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Mercari, Inc.

May 09, 2024

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  1.    Index Company Overview P3: Group Mission P4: Company Overview

    P5: About P6–7: Our Leadership P8: Values P9: Medium-Term Milestones to Achieve Our Mission P10: Positive Impact of Mercari’s Business P11: By the Numbers (Consolidated) P12: Marketplace—GMV/MAU P13: Market Potential P14: Japan Region—FY2024.6 Group Synergy Businesses P15: Marketplace P16–29: Mercari JP P30–32: Mercari Shops P33: Fintech P34–45: Merpay P46–55: Mercoin P56–62: Mercari Hallo P63–69: Mercari US Appendix P71: Governance Structure P72–77: Leadership Profiles P78: Work Environment P79: ESG Policy (Materiality) P80–81: Inclusion & Diversity P82: Mercari R4D (R&D) P83: Sports Business P84–86: History 2
  2.    Japan Region Mercari Group Fintech 4 Company Overview Mercari

    Group is made up of Mercari, Inc., and its consolidated subsidiaries. Marketplace Mercari, Inc. Established Activities Locations Offices Representative Representative of Mercari marketplace February 1, 2013 Planning, development, and operation of the Mercari marketplace app Roppongi Hills Mori Tower, 6-10-1 Roppongi, Minato-ku, Tokyo 106-6118, Japan Tokyo, Fukuoka Shintaro Yamada Masato Yamamoto 1. November 20, 2017 2. Financial-related businesses 3. Takeshi Nagasawa Merpay, Inc. 1. January 2014 2. Planning, development, and operation of the US version of Mercari 3. John Lagerling 4. Palo Alto, CA Mercari, Inc. (US) 1. October 1, 1991 2. Management of a soccer club 3. Fumiaki Koizumi 4. Higashiyama 2887, Aō, Kashima, Ibaraki, Japan Kashima Antlers F.C. Co., Ltd. 1. June 2022 2. Development of internet services 3. Carlos Donderis (Managing Director) 4. Bangalore, Karnataka, India Mercari Software Technologies India Private Limited 1. April 28, 2021 2. Cryptoasset- and blockchain-related services 3. Keita Nakamura Mercoin, Inc. 1. Established, 2. Activities, 3. Representative, 4. Locations
  3.    About February 1st, 2013 Established Tokyo, Fukuoka, Osaka, Palo

    Alto, Bangalore Offices 2,150 (including subsidiaries) Headcount 5
  4.    Independent Outside Directors (6) 10 Directors Directors (4) Shintaro

    Yamada    Representative Executive   Officer and CEO Fumiaki Koizumi President / CEO of Kashima Antlers F.C. Co., Ltd. Makiko Shinoda 6 Our Leadership: Directors Masayuki Watanabe Kazuhiko Toyama Takuya Kitagawa Daiken Tsunoda Fumiyuki Fukushima    Mayumi Tochinoki  Sayaka Eda Executive Officer, Senior Vice President of Corporate, and CFO
  5.    7 Shintaro Yamada Director, Representative Executive Officer and CEO

    Shuji Kawano John Lagerling Executive Officer, Senior Vice President of Global Strategy / Chief Executive Officer of Mercari, Inc. (US) Masato Yamamoto Executive Officer, Senior Vice President of Japan Region / Chief Executive Officer (Marketplace) / Director of Merpay, Inc. / Director of Mercoin, Inc. / Director of Souzoh, Inc. Sayaka Eda Executive Officer, Senior Vice President of Corporate, Chief Financial Officer / Director of Merpay, Inc. Our Leadership: Executive Officers  Executive Officer, Senior Vice President of Management Strategy
  6.    Values 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. In order to create innovation with a big impact on the world, everyone takes on bold challenges and learns from many failures. All members take ownership of their work as professionals in their field, learn every day, and commit to showing results. Go Bold All for One Be 8 a Pro
  7.    Working with external partners to create a circular economy

    ecosystem Global expansion Medium-Term Milestones to Achieve Our Mission • Create a world that uses technology to seamlessly circulate all forms of value, not just physical things • Promote collaboration with various external partners to work toward creating an ecosystem • Proceed with expansion into other countries, identifying the most appropriate business environment and timing, while prioritizing growth of the US business • Further promote I&D to create a borderless organization where diverse talent all over the world can thrive 9 Market- place Fintech Users Mercari External Partners Technologies Safety and Security
  8.    10 • In select categories1, approximately 530K tons of

    greenhouse gas emissions were avoided in one year by transactions on Mercari2 • Mercari strives 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 circulate seamlessly 1. Target categories: apparel, sneakers, electronics, books/magazines/manga, CDs/DVDs/BDs 2. Calculations done as a joint project between Mercari and the University of Tokyo RIISE’s Value Exchange Engineering Social Research Division. Includes secondhand items that had been sold under the target categories for both Mercari JP and Mercari US between April 2022 and March 2023. Estimated based on factors such as the greenhouse gas emissions involved in the product lifecycle (item production, distribution, use, and disposal) and shipping between Mercari users and frequency of use of Mercari and length of product use life calculated from the results of a Mercari user survey, under the assumption that items bought on Mercari are used in place of new items, thus avoiding greenhouse gas emissions. 3. Greenhouse gas emissions multiplied by their respective global warming potential coefficient and converted to the equivalent amount of CO 2 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 emissions2 Weight of apparel waste avoided thanks to its listing on Mercari (Japan only) Greenhouse gas emissions avoided by transactions on Mercari (by category) 3 530Ktons CO2eq Annually Approx. 220 covered baseball stadiums Apparel Sneakers Electronics Books, comics, magazines CDs, DVDs, BDs Approx. 43Ktons of apparel waste Approx. 4,300 10-ton trucks Approximately 9% of the total 480K tons of clothing thrown away yearly in Japan Positive Impact of Mercari’s Business (Avoided Greenhouse Gas Emissions)
  9.    Consolidated Revenue & Core Operating Profit (Quarterly) 11 Revenue

