sound and transparent internal decision-making process to earn
the trust of not only our users and business partners, but society as a whole.

1

1. For details, see our Sustainability Report. URL: https://about.mercari.com/en/sustainability/49

5

ESG—Value Creation Process●

We work to sustainably increase corporate value by strategically allocating resources to maximize
opportunities and minimize risks associated with each material topic.

147 billion JPY150
1. Full-year results for FY2022. GMV: Total GMV after cancellation

5

ESG—Mitigating climate change:

Targets for reducing greenhouse gas emissions●

By 2030, aim to reduce Scope 1+2 emissions by 100% and emissions related to added value for Scope 3 by 51.6%1
By June 2022
Scope
1+2

Achieved 75% reduction target

Scope
3

Determined targets aiming for SBT
certiﬁcation by June 2023

(Used renewable energy for 100%of our ofﬁce electricity)

By June 2030

Reduce emissions by a total of 100% by 2030

NEW

Reduce emissions related to added value by
51.6% by 20302

Upstream

Approach to greenhouse gas emissions within the
supply chain

Scope 3The items exchanged between Mercari users are not goods purchased, obtained, or sold byMercari. Mercari also does not bear the transport costs of those items. For that reason, we
understand that emissions related to the transport of items in transactions between Mercari users(1) Purchased(2) Capital
do not fall under the calculations of Scope 3’s category 4 or 9, based on the Ministry of thegoods and services goods
Environment’s “Basic Guidelines regarding Calculation of Greenhouse Gas Emissions in the Supply
Chain.”
Other: (3) Fuel- and energy-related activities;(4) Upstream transportation/distribution;(5) Waste; (6) Business travel; (7) Employee commuting;(8) Upstream leased assets

Mercari Group

Downstream

Scope 1

Scope 2

Scope 3

Fuelburning

Electricity
usage

Disposal of
products

Other: (9) Downstream transportation/distribution;(10) Processing of sold products;(11) Use of sold products; (13) Downstream leased assets;(14) Franchises; (15) Investments
Note: The numbers above correspond to each Scope 3 category

1. Scope 1: Direct emissions from fuel use by our company; Scope 2: Indirect emissions accompanying use of electricity/heat provided by another company
Scope 3: Supply chain emissions from company activities, excluding those covered in Scope 1 and Scope 2
2. Our targets fall under category 1, “Purchased goods and services”

51

Appendix

52

Board of Directors Structure

5●

Appointing Outside Directors with a wealth of knowledge and experience in a variety of areas to realize atransparent and highly diverse organization

5 Directors
Directors (2)Shintaro Yamada
Chief Executive Ofﬁcer

Fumiaki Koizumi

President
CEO of Kashima Antlers F.C.
Co., Ltd.

Independent Outside Directors (3)Ken Takayama

Makiko Shinoda

Norio
Murakami

53

Strong Governance Structure (Independent Outside Directors)

5

Makiko Shinoda

Ken Takayama

Norio
Murakami

Background
•
•
•
•
•
•
•

The Industrial Bank of Japan, Limited (currently
Mizuho Bank, Ltd.)
Chief Financial Ofﬁcer of Rakuten, Inc.
Outside Director of STAR FESTIVAL INC.
Outside Director (Audit and Supervisory
Committee Member) of TECHMATRIXCORPORATION (current position)
Outside Director (Audit and Supervisory
Committee Member) of Metaps Inc.
Outside Board Member of MEDIA DO Co., Ltd
Outside Board Member of RENOVA, Inc. (current
position)•

The Long-Term Credit Bank of Japan, Limited(currently 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)

•
•
•
•
•

•
•
•
•
•
•

Hitachi Electronics Corporation (nowHitachi Kokusai Electric Inc.)
Chairman Emeritus of Google Japan,
Inc. (currently Google Japan G.K.)
External Director, V-cube, Inc. (current
position)
External Director, Weathernews Inc.
Chairman and Representative Director,
ENERES Co., Ltd.
Outside Director, CellSource
Corporation (current position)

Reasons for Selection
as Outside Directors•

Specialized knowledge and extensive experiencein the ﬁnancial business and managing internet
services companies.

