Q2 Results for FYE Jan. 31st 2017 (13th Period)

Presentation Material01

Company ProfileCompany Name

Enigmo Inc.

Main Business

Management of social shopping site "BUYMA"

Location

Juko Bldg. 7F, 1-26-1 Minami Aoyama, Minato-ku, Tokyo

Date of Establishment

February 10th, 2004

Representative

Representative Director and Chief Executive Oﬃcer Shokei Suda

Capital381.9 million yen

Number of Employee

85 people (consolidated, 68: non-consolidated) (As of end of January, 2017)

Accounting Period

January 31stMajor Shareholder

Executive oﬃcers & Sony CorporationAudit firm

Ernst & Young ShinNihon LLC

02

Highlights From the First Half of FYE Jan. 2017

-Member registration has significantly increased due to the increase in recognition achieved
through the previous year’s mass campaign efforts.

-Achieved record revenue and operating income in the past half-year.
Plans are underway to revise Enigmo's full year's earnings forecast due to progress made inits business performance.

Business Overview
Financial Figures (Consolidated)
Total Transaction Amount

14.82 Billion Yen （140.6% YoY）

Operating profit

820 Million Yen （ー% YoY）

Sales

1.90 Billion Yen （159.4% YoY）

Ordinary profit

820 Million Yen （ー% YoY）

Net profit

540 Million Yen （ー% YoY）

KPIMembers

3,486,313 (135.8% YoY)

New Member Registration

475,115 (140.1% YoY)

Number of Personal Shoppers

82,000+ (116.0% YoY)

GLOBAL BUYMA Status- Over 3 million items listed as of June 2016
- English-Language version of site officially launched July 201603

Highlights From the First Half of FYE Jan. 2017（Consolidated）

The trend of our full-year's earnings forecast
has been overall positive
First Half FYE Jan 2017

Previous YearFYE Jan 2017
Forecast

YoY

Progress rate

Total transaction
amount ※14,828million yen

10,548million yen

140.6%

26,896million yen

60.7%

Revenue

1,909million yen

1,198million yen

159.4%

3,263million yen

58.5%

Operatingprofit/ loss

821million yen(41million yen)ー

1,001million yen

82.0%

Ordinary
profit/ loss

824million yen(45million yen)ー

1,001million yen

82.3%

Extraordinary income/loss・Income tax

549million yen(61million yen)ー

606million yen

90.6%

26.39 yen

(2.88 yen)ー29.14 yen

90.6%

Net income/ loss

※Total transaction amount: total settlement amount including the product price and settlement fees04

Revenue trend

Revenues have significantly increased (159.4% YoY)
Non-consolidated basis

Consolidated basis

3,000

2,858

2,500

2,285

2,000

1,500

1,909

1,823
1,439
1,198

1,000

2Q

500

0
FYE
Jan.2013

FYE
Jan.2014

FYE
Jan.2015

FYE
Jan.2016

2Q (May~July)
Jan.2017(Unit：million yen)05

Selling, General and Administrative Expenses (Consolidated)

Advertising expenses were significantly reduced (75.9% YoY)

First Half FYE Jan. 2017

Previous Year

YoY

Personnel Expenses

291million yen

215million yen

135.2%

Advertisement expenses

258million yen

678million yen

38.2%

9million yen

4million yen

189.8%

Other

227million yen

138million yen

164.7%

Total

787million yen

1,037million yen

75.9%

Depreciation

06

Operating Profit and Margin (Non-Consolidated)

Last year, operating profit had dropped
due to advertising expenditures spent on mass campaigns the previous year,
but this year's operating profit and profit-margin has recovered significantly.
Non-consolidated basis

1,500

Consolidated basis

52.3%
46.7%

1,200

43.0%

1,196

41.5%

900821852
24.1%
597600

300

219

205

7.7%

0-41 -3.5% 2Q
FYE
Jan.2012(Unit：¥million yen )FYE
Jan.2013

FYE
Jan.2014

Operating Proﬁt

OP Margin

FYE
Jan.2015

FYE
Jan.2016

2Q (May~July)
Jan.2017

07

Overview of
BUYMA’s Business08

Profile of BUYMA’s Business

BUYMA is a social shopping site that offers a unique shopping experience
with unlimited fashion merchandise by connecting individuals of
the world through its own unique “C to C” servicesMembership

3,486,313 people

Number of items
on display

16,000+ per day

Number of PersonalShoppers

82,000+ people

Number of countries where
Personal Shoppers reside

130 countries※Data taken July month-end 201609

Trend of the number of BUYMA Registered Members

Registered membership numbers have now exceeded 3.4 million people,
and with our YoY at 135.8%

3,486,313

3,500,000

3,004,769
2,800,000

2,567,000

2,235,261

2Q

2,100,000

1,693,994
1,400,000

1,190,574

700,000

0
FYE
Jan.2013(Unit：Person)

FYE
Jan.2014

FYE
Jan.2015

FYEJan.2016

2Q (May~July)
Jan.2017※Includes English version from FYE Jan 2016 and Korean version from FYE Jan 201710

Trend of the number of active BUYMA members

We have achieved over 760,000 active members and is steadily increasing,with our YoY at 142.5%

769,542800,000

634,152
600,000

514,989

539,9582Q

449,620400,000

304,816200,000

0
FYE
Jan.2013(Unit：Person)

FYE
Jan.2014

FYE
Jan.2015

FYE
Jan.2016

2Q (May~July)
Jan.2017※Active Number of Members：purchase history of members during the this past year.
※Includes English version from FYE Jan 2016 and Korean version from FYE Jan 201711

Buyma’s Total Trading Volume

Total transaction volume exceeded 14.8 billion yen with our YoY at 140.6%.

