We primarily operate businesses in three segments: Marketplace (our flagship cross-category C2C marketplace Mercari and the B2C marketplace Mercari Shops), Fintech (the mobile payment service Merpay), and US (the C2C marketplace Mercari in the US). See our Business Activities page for more information regarding our main services.

Through our businesses, Mercari works to contribute to solving environmental issues and create a “planet-positive”^* world in which people can continue to create new value by sharing limited resources across generations. We have identified five topics as our materiality, and take on initiatives in these areas as part of our continued efforts to achieve a more abundant society. Our five material topics are “Empowerment of Individuals and Society,” “Creating a World That Circulates All Forms of Value,” “Creating a New User Experience Through Technology,” “Building Long-Term Public Trust,” and “Unleashing the Potential in Diverse Talent Worldwide.” For more details, see our Sustainability page.

^*“Planet positive” is based on the concept of “planetary boundaries” (the earth’s limited resources). Mercari Group 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.

See our Corporate Governance pages (Our Corporate Governance Principles, Corporate Governance Structure, Effectiveness of the Board of Directors, Compliance and Risk Management).

See our IR Calendar.

For Marketplace and Fintech, adjusted figures exclude internal transactions between Marketplace and Fintech (outsourced payment processing fees). For US, adjusted operating profit is the amount after non-cash items (i.e., stock-based compensation and depreciation) are deducted. This adjustment is carried out to match the disclosure standards of other companies in the industry in the US market.

Core operating profit is defined as IFRS operating profit excluding other income/expenses, etc.

This figure comprises the sales balance we temporarily hold for sellers after they sell an item on Mercari, the money we hold for users when they add funds to their Merpay account from a bank account, and the sales balance we temporarily hold for merchants after users choose to pay for purchases using Merpay at merchants.

This figure refers to the security deposit we deposit to institutions in accordance with laws and ordinances as a guarantee for the deposits received that we temporarily hold for users.

This figure primarily refers to money that we have deposited mainly with payment service providers so that users are able to withdraw their sales balance early, which is a part of the deposits received that we temporarily hold for users.

This figure includes expected payments for the unpaid balance of Merpay Smart Payments (lump-sum payment/fixed-amount payment) made by users. This is climbing primarily due to the increase in unpaid balance as a result of continuous product improvements creating more opportunities for users to utilize this service.

Our basic policy is to carry out financing by liquidating receivables for Merpay Smart Payments (lump-sum payment/fixed-amount payment). In FY2023.6, we began receiving external ratings for a portion of liquidated fixed-amount payment receivables and carrying out non-recourse financing^*, in which we procure funds based on the credibility of the credit receivable itself. We strive to appropriately control our balance sheet to maintain a sound financial foundation. We will continue to diversify our financing methods centered around non-recourse receivable liquidation to match the growth of our credit services going forward. ^*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

This mainly refers to fees paid to contracted payment service providers.

We transitioned to using IFRS with the objective of enhancing international comparability.

At the present stage of our business, in which we have determined that we still have significant room for growth, we believe that it is most important to maximize future profits while growing our top line by strengthening our existing businesses and breaking into new areas both within Japan and overseas. However, we strive to maintain an appropriate balance between growth and profitability by evaluating the cost-effectiveness of initiatives using internal criteria and making disciplined investment decisions.

Given changes in the external environment, we reviewed our investment discipline and priorities to focus investments more on mid- to long-term growth, rather than short-term results. For example, when considering marketing initiatives, we reduced investments that tend to contribute to short-term GMV growth but are less cost-effective, and instead prioritized investments that will steadily accumulate results in the mid-to-long term, such as new user acquisition and onboarding. With regard to product initiatives, we will promote simplifying listing, packing, and shipping in order to grow the user base by enhancing the user experience for listers. In FY2024.6, we have not changed our basic approach, but we are taking on the creation of new businesses while accelerating the growth of existing businesses.