    Core Operating Profit1 YoY +11% (Billion JPY) Billion JPY YoY -9% 1. Core operating profit is defined as IFRS operating profit excluding other income/expenses, etc.) (Billion JPY) Billion JPY
  10.    Marketplace—GMV/MAU
 12 YoY +3% YoY +8% Billion JPY Million

    users GMV1/MAU2 1. Aggregate transaction value after adjusting for cancellations; aggregates C2C and B2C figures 2. Quarterly average number of users who browsed our service (app or web) at least once during a given month (Million users) (Billion JPY)
  11.    Market Potential of C2C EC Marketplace Apps in Japan

    The market for C2C EC marketplace apps in Japan has grown to 2,363.0 billion yen (6.8% increase from the previous year) over 11 years. This is enormous growth considering that C2C marketplace apps only started to gain traction in Japan in 2012, and the market continues to hold great potential for growth. 
 billion JPY 2021 C2C EC Market Size in Japan 2022 2,363.0
 billion JPY Estimated value of unneeded items1 Approx. 7.6 trillion JPY 13 2021 Marketplace app market3 Approx. 1.2 trillion JPY 
 Annually 2022 Online C2C market2 Approx. 2.3 trillion 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 2022 2022 Mercari GMV4 Approx. 932.7 billion JPY
  12.    14 Japan Region—FY2024.6 Group Synergy Overview Japan Region Increased

    GMV as a result of higher ARPU Decreased payment processing fees Expanded use of credit services • Aiming to create synergy with Marketplace and Fintech working together to enhance UX and carry out marketing Japan Region Marketplace Fintech MAU: over 22.8M GMV: approx. 1T JPY Identity-verified users: approx. 15M Mercards issued: over 3M Crypto trading accounts: over 2M Sales balance, points, data, MAU Japan Region profitability enhancements Mercard (loyalty program), credit, payment features, identity verification
  13.    What Is Mercari? • Service launch: July 2013 •

    Operating systems: Android, iOS (Can also be accessed through web browsers) • Usage fee: Free (Sales fee for sold items: 10% of the sales price) • Regions/languages supported: Base specs for Japan/Japanese • Total number of listings to date: More than 3 billion (As of November 2022) Many sellers enjoy having the items they no longer need purchased and used by buyers who need them, and buyers enjoy the feeling of hunting for treasure as they search through unique and diverse items for lucky finds. In addition to buying and selling, users actively communicate through the buyer/seller chat and the “Like” feature. The Mercari app is a C2C marketplace where individuals can easily sell used items. We want to provide both buyers and sellers with a service where they can enjoy safe and secure transactions. Mercari offers a unique user experience, with a transaction environment that uses an escrow system, where Mercari temporarily holds payments, and simple and affordable shipping options. 16
  14.    Mercari’s Strengths Mercari provides our many users with an

    easy-to-use, fun & engaging, and safe & secure marketplace. Safe & Secure Fun & Engaging For All Easy-to-Use 17
  15.    Mercari’s Strengths: Easy-to-Use
 18 Escrow payment Mercari Shipping

    Listing Barcode Listing
 Mercari acts as a go-between in transactions to prevent disputes
 - Flat-rate shipping across the country - No need to write addresses - Anonymous shipping
 - Automatic data entry - Price suggestions
 Seller Buyer Listing Payment notification Buyer rating Balance Payment Seller rating Delivery
  16.    Simplified listing and communication features We simplify listing with

    features like AI Listing, Barcode Listing*, and Easy Listing, which use machine learning. We also provide plenty of communication features, such as desired price registration and emoji reactions. *Barcode listing is available for books, music, games, cosmetics/perfumes, and consumer electrical appliances 19 Mercari’s Strengths: Easy-to-Use
  17.    20 Pick & Pack TanoMer Shipping No need to

    pack up the item; just wait at home and we’ll come to you. This shipping service supports a wide range of item sizes, as well as safe and secure anonymous shipping. Eco Mercari Shipping Eco Mercari Shipping enables packages up to size 100 to be shipped for a flat rate of 730 yen. Sellers can ship items using the contactless shipping service SMARI, and buyers can instruct delivery personnel where to drop off their delivery. Mercari’s Strengths: Easy-to-Use Convenient, safe, and secure shipping options We offer a wide range of shipping and delivery options so our users can choose the methods that are right for them. Yu Packet Post Mini This newly introduced anonymous shipping method costs only 160 yen (flat rate across the country, tax included), the lowest price of all YuYu Mercari Shipping options.
  18.    Mercari is not limited to apparel; the marketplace also

    carries items ranging from entertainment goods to home appliances to cosmetics. Because numerous sellers list their unique, individual items, it’s possible to come across lucky bargains that can’t be found on other services. The most popular category of items in 2014 was the Fashion category, which mainly consisted of items marketed toward women. However, as of 2023, the Entertainment & Hobbies category has grown by 17%, taking the top spot with items such as books, games, and toys. Lifestyle changes triggered by the pandemic increased the popularity of those kinds of items that are primarily intended for indoor use. This trend has continued since. A diverse lineup of items from all categories 21 Mercari’s Strengths: Fun & Engaging for All Buying is like a treasure hunt
  19.    In 2013, the top-selling brand on Mercari was Chanel.