24,44025,00020,68420,00014,828

17,11515,00013,642

10,000

10,548
2Q

5,000

0
FYE
Jan.2013(Unit：million yen)

FYE
Jan.2014

FYE
Jan.2015

FYE
Jan.2016

2Q (May~July)
Jan.2017※Total transaction amount: total settlement amount including the product price and settlement fees
※Includes English version from FYE Jan 2016 and Korean version from FYE Jan 201712

Total Number of Buyma Transactions

Total of 870,000 transactions were made,steadily increasing with a YoY of 149.0%.

1,400,000

1,309,714

1,200,000

1,125,819

875,893

1,004,528

1,000,000

800,000

693,099
600,000

587,9122Q

400,000

200,000

0
FYE
Jan.2013(Unit：Item)

FYE
Jan.2014

FYE
Jan.2015

FYE
Jan.2016

2Q (May~July)
Jan.2017※Includes English version from FYE Jan 2016 and Korean version from FYE Jan 201713

Highlights on Measures Implemented
First Half of FYE Jan 2017 andMeasures Planned for the Second Half

14

Highlights of measures Implemented in the First Half of FYE Jan. 2017
Brand recognition was effectively increased due tothe success of the mass marketing campaign in the last fiscal year.
For the current fiscal year, by implementing numerous internal measures
such as customer acquisition ads and function improvements,
the Company hopes of effectively increase member acquisition, activation rates, and ARPU.

Results for the first half of FYE Jan., 2016

Members

Activation Rate

ARPU

136% YoY

111% YoY

94% YoY※YOY is comparing to the 1H last year February- July)※Includes English version from FYE Jan 2016 and Korean version from FYE Jan 2017

The 2-stage implementations completed during the current and previous fiscal year was an overall success.
The first half saw a huge surge of members and activation rates with total transactions at 141% YoY15

Measures for Member Acquisition – Customer acquisition Advertisement and Curation media（STYLE HAUS）
Leveraging the high recognition (42% as of August 2016),
implement customer acquisition ads and implement curation media;
And approach those non-members who now recognize BUYMA through previous year’s mass campaign

Reach out to people
who now recognize BUYMAduring FYE Jan 2017

ImplementMass Marketing Campaign
during FYE Jan 2016

Registration

AccessPotential customers
who know of
BUYMA but are not yet members

A web media
leveraging the informationof BUYMA items

Members
136%YoY

Expand customer
acquisition ads throughSNS or Search Enginemarketing

16Increase Activation rate of members

Activation rate decreased temporarily after the mass campaign
But has steadily increase by strengthening various internal measures(for 1H FYE Jan 2017, the activation rate was 111% yoy)
Number of active members and active %800,000

22.5%

2H mass campaign
Mid November- mid December 2015

600,000

1H mass campaign
Mid June- mid July 2015

22.0%

400,000

21.5%

200,000

21.0%

0

20.5%
1Q

2Q

3Q

FYE
Jan.2016(Unit：Person)

Active Number of Members

4Q

1Q

2Q

2Q (May~July)
Jan.2017
Activation rate

※Active Number of Members：purchase history of members during the this past year.
※Includes English version from FYE Jan 2016 and Korean version from FYE Jan 2017

※Activation rate：Active members÷total members for the same period

17Measures to maintain ARPU

While unit prices have slightly decreased against
the backdrop of increased registration of new members,
number of transactions have remained flat.
Average

Average purchase per person

UnitPrice

Number ofTransactions

ARPU

94%YOY

100%YOY

94%YOY

Slight decrease

Remained Constant※YOY is comparing to the 1H last year February- July)※Includes English version from FYE Jan 2016 and Korean version from FYE Jan 201718

Measures to implement for 2H FYE Jan 2017

Continue to increase membership numbers andincrease activation rate of members
Also, take measures to maintain the ARPU which has been slightly declining※2H FYE Jan growth rate will be lower on a yoy basis,as there was significant growth 2H lasts year from mass promotional campaigns

Measures for 2H FYE Jan 2017

AcquireMembers

Increase
Activation rate

Maintain
ARPU

ExamplesExamplesExamples‣ Customer acquisition‣ CImprove app functions

advertisements‣ Curation media（STYLE HAUS）→ Strengthen the push
notification to make it
more personal→Show articles from“STYLE HAUS”
within the app‣ Strengthen therecommendation function‣ Improve functions for