•

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

•

Management experience and technicalknowledge of global companies

54

5

Consolidated BS

1

1. Includes long-term borrowings planned to be repaid within 1 year

55

5

Major Itemization of Consolidated BS●

We will continue to leverage various methods of ﬁnancing and appropriately control our balance
sheet to support business growth while maintaining a sound ﬁnancial foundation.
FY2022.6

Mainly deposits related touser funds

With regard to preservation of user
funds, we act in accordance withlaws regarding funds transfer
services, etc., by depositing funds tothe authorities and concluding a
Guarantee Contract for Security
Deposits for Providing Funds
Transfer Service with ﬁnancial
institutions

Receivables from Merpay
Smart Payments(lump-sum andﬁxed-amount payment)
and transactions within
Mercari

Cash on handand in banks
211.4B JPY

Guarantee deposits
26.7B JPY

Other receivable
80.2B JPY
Other: 21.3B JPY

CB1+ long-termborrowings
77.0B JPY
Deposits
received
139.0B JPY
Short-term borrowings(liquidating receivables)

54.2B JPY

Other: 31.4B JPY

Net assets
37.9B JPY

Mainly 50.0B JPY in CB1
and 25.7B JPY in one-year
long-term borrowings (also,
1.3B JPY in borrowings of lessthan one year)

We carry out ﬁnancing of long-term
funds from multiple ﬁnancial institutions
to strengthen our ﬁnancial foundation

Mainly Mercari sales
balance (including US) andwallet balance from users
adding funds from banks

Mainly funds ﬁnanced byliquidating receivables

Liquidated receivables at the
maximum amount of 50.0B JPY for
lump-sum payment and 60.0B JPY
for ﬁxed-amount payment

Total assets: 339.8B JPY
1. Convertible bond-type bonds with stock acquisition rights issued in July 2021 (due in 2026: 25 billion JPY, due in 2028: 25 billion JPY)

56

5

Consolidated P&L

1

1. Operating income + Depreciation and Goodwill amortization57

5

Consolidated CF

58

5

Mercari JP PL

1

59

5

Merpay PL

60

5

Mercari US P&L1

2

1. Based on US GAAP. Different in booking method from the ﬁgures of Mercari US included in Consolidated PL (J GAAP)
2. Adjusted operating proﬁt after non-cash items (i.e., stock-based compensation and depreciation) are deducted61

5

Mercari JP—Q4 Cost Structure●●

Disciplined investment with priorities led to a signiﬁcant decrease in promotion costsin Q4.
Impact of fraudulent use in Q4 was a 1.2 billion JPY increase in commission fees and a
0.1 billion JPY increase in promotion costs.

(Billion JPY)
1

1. Outsourcing expenses, rent, and taxes and dues625Q4 (Apr–Jun)—Category Shift
Mercari JP

Mercari US

Slight increase in Electronics YoY,
but no major change overall

FY2021.6
Q4

FY2022.6
Q4

Slight increase in Toys YoY,
but no major change overall

FY2021.6
Q4

FY2022.6
Q4

63

5

Merpay—Credit

Volume of Deferred Payment in the EC Market1
●
●

1,909

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

billion JPY

1,089

billion JPY

440

billion JPY

Outlook

Forecast

Forecast

Forecast

Forecast

1. Source: E-commerce Payment Services (Payment Gateway) Market in Japan: Key Research Findings 2022. Survey by Yano Research Institute (notice: based on the transaction amount of deferred payment service providers)64

5

Mercari US—US Reuse Market●●

The US online reuse market has more than doubled since 2015 and is expected to reach approx. 200 billion USD
by 2030.
Key categories to watch include apparel and electronics, some of our strongest areas, while the data overall
supports our strategy of continuing to strengthen our horizontal marketplace covering a wide range ofdemographics and categories to meet the growing market demand.

2030 Forecast

US Online Reuse Market

2015$25 billion$196 billion

2020$56 billion

Source: Mercari US ”The Reuse Report”

65

5

For Investors New to Mercari●

Materials that cover basic information regarding Mercari Group

Fact Book link
https://speakerdeck.com/mercari_inc/mercari-fact-book-en

Overview link
https://speakerdeck.com/mercari_inc/merpay-overview-en

66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 FY2023.6 Q1 ﬁnancial results are scheduled to be released at 15:00 or later on
October 31.

67