    Fast-forward to 2022, and this has been replaced by UNIQLO. We believe the reason for this is that in 2013, our users were not in the habit of easily selling personal items. Instead, our users tended to select high-priced brands that did not lose their value easily, even if the items were slightly old. However, more recently, the behavior of using our marketplace as a way to easily sell items that are no longer needed has taken root1. As a result, the number of transactions involving brands used in everyday life has increased. What’s more, in 2013, our top-ranking apparel brands included Babydoll, Hysteric Mini, and Ingni. However, in 2022, Nike, GU, and Zara were among the top sellers. In 2013, brands for children and young women were popular, but more recently there are more transactions involving brands that are not exclusive to any particular generation or gender. 22 Mercari’s Strengths: Fun & Engaging for All Brands used in daily life and not exclusive to any age or gender rank among our top sellers 1. “Consumption Behavior Among Users and Non-Users of Marketplace Apps in 2019” Consumer Survey (September 2019) https://about.mercari.com/press/news/articles/20190425_consumersurvey/
  20.    Maintaining a customer service system Mercari’s customer service system

    operates all day, every day, ensuring users can enjoy a safe and secure experience. Mercari monitors listings/transactions both manually and with automated detection systems to identify items that violate terms of use, making every effort to promptly remove any counterfeit/stolen goods. These systems are based on copius data from item information and transactions as well as AI technology. We strive to improve their accuracy and expand their scope in an effort to create a secure environment for users. 365-day/ 24-hour support お問い合わせ 23 Mercari’s Strengths: Safe & Secure Detecting violations with AI Mercari employs AI technology to automatically detect transactions that violate the terms of use. By combining this technology with extensive transaction data and item information data, the company aims to improve the accuracy of the detection systems and use them for a wider range of applications to provide an even safer and more secure environment for all users. 2. Calculate violation scores 1. Item listed 3. CS checks reported items Listings violating terms of use →will be deleted Normal listings →will be unhidden Examples of items that violate terms of use: gaming accounts, counterfeit items, medicine, etc. ×
  21.    Mercari’s Strengths: Safe & Secure Cooperating with authorities Mercari

    strives to provide a safe and secure service for all users by cooperating with public institutions and law enforcement. The aim is to work towards making not just Mercari, but the industry as a whole safer and more secure by participating in organizations such as the Council for Intellectual Property Protection (CIPP), EC Business Association, Japan Cybercrime Control Center (JC3), and the National Shoplifting Prevention Organization (NSPO). The company also takes a proactive role in exchanging opinions and drawing up guidelines. 24 Inquiries & information Responses & reports Removes Arrests Criminals Law enforcement/ Public institutions Mercari provides several identity authentication services, such as phone number authentication and 3D Secure 2.0 authentication, to create a safe and secure marketplace. In April 2023, Mercari implemented a password-less biometric feature called Passkey to enhance security and convenience through the use of FIDO authentication. In January 2024, Mercari expanded the use of the Passkey biometric feature to include the sign-in process for all services. Enabling biometric sign-in
  22.    Mercari’s Strengths: Safe & Secure Inhibiting fraud by enhancing

    identity verification Users are required to provide user information (full name/date of birth) when registering for a new Mercari account. A user’s sales balance cannot be withdrawn if the name registered does not match the name of the bank account for the balance transfer; this prevents fraudulent listings, such as stolen goods.   Compensation If a product arrives damaged or defective, we offer returns and compensation. Eligible items include unintentionally purchased counterfeit goods, items with a defect or damage not included in the description, and shipping fees for when an accident occurs with Mercari Shipping. Mercari strives to ensure legitimate items are safely delivered to the buyer, but in the event that a user purchases counterfeit or defective goods, they are also eligible for a return or compensation. Awareness activities for adolescents and educators We hold educational activities across the country for middle school and high school students, as well as parents and teaching staff, where we teach them how to avoid trouble on marketplace apps, to ensure they can use Mercari with a sense of security. 25
  23.    Mercari responds to requests to delete items that infringe

    IP rights as stipulated by the Provider Liability Limitation Act, but this program simplifies and speeds up this process for rights holders. By entering the program, not only are rights holders able to cut down on the time spent on submitting documents every time they file a claim, but the time to complete their takedown request is also shortened. 26 Intellectual Property (IP) Protection Program Recalled Items Program Mercari’s Recalled Items Program aims to deliver information issued by manufacturers/importers about product recalls and similar product safety issues directly to Mercari users who own the products in question (users who have listed or bought the item on Mercari). We believe that identifying those who own affected products and ensuring they receive the safety information they need will increase the percentage of items successfully returned to the manufacturer, help prevent accidents, and contribute to manufacturer/importer product safety initiatives. Mercari’s Strengths: Safe & Secure Safe Appraisal With Mercari’s Safe Appraisal service, after the lister ships an item, it first goes to the authentication service. After the authentication service determines that the item meets the authentication criteria they have defined, the service ships the item to the buyer. However, if the item does not meet the authentication criteria and cannot be appraised as authentic, the transaction is canceled automatically, and the purchase price of the item and the authentication fees are refunded to the buyer. The result is a partnership that allows users to purchase items safely and securely.
  24.    Future Growth 27 Large potential interest in listing 36.1

    million People who want to list but haven’t done so yet* 22.8 million Mercari MAU Would like to list if Mercari improved some of its features, or if listing was easier - Want to list items - Would like to list items someday Total number of listings While the total number of listings is growing steadily, we estimate that there are 36.1 million people who want to list items but haven’t done so yet. 1. Based on a survey conducted in April 2021 that polled 9,189 men and women aged 18 to 74. Survey contractor: Macromill  Lister prospects recognize Mercari and intend to list items, but have not listed anything yet; the survey does not take into consideration app DL or buying experience. 2. Some lister prospects are included in MAU.   3 billion November 27, 2022 Million items
  25.    28 1. As of April 2024 Future Business Development:

    Crossborder Expansion Crossborder sales began in 2019, promoting the creation of a circular economy that includes overseas users In collaboration with 60 crossborder e-commerce companies, items listed on Mercari are currently being purchased by users from over 110 countries and regions worldwide1. Anime and idol merchandise dominate the top three transaction categories, with C2C transactions enabling overseas users to purchase merchandise of their favorite character or celebrity. Mercari offers select pages of its website in English, Traditional Chinese, and Korean for overseas buyers accessing Mercari through crossborder services.
  26.    29 Target marketing Encourage visits to shops Analyze data