Unlike typical B2C businesses, C2C marketplaces are unique in that the sellers of items are ordinary consumers as well. It is essential to maintain an optimal balance of sellers and buyers in order to grow the business. If there are not enough buyers, sellers have difficulty selling their items; if there are not enough sellers, buyers have difficulty finding items to buy. We promote product improvements and marketing initiatives with this balance in mind.

In both Japan and the US, Q2 (October–December) and Q3 (January–March) are the peak season due to increased demand for winter clothing items, which tend to have high unit prices.

In both our C2C and B2C businesses, our primary source of sales is the selling fee (10% of the purchase price) we receive from sellers upon the sale of an item.

While we have no plans to change our fees at present, we will reconsider it as necessary taking into consideration similar services and the market environment.

In a survey carried out by Mercari in April 2021, we estimated that there are approx. 36 million lister prospects¹. We believe that by acquiring new users mainly in the middle-aged and older demographic, we can achieve further growth. Additionally, according to an estimate by the Ministry of Economy, Trade and Industry (METI), the C2C EC market reached 2,212.1 billion JPY in 2021, an increase of 12.9% YoY.<sup>2

1</sup> Based on a survey conducted in April 2021 that polled 9,189 men and women aged 18 to 74. Lister prospects refers to people who are aware of Mercari and intend to list items, but have not listed anything yet; the survey does not take into consideration whether the respondent has downloaded the app or has experience buying items on Mercari. Survey contractor: Macromill
² “FY2022 E-Commerce Market Survey Report”, METI

We consider Mercari’s greatest strength to be that users can buy and sell anything, rather than inclining toward any one specific category. In FY2024.6, we will continue to strengthen all categories for a well-balanced marketplace, while also selecting focus categories with large market sizes and room to grow on Mercari, implementing optimal UX for those categories, and carrying out marketing initiatives timed to coincide with increased demand for those categories, such as seasonality. By doing this, we aim to grow GMV further.

In hearings Mercari has carried out, we found that two of the major issues small businesses and producers face when opening online shops are the technical knowledge required to operate an online shop and a lack of successful sales after opening a shop. Mercari Shops provides a platform just like Mercari where anyone can easily open a shop and sell items, as well as the ability to leverage Mercari’s user base of over 20 million people. We aim to use these solutions to allow a wide variety of small businesses and producers to easily open up online shops and successfully sell their products. Additionally, the number of large-scale business operators who have opened shops on Mercari Shops, mainly to sell secondhand items and outlet items, is increasing due to the strengthening of API connections.

We believe that by including items listed on Mercari Shops alongside items listed by individual users, we can increase the variation of items available on Mercari, enhancing the shopping experience for buyers. We also believe that as the number of attractive shops that gravitate toward Mercari Shops increases, it will create opportunities for an even wider range of people to use Mercari, including those who have never used Mercari before. This increase in users will likely lead to more opportunities for individual sellers to sell their items as well.

The payment domain is an essential infrastructure for all transactions on the Mercari service. Since Merpay was established, we have worked to enhance the UI and UX to provide a seamless transaction experience. With respect to enhancing profitability, we have been focusing on the credit domain since FY2021.6. As a result, we have made progress in establishing a profit base, achieving a full-year unadjusted operating profit for the first time in FY2022.6. We will continue to advance business growth, particularly in the credit domain, and promote the concept of circular finance as we work toward establishing a new financial culture.

We began our Fintech business in 2019 with the belief that providing Mercari and Merpay as a single service would enable users to more seamlessly circulate both items and money. We have created a cycle that allows users to sell items they no longer need on Mercari, use the money gained to buy new items through Merpay, and sell those items on Mercari when they are done using them. As we aim to promote a circular economy, we believe that Merpay, as our connection with primary distribution, fulfills its role as a bridge between primary distribution and secondary distribution. In addition, introducing Merpay Smart Payments (lump-sum payment/fixed-amount payment) to the market contributes to creating new purchase opportunities, such as enabling users to buy items that would have remained out of their reach in the past. In November 2022, we launched Mercard, as well as a regular point-back rewards system. Through this, we aim to create Group synergy, such as by promoting the three actions of paying, buying, and selling to maximize Mercari GMV and by encouraging the use of Mercard to contribute to reducing payment processing fees.