Personal Shoppers→ periodically send
information on items thatare selling well, so thatthe quality of their oﬀering
items will improve‣ Improve functions forpurchasers‣ Points‣ Coupons‣ Schemes for bulk buying
19

GLOBAL BUYMA( English & Korean Version )20

GLOBAL BUYMA

Launched the grand opening of BUYMA English Version in July 2016

21

GLOBAL BUYMA

Official launch of Buyma's English version in July 2016
in the US and Hong Kong as major markets
POPBEE

ButterBoom

A media site targeted towards the fashion
savvy females in their 20s-30s

Media site about high-end brands
targeted towards high-income earners

In the section which introduces what is popularin the news: “An English site is launched for theNo. 1 shopping website in Japan which sells
international brands”

Introduced as follows: “Can purchase brands
inaccessible in HK at locally oﬀered prices.
They not only oﬀer fashionable clothing, butalso home items”（http://popbee.com/fashion/fashion-news/popbites-for-today-20160722/）（http://butterboom.com/tech/buyma-japans-1-personal-shopping-service-site-launches-english-website/）

22

GLOBAL BUYMA

Membership has continued to steadily increase after the grand opening of
BUYMA English Version (July 2016).
Shipment made outside Japan reached to 26 countries
GLOBAL BUYMA

Trend of New Member Registration
July Launch of English-Language
Services in July 2016

Shipment made outside Japan

26 countries

Average Unit Price : ¥32,626
Average Age : 34.8

Korea : 74.6%

Gender : 67.0% Female 33.0% Male

HongKong : 12.7%(Data as of July 31, 2016)

US : 5.0%
Singapore: 1.4%
Australia：0.9%

1Q

2Q

3Q

4Q

FYE
Jan.2015(Unit：Person)

English Version

1Q

2Q

3Q

FYE
Jan.2016

4Q

1Q

2Q

FYE
Jan.2017

Korean Version

Thailand：0.9%
Other Countries : 4.5%

23

GLOBAL BUYMANumber of items exceeded 3 million in June 2016
Transition of the number of items offered in GLOBAL BUYMA

3 million and growing

3,500,000

2,800,000

2,100,000

1,400,000

700,000

01Q

FYE Jan.2016

2Q
FYE Jan.2017(Unit：Items)

English Version

Korean Version

24

GLOBAL BUYMA – measures for 2H FYE Jan 2017

Expand the number of exhibited items to the same level of theJapanese version of BUYMA Shift to the phase of increasing numberof visits and CVR to increase the number of transactions

Measures for1H FYE Jan 2017

Increase numberof items
3 million items andgrowing Same level as
the Japanese version

Measures for2H FYE Jan 2017

Measures toincrease visits
Improve SEO
Strengthen Promotions

Measures toimprove CVR

Beyond FYE Jan
2018

Establish world-wide,
the BUYMA brand,"You can buy the world"
Add Japanese items(capture inbound demand)
Open doors to non-Japanese
Personal Shoppers

Strengthen function
Strengthen operation

25

Medium-term strategy

26Medium-Term Strategy – BUYMA ecosystem

BUYMA Ecosystem
Establish a BUYMA ecosystem
To encounter and purchase an item on BUYMAThen re-sell items one no longer needs…
Providing a one-stop service from encounter to disposal

RelatedBusiness

Create additional related businesses from theBUYMA ecosystem and expand market size
Continuously generate high profits domestically,
and invest in GLOBAL BUYMA,
And by nurturing BUYMA into a global brand,
Aim for a “home run” in large scale markets
such as the United States and rapid growing
markets such as Asia and the Middle East

Encountering
new items

Selling items
No longer usedMediaResale(Curation)※Japanese27

Medium-Term Strategy – Medium-Term Targets

By constantly increasing revenue and profit,
we are aiming for an operating income of 5 billion yen
BUYMA
GLOBALMedia Business/Related-BusinessResaleMedia

Resale Business

BUYMA GLOBAL ( English-Version・Korean Version )BUYMA ( Japanese Version )FYEJan.2015

FYEJan.2016

We will properly reinvest towards long-term growthwith the continuing expansion of BUYMA's ecosystem.
3828

VisionNo.1 in Social Commerce
E-Commerce is a rare market with “extraordinary" growth prospects
Among the various transaction styles,
the C to C transaction of BUYMA is an area which is attracting much attention as thecommerce for the next generationEnigmo will, in this rapidly expanding e-commerce market,Provide value through unique services thatleverage the power of the individual through C to C transactions,and establish its position as No. 1 in “Social Commerce”
And by doing so, will provide a new lifestyle to as many individuals all around the world29

Mission Statement

Creating Change

30This presentation material is provided solely for the purpose of better understandingof our company and its business and is not intended for solicitation purposes.
Forward-looking projections contained are made based on assumptions and plans
available as of today. Actual business performance may diﬀer from projections due torisks and uncertainties in the future.