    Develop/sell solutions • Purchase data • Preference data (searches, views, likes, etc.) • Behavior data (location, shipping, buying) • Item trend data Integration Secondary distribution data Primary distribution data Future Business Development: Data Integration Creating new business opportunities by integrating primary distribution and secondary distribution Mercari aims to integrate secondary distribution data with the item data and customer data held by primary distribution companies, using it to visualize the secondary distribution process and other aspects of the item life cycle and customer journey. By doing so, Mercari and its partners will aim to engage customers in the primary distribution market and create new buying experiences and customer experiences, with corporate marketing, product planning, new solution development, and more. 
 In using data, Mercari will be careful with personal information and utilize data only with user consent.
  27.    Under a concept of “sell with ease,” Mercari Shops

    is an e-commerce platform that allows users to establish their own online shop using just a smartphone and sell their products directly to consumers as a business. The platform was fully launched in October 2021. 30 What Is Mercari Shops?
  28.    Issue 1 Opening an online shop is difficult without

    tech knowledge or experience Common issues faced by business owners starting online shops Issue 2 Many business owners find that even if they open an online shop, their products don’t sell With Mercari Shops, we leverage our strengths in the C2C marketplace business to solve common issues faced by business owners when opening online shops Easy Sell Utilizing Mercari’s Strengths to Solve Barriers to Online Sales Provides easy-to-use online store management with familiar Mercari UX Provides the opportunity to sell directly to Mercari's 23.0 million MAU, removing the need to gather customers 31
  29.    Mercari Shops’ Strengths 32 1. From an internet survey

    by Appliv TOPICS (https;//mag.app-liv.jp/archive/142044) 2. From RAGTAG on Mercari Shops Magazine (https://shops.mercari.com/magazine/posts/50047) No monthly or entry fees Large user base of over 22M monthly users Distinct user demographics compared to other malls Features tailored to businesses Mercari Shops uses a simple system where the only cost to shops is a fee when an item sells (10% of the item price). With no fixed costs, it’s easy for anyone to get started. Open an online store on Mercari Shops to sell your items on Mercari and reach approximately 22M monthly users without any advertising costs! Mercari Shops now supports crossborder sales, too. Besides listing items in just three steps, Mercari Shops offers many features not available to C2C Mercari accounts, including centralized inventory management through Next Engine, Cross Mall, and many other ASPs, batch CSV registration, and staff accounts. Large percentages of buyers are women and young demographics1, indicating user demographics distinct from other online malls2. A B2C marketplace where anyone can sell with ease
  30.    34 What Is Merpay? Merpay is a mobile payment

    service operated by Merpay, Inc., that can be used within the Mercari marketplace app. This service enables users to utilize their Mercari sales balance1, funds added to their Merpay balance from a bank account or ATM, or the BNPL (buy now, pay later) Merpay Smart Payments service to pay for purchases at physical stores and online with their smartphone. Merpay supports both iD contactless payments2 and code payments and can be used at JCB merchants across Japan with Mercard, a credit card with a point-back rate that increases based on use of Mercari and Merpay. 1. In order to use Mercari sales balance, users must configure certain settings or use their sales balance to purchase Mercari points. 2. ”iD” is a registered trademark of NTT DOCOMO, INC.
  31.    35 Merpay’s Three Focus Areas Pay for everyday purchases

    all at once the following month Pay over several months at a fixed amount of your choice iD Code Payment Various payment methods available Various services that utilize unique credit based on behavior history such as usage history on Mercari Payment Credit Asset Management Hold your phone over a reader Scan a code Virtual Card Input a card number Borrow when needed and repay flexibly: interest rates fluctuate depending on the borrower's usage of Mercari クレジットカード Lump-Sum Payment Fixed-Amount Payment NEW Merpay Smart Money Merpay Smart Payments Credit Card Service that allows users to buy and sell bitcoin from within Mercari NEW
  32.    Mercari Group’s “Circular Finance” 36 The addition of Merpay

    (money and credit) and Mercoin (cryptoassets) to Mercari’s item lifecycle creates a circular relationship between users’ items, money, and credit, facilitating the growth of “circular finance” that grants users greater freedom and flexibility. It provides users with a valuable, uniquely Mercari experience. Money Payment Credit Crypto- assets Money Sales Listing Aiming to achieve their dreams Bitcoin Money Mercard Transaction History Credit Information Value Circulation Goods
  33.    Number of Merpay Users/Verified Users 1. As of March

    31, 2024, the aggregated number of unique users (excludes users who have deleted their accounts) who had registered for Merpay Electronic Money, set up Virtual Card, applied for Mercard, opened an account for exchanging cryptoassets, or used Merpay QR Code Payments, Online Payments, or Merpay Smart Payments (lump-sum payment or fixed-amount payment), etc. (Million users) 90.8% Identity Verification Rate Million users Million users 37
  34.    Building a Primary-Secondary Distribution Cycle with Mercari and Merpay

    38 Receives sales proceeds/adds money to balance Receives item Mercari Group’s services form a sustainable cycle in which users sell things they no longer need on Mercari (secondary distribution) and use the resulting sales proceeds to shop at physical and online stores (primary distribution) through Merpay. Sells things they no longer need on Mercari Buys new things using Mercari sales balance
  35.    Merpay Smart Payments— A Credit Service Based on “Trust”