Our main objective is to create Group synergy, such as by promoting the three actions of paying, buying, and selling through our regular point-back rewards system to maximize Marketplace GMV and by increasing the use of Mercard within Mercari to contribute to reducing payment processing fees and enhance Group profitability. We also expect increased use of Mercard (both within and outside of Mercari) to contribute to the Group by enhancing the profitability of the credit business.

One of our primary focus areas is our deferred payment service. We consider this a promising market with continued growth potential. Studies estimate that the total payment volume of deferred payment services in the EC market will rise from 1,082 billion JPY in 2021 to 2 trillion JPY in 2026.<sup>*

*</sup>Source: “Online Payment/Settlement Service Providers 2023”, Yano Research Institute Ltd. (published March 29, 2023) (Note: Numbers based on transaction volume of deferred payment service providers)

In 2021, we were the first business to obtain No.1 certification as a comprehensive credit purchase intermediary (AI credit). We carry out rigid risk management, leveraging our unique AI credit by calculating appropriate usage amounts that take into account credit based on each user’s behavior history, such as Mercari usage history, instead of traditional attribute information.

Our mission is to circulate all forms of value to unleash the potential in all people. In March 2023, we launched a service to buy and sell bitcoin within Mercari, with the belief that leveraging blockchain technology for value exchange will allow us to create a new user experience where anyone can easily exchange all forms of value, including services and digital content in addition to goods and money.
The monthly amount of cryptoasset transactions in Japan is approximately 500 billion JPY.¹ However, only 1.7% of Japan's population owns cryptoassets², a low number compared to other countries, showing large room for growth. We aim to popularize this service mainly among casual users who have no prior experience buying bitcoin.

¹. Japan Virtual and Crypto assets Exchange Association, “Monthly Cryptoasset Transaction Data” (January 2023) ². TripleA: “Cryptocurrency Ownership Data” (as of April 3, 2023)

We previously received a selling fee from sellers upon the sale of an item, but as of March 27, 2024 (local time), we have changed to a business model in which we receive from buyers a service fee (the rate depending on category, brand, and other factors) and a 2.9% + $0.50 payment processing fee. Our actual take rate^* is the sum of these fees plus fees for additional services utilized by many of our users, such as our Instant Pay and Mercari Authenticate services.

^*Calculated based on net sales data that is calculated based on net results for shipping revenue and costs. Under US GAAP, net sales for Mercari US are calculated based on gross results for shipping revenue and costs. Under Japanese GAAP, net sales were calculated based on net results through FY2021.6, but due to the adoption of the new sales recognition standards, are calculated based on gross results as of FY2022.6.

The US market has multiple specialized services, such as services that only offer shipping options, services specific to certain categories, and services that require face-to-face transactions. However, we are establishing a unique position in the market as a cross-category C2C service that offers a variety of shipping options. We plan to continue strengthening this unique position to aim for mid- to long-term growth.

We consider this a promising market with continued growth potential, with a study carried out by Mercari US in partnership with a research organization (Mercari US, “The Reuse Report”) estimating that the US online reuse market is expected to grow from 74 billion USD in 2022 to approx. 180 billion USD by 2030.

WTYO: 4385.

100 shares.

Currently, we do not provide a shareholder benefit plan. Please see Shareholder Returns Policy for more details.

The Shareholders Meeting is held in September every year. The date and venue will be updated on the Shareholders Meeting page upon confirmation.

Sumitomo Mitsui Trust Bank, Limited.

Please contact the securities company at which you made your trading account. If you have a special account in which shares are recorded, the Securities Agency Department from Sumitomo Mitsui Trust Bank, Limited will be responsible for your stock procedures. For further details, please take a look at our Stock Procedures page.

For the time being, our policy is to prioritize strengthening our financial foundation through investment in growth opportunities and our internal reserves; we do not have plans to pay dividends at present.