 39 Deferred payment is not available to users under the age of 18. Users 18 or 19 years of age have an upper usage limit of 50,000 yen. Fixed-amount payment is not available to users under the age of 20. Total usage limit for deferred payments + fixed-amount payments is 500,000 yen. • Smart Payments enables users to pay for purchases later, with the credit limit determined by their Mercari usage history. • The service also allows users to set their own usage limit and check their usage history, so they can manage their payments themselves. • Smart Payments provides flexible deferred payment/fixed-amount payment options, allowing users to adjust repayment amount at any time.
  36.    40 We measure “trust” based not on who people

    are, but on what they have done. We determine whether a user will uphold their promise to repay based on their unique transaction data from Mercari. In this way, we can build trust, creating a new form of credit for the user. Merpay’s Definition of "Trust" Length of employment Address Income Occupation Family structure
  37.    Visualization of Usage Status and Flexible Payment Methods Displays

    the amount of time until repayment is complete, as well as the monthly payment amount and fees Enables flexible payments + Can use Mercari sales balance + Can pay whenever you want + Can adjust the payment amount after purchase Visualizes usage status Allows users to create a payment schedule that reasonably fits with their lifestyle 41
  38.    42 • In August 2021, we launched Merpay Smart

    Money, a small-sum loan service that Mercari users can apply for within the Mercari app and that utilizes Mercari usage history to determine a user’s interest rate and borrowing limit • The service focuses on not only providing appropriate credit, but making that credit balance easy to repay, allowing users to repay using their Mercari points/sales balance and change their monthly repayment day, repayment amount, and other repayment plan details within the app Maximum borrowing limit is 500,000 yen. Interest rate and borrowing limit are determined through a screening process based on the user’s Mercari usage history. Not available to users less than 20 years of age or over 70 years of age. Merpay Smart Money—Small-Sum Loan Based on Mercari Usage Fluctuation Interest Borrowing limit
  39.    43 Significantly Increasing Stores Supporting Merpay Payment In November

    2022, we began issuing the Mercard credit card. In less than a year and a half from the date when all users became eligible to apply, we issued more than 3 million1 cards. Mercard allows users to make purchases at approximately 46 million JCB merchants worldwide2, on top of the stores that support code payments and iD payments. Code payment iD payment Mercard 1. Number of cards issued as of March 2024 (approx. one year and four months starting from December 2022, the month of the full release of the service) 2. Number of JCB merchants as of the end of September 2023. Mercard is a credit card shopping service. More than 3M cards issued in less than one and a half years
  40.    Flexibly choose the timing and method of your payments

    44 The Four Pillars of Mercard Complete the Mercard application from the Mercari app in as little as one minute Point 1 Visualize and manage your Mercard usage right from the Mercari app Point 2 Point 3 Benefit from a unique credit system that doesn’t rely only on conventional factors like age and occupation Point 4 Verified users 15.84 million (As of Mar. 31, 2024)
  41.    45 Constant Point-Back Rewards System With Mercard In addition

    to the launch of Mercard, we have started offering point-back rewards to Mercard and Merpay Smart Payments deferred payment users. Using these services, users receive 1% back for purchases made at stores and a maximum of 4% for purchases made on Mercari. The point-back rate for purchases made on Mercari can be increased not just by making payments at stores, but by buying and selling items on Mercari.
  42.    46 Creating a marketplace where people can easily exchange

    value in all its forms Mercoin, Inc. was established on April 28, 2021, with the goal of planning and developing services related to cryptoassets and blockchain technologies. On June 17, 2022, Mercoin completed registration as a cryptocurrency exchange in accordance with the Payment Services Act. On March 9, 2023, we released a service enabling bitcoin transactions using the regular Mercari app, enabling users to convert items they no longer need into future assets. One year following the full release of the service (March 16, 2023), the number of users surpassed 2 million. We also launched a feature enabling users to make purchases on Mercari using bitcoin in February 2024. Mercari has also started work on blockchain technologies, which present new opportunities for individuals to exchange value. The company wants to redefine what it means to buy and sell, enabling anyone and everyone to easily exchange value in all its forms—not only as belongings and money, but services and digital content like non-fungible tokens (NFTs). *The number of people who have opened an account to buy and sell bitcoin on Mercari Mercoin
  43. Three strengths of our easy-to-use-for-anyone platform • Apply on the

    Mercari app in as little as 30 seconds • All prices listed in JPY, with trades starting from 1 JPY • Service exclusively offers bitcoin trading Bitcoin Trading Now Available on Mercari Marketplace App In March 2023, we launched bitcoin trading on Mercari 47
  44.    48 New Uses for Sales Balance & Points Source:

    Mercoin survey on cryptoassets (February 2023) Reasons for not holding cryptoassets Responses from 1,227 people who do not hold cryptoassets Note: Respondents were able to select multiple answers 36.9% 30.5% 26.6% 1 2 3 Low stress and easy to start! It seems like a way to lose money I find it to be intimidating I don’t have the money to buy in
  45.    49 Surpassed 2M Accounts Roughly One Year After Service

    Launch, Making Bitcoin More Familiar to Mercari Users 83% of account holders had no prior experience trading cryptoassets Results of user survey conducted during bitcoin trading service application process (as of March 31, 2024) Mar 2023 Oct 2023 Mar 2024 2.02M accounts 1M accounts 100K accounts Mercari bitcoin trading is the first choice of first-time users
  46.    Expanding the Number of Cryptoasset Users With Industry-Leading Momentum

    No. 1 Cryptoasset exchange service chosen by first-time users in 20232 Feb. 2023 Feb. 2024 User satisfaction rankings by category2 Easiest to start using: No. 1 Easiest to use app: No. 1 Industrywide, the number of new accounts increased by 2.90M Industrywide1 Approx. 9.52M (as of February 28, 2024) Mercoin Approx. 63% Industrywide: Approx. 6.62M (as of February 28, 2023) Comprising over 60% of new cryptoasset accounts for the entire industry 1. Industrywide: From Japan Virtual and Crypto assets Exchange Association, “Monthly Cryptoasset Transaction Data” (https://jvcea.or.jp/about/statistics/) 2. Excerpts from the results of Mobile Marketing Data Labo research on cryptoassets (cryptocurrency) published in 2023 (https://mmdlabo.jp/investigation/detail_2297.html) 6.50M 9.50M 7.50M 8.50M 50
  47.    New Circulation Born from Connecting Cryptoassets to Mercari Users

    who bought bitcoin with their sales balance 50%1 Users who bought things on Mercari after selling their bitcoin 51%2 1. Percentage of users who have sold an item on Mercari within 3 months prior to opening their cryptoasset account and who also have Merpay balance at the time of opening their cryptoasset account (as of March 31, 2024) 2. Percentage of users who sold their bitcoin on Mercari’s trading service and subsequently used those earnings to make a purchase on Mercari (as of March 31, 2024) 3. First categories for which the buyer bought an item after first selling bitcoin using the bitcoin trading service (from October 23, 2023, to December 5, 2023) Toys & Hobbies 25% Entertainment 14% Women’s Fashion 11% Men’s Fashion 11% Entertainment & Hobbies 28% Women’s Fashion 18% Men’s Fashion 16% Reference: Listing Share by Category (2023) Items users bought after selling bitcoin3 51
  48.    Using Bitcoin to Expand the Shopping Experience Start right

    from the Mercari app Turn your sales proceeds into bitcoin Return the bitcoin to your balance to buy items you want Increasing bitcoin holders Increasing bitcoin users 52
  49.    Launched Bitcoin Payment on Mercari (Feb 2024) Choose an

    item on Mercari and go to check out Select “Use Bitcoin” Choose how much to use Confirm purchase details Purchase the item 54
  50.    Accelerating the Experience of Shopping Using Bitcoin In the

    first month after bitcoin payment on Mercari was rolled out to all users, the feature reached 100K payments 55
  51.    57 A service within the Mercari app that’s “quick

    and easy for anyone” Mercari Hallo is a “quick and easy for anyone” on-demand work service enabling Mercari’s 23 million monthly users to find work right from the Mercari app. The service launched on March 6, 2024, and initially featured job listings from work locations in Tokyo and the three surrounding prefectures. We announced the nationwide expansion of the service on April 16, and are rolling out job listings from 50,000 partner locations across the country. Starting with the circulation of items through the Mercari marketplace app, Mercari has expanded the types of value circulated to include money, credit, and cryptoassets. With the addition of the on-demand work service Mercari Hallo, this circulation now includes time and skills as well. On-Demand Work Service Mercari Hallo
  52.    58 「メルカリ ハロ」3つの特徴 Service Concept “Not for me” ”These

    services are aimed at students; I don’t think I’ll find jobs that suit me” “Looks difficult” ”Finding and working shifts seems difficult, and signing up seems like a lot of work” “Seems intimidating” ”I don’t know if I can set aside enough time to work; I’m not comfortable with working through on-demand labor services” For anyone Find work right from Mercari, used by over 23 million people of all ages and genders Quick Apply using your information registered on Mercari, with no need to submit a resume or undergo an interview Easy Discover work as easily as shopping on Mercari; work shifts as short as one hour at a time that fits your schedule 58
  53.    59 Reached 2.5 Million Registrations in First Month According

    to the Japan Spot Work Association, the number of users registered for on-demand labor services increased by 5.1 million in one year from March 2023 to March 2024. This number does not include Mercari Hallo, as Mercari joined the Japan Spot Work Association in April 2024. Compared to this, the number of registrations on Mercari Hallo reached 2.5 million in only one month, contributing to the expansion of the on-demand labor market. Mercari Hallo reached 2.5M Note: The cumulative number of registered users who have agreed to the terms of service for the on-demand work service Mercari Hallo (as of April 5) The number of users registered for on-demand labor services has increased by 5.1 million in the past year1 1. Mercari Hallo not included, as Mercari joined the Japan Spot Work Association in April 2024. Number of users registered for on-demand labor services Monthly registration numbers for the industry and Mercari Hallo Registered users increasing at a pace of more than 5x that of the market as a whole Approx. 9.90M Approx. 15M As of May 31, 2023 As of March 31, 2024 Approx. +4.30M (430K per month) Approx. 430K per month Approx. 2.5M per month On-demand labor industry Mercari Hallo registrations in its first month
  54.    60 Over 60% of Crew are New to On-Demand

    Work 62% of crew reported that Mercari Hallo was their first experience using an on-demand labor service, indicating results in line with the service concept of “quick and easy for anyone.” Additionally, approximately half (45%) of crew were repeat users who had used Mercari Hallo at least twice. Over 60% of crew said Mercari Hallo was their first experience with on-demand labor Results of a survey targeting crew who worked shifts in March (n=330) Survey target: Mercari Hallo users who worked shifts in March Survey period: March 6, 2024–March 31, 2024 Method: Mercari app survey Number of respondents: 330 people Crew who worked shifts through Mercari Hallo Crew using on-demand work for the first time 62% Approximately half of crew are repeat users of Mercari Hallo Source: As of April 6, 2024, data regarding Mercari Hallo users who worked shifts between March 6, 2024, and April 6, 2024 Crew who worked shifts through Mercari Hallo Crew who worked 2 or more shifts 45%
  55.    61 Used by a Wide Range of Ages; 1

    in 3 Mercari Hallo Users Register in Order to Earn Side Income While the general perception of the on-demand labor market is that it is aimed at young people and/or students, Mercari Hallo users cover a wide age range, from 20s to 50s and over. More than one-third of registered users are office workers or employees of non-governmental/non-profit organizations. Used by a wide range of ages Source: As of April 6, 2024 Mercari Hallo users 20s 30.1% 10s 6.6% 30s 24.8% 40s 20.8% 50s and over 17.1% Over 30% of registered users are office workers or employees of non-governmental/non-profit organizations Mercari Hallo users 34% Working adults Source: As of April 6, 2024
  56.    Accelerating the Circulation of Value with Time and Skills

    + Wages (time/skills) Sales balance Money added Credit Points Cryptoassets Code payments Online payments Mercard Buying on Mercari Buying bitcoin Annual GMV: 1T JPY MAU: 23M 62
  57.    Mercari US Got stuff you don’t use? Sell or

    buy almost anything from home. 64 Your Marketplace Mercari’s mission is to “create value in a global marketplace where anyone can buy & sell,” and the year after our founding, we began to expand overseas. We started our business in the US in April 2014, and we adapted our branding, improved our UI/UX, and created a delivery network to match local preferences and the characteristics of the US market. We recognize that succeeding in the US, with its enormous and diverse population, is an important milestone to achieving our mission, so that is where we are devoting our energy.
  58.    Looking Back on the US Business 65 Oct 2016

    Expanded beyond beta version (began charging 10% sales fee) 2014 Sep 2014 Released US app beta version 2016 Mar 2018 Rebranded Mercari US Redesigned app Jan 2014 Launched Mercari, Inc. Opened San Francisco office 2017 2018 2019 2020 Jun 2017 John Lagerling joined Jun 2020 Reached 100M USD GMV in Q4 May 2018 Opened Palo Alto office in the heart of Silicon Valley Nov 2018 Launched Mercari Pack and Ship Jul 2021 Launched nationwide delivery partnership with Uber 2021 Jun 2021 Achieved first profitable quarter in Q4 Sep 2021 Launched deferred payment (BNPL) service with Zip 2023 Apr 2023 Launched Merchat AI, a new shopping assistant powered by ChatGPT 2024 Mar 2024 Became the first major marketplace in the US with no selling fees
  59.    US Business in Numbers Million USD Million users 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 month GMV1/MAU2 YoY -2% YoY -9% (Million users) (Million USD) 66
  60.    Positioning 67 Local pickup only Ship only Cross-category Category-specific

    • Aiming to be the easiest and safest cross-category C2C marketplace by providing a variety of shipping options in addition to continuing to pursue ease of use toward establishing a unique position in the US market Existing shipping options Enhanced local shipping
  61.    Service Optimization 68 Optimizing the Experience for US Users

    We improved the UI and UX of Mercari US to reflect the needs and preferences of our US users. In March 2018, we rebranded, including a logo change, to more effectively build brand recognition in the US. In November 2018, we released Mercari Pack & Ship, a service where users can bring the items they’ve sold to a UPS Store® and have the staff pack and ship them. In July 2021, we launched the same-day door-to-door delivery service Mercari Local nationwide through a partnership with Uber. We also added large furniture to Mercari Local's category offerings starting June 2022. This was done in partnership with Dolly, a logistics company that offers an app where users can order short-distance transportation of large items.1 1. Launched a pre-release stage with service availability limited to five states
  62.    Future Business Development 69 • 42% of Gen Z

    consumers prefer secondhand as their primary shopping method, which is far higher than any other generation1 • The percentage of Gen Z users who use major reuse sites is lower compared to users of other generations, so we will aim to acquire more users through a UX that focuses more on Gen Z Promote hassle-free selling, such as features to list multiple items at once Ease of use Aim to increase transaction frequency by building interest-based communities where users can interact based on their interests Community feature Proof of concept of face-to-face transactions Launched a proof of concept of a face-to-face transaction feature, which enables users to save on shipping costs and payment fees, in certain areas of Los Angeles, in response to the strong demand for face-to-face transactions in the US Medium-Term Objective: Engage Gen Z to establish recognition and reputation as "the easiest and safest selling app” 1. Source: Mercari US, “Mercari 2023 Reuse Report”
  63.      Company with Three Committees Board of Directors 71 Yamada

    Koizumi Shinoda Watanabe Kitagawa Eda Tochinoki Toyama Fukushima Executive Officers Yamada Aoyagi Eda Kawano John Tamonoki Tsunoda Governance Structure Decides on important business execution matters Chair Four directors Six indep. Outside Directors • Majority indep. Outside Directors • Three female directors (30%) Chair Chair Chair Nomination Committee Compensation Committee Audit Committee Decides on candidate for directors Decides on executive compensation Performs audits Execution Supervision Toyama Toyama Kitagawa Shinoda Shinoda Watanabe Yamada Yamada Fukushima Tsunoda Tochinoki At the 11th Annual General Meeting of Shareholders held on September 28, 2023, Mercari approved a revision of the company’s Articles of Incorporation, thereby transitioning to a Company with Three Committees. By separating the supervisory and executive functions of the company to clarify their roles, we have built a structure that supports the timely and resolute decision-making as well as assertive and sound risk-taking of our executive function, while strengthening the supervisory function of the Board of Directors. New Structure Transition from a company with company auditors to a Company with Three Committees
  64.    Leadership After graduating from Waseda University, Shintaro Yamada established

    Unoh Inc., where he launched various internet services including "Movie Life," "Photozou," and "Machitsuku!". In 2010, he sold Unoh to Zynga. After leaving Zynga in 2012, he went on a trip around the world. In February 2013, he established Mercari, Inc. He also established the YAMADA Shintaro D&I Foundation in July 2021. Shintaro Yamada Profile Aug 2001 Feb 2005 Sep 2010 Feb 2013 Mar 2014 Sep 2015 Nov 2015 Apr 2016 Apr 2017 Sep 2019 Sep 2023 Unoh Ltd Representative Director Unoh Ltd renamed to Unoh Inc. Zynga Japan K.K. General Manager (due to acquisition) Kouzoh, Inc. (currently Mercari, Inc.) Founder and CEO Mercari, Inc. Director (current position) Souzoh, Inc. (old) Director Mercari Europe Ltd Director Merpay Ltd Director CEO Representative Director, President, Chief Executive Officer Director, Representative Executive Officer and CEO (current position) Director, Representative Executive Officer and CEO 72
  65.    After graduating from Waseda University, Fumiaki Koizumi joined Daiwa

    Securities SMBC, where he managed the IPOs of tech companies including mixi, Inc. and DeNA Co., Ltd. In 2006, he joined mixi, Inc. as Director, Executive Officer, and CFO, and supervised the Corporate Division. After leaving mixi in 2012, Koizumi supported a number of startup companies. In December 2013, he joined Mercari, Inc., where he assumed the role of Director in March 2014. He was appointed as President & COO in April 2017, and as Director, President in September 2019. He also assumed the role of CEO of Kashima Antlers F.C. Co., Ltd. in August 2019. Fumiaki Koizumi Profile Apr 2003 Dec 2006 Jun 2008 Jun 2012 Jul 2012 Dec 2013 Dec 2013 Mar 2014 Sep 2015 Apr 2017 Aug 2019 Sep 2019 Director, President / President of Kashima Antlers F.C. Co., Ltd. Joined Daiwa Securities SMBC Co. Ltd. (currently Daiwa Securities Capital Markets Co. Ltd.) Joined mixi, Inc. mixi, Inc. Director FreakOut, Inc. Outside Corporate Auditor RAKSUL INC. Outside Corporate Auditor trippiece Outside Director Joined Mercari, Inc. Mercari Director, Corporate Division Souzoh, Inc. Director Mercari COO; Director, Corporate Division Chief Executive Officer of Kashima Antlers F.C. Co., Ltd. (current position) Director, Chairperson 73 Leadership
  66.    74 Leadership (Executive Officer) Sayaka completed her pre-doctoral course

    (master’s degree) at the Graduate School of Science and Engineering from Keio University Graduate School. In April 2006, she joined Goldman Sachs Japan Co., Ltd. After joining the company, she was engaged in investment/loan projects that utilize their own funds, etc., and was appointed as a Managing Director at the same company in 2017 based on her extensive financial knowledge outside of corporate finance. Outside of her work, she also serves as the Co-Chair of the Japan Women’s Network and leads the promotion of D&I. Sayaka joined Mercari, Inc. as CFO in January 2021. In January 2023, she assumed the position of Senior Vice President of Corporate and CFO. She has been in her current position of Director, Executive Officer, Senior Vice President of Corporate, CFO since September 2023. Sayaka Eda Profile Apr 2006 2017 Jan 2021 July 2022 Jan 2023 Sep 2023 Director, Executive Officer, Senior Vice President of Corporate, and Chief Financial Officer / Director of Merpay, Inc. Joined Goldman Sachs Japan Co., Ltd. Appointed Managing Director at Goldman Sachs Japan Co., Ltd. Joined Mercari Group as Chief Financial Officer/CFO of Merpay, Inc. Appointed VP of Corporate and CFO of Merpay, Inc. Appointed SVP of Corporate and CFO Director, Executive Officer, Senior Vice President of Corporate, and Chief Financial Officer / Director of Merpay, Inc. (current position)
  67.    Leadership (Executive Officer) John Lagerling holds a masters from

    the Stockholm School of Economics and conducted his master’s thesis research at the University of Tokyo, Graduate School of Economics. After spending seven years at Google in various leadership positions, including Director of Android Global Partnerships, in 2014 he assumed the position as Vice President of Facebook, Inc., where he headed global business development, mobile partnerships, and other business partnership initiatives. Lagerling joined Mercari, Inc. as Executive Officer and Chief Business Officer in June 2017. He assumed the role of Senior Vice President of Global Strategy in addition to his position as CEO of Mercari, Inc. (US) in January 2022, and assumed his current position in September 2023. John Lagerling 
 Profile May 2002 Nov 2006 May 2009 May 2010 May 2014 Oct 2014 May 2016 Jun 2017 Jul 2017 Sep 2017 Sep 2020 Jan 2022 Sep 2023 Executive Officer, Senior Vice President of Global Strategy / Chief Executive Officer of Mercari, Inc. (US) Joined NTT Docomo Inc. Google, Inc., Strategic Partner Development Manager, Head of Mobile Business and Product, Japan & Asia-Pacific AdMob, Vice President and General Manager for Japan and Korea Google, Inc. Senior Director Android Global Partnerships Facebook, Inc. VP Business Development, Mobile and Product Partnerships Cronologics Corporation Co-Founder and Board Member Modern Times Group MTG AB Non Executive Board Member Mercari, Inc. CBO Digital Domain 3.0 Non Executive Board Member Mercari, Inc. CBO; Mercari, Inc. (US) CEO Senior Vice President, Mercari, Inc. (US) CEO Senior Vice President of Global Strategy / CEO of Mercari, Inc. (US) Executive Officer, Senior Vice President of Global Strategy / Chief Executive Officer of Mercari, Inc. (US) (current position) 75
  68.    Masato completed his master’s in the Graduate School of

    Interdisciplinary Information Studies at the University of Tokyo in 2004. After working at NTT Docomo, he began working as the Head of Partner Sales in the Enterprise Division at Google Japan in 2008. In 2014, he became the Head of Business Development and Sales at Square Japan, and in 2016, he became the Head of Apple Pay Merchant Business at Apple Japan. He joined Merpay as Chief Business Officer in April 2018, where he oversaw general business operations, such as credit design and merchant development. He was appointed Representative Director, Chief Executive Officer of Merpay in January 2022; Vice President, Chief Executive Officer (Fintech) in July 2022; and Mercari Vice President, Chief Executive Officer (Marketplace) in November 2023. In January 2024, he assumed the positions of Mercari Executive Officer, Senior Vice President of Japan Region and Chief Executive Officer (Marketplace). Profile Apr 2004 Nov 2008 Jul 2014 Jan 2016 Apr 2018 Jan 2022 Jul 2022 Nov 2023 Jan 2024 Joined NTT Docomo Inc. Joined Google Japan Inc. as Head of Partner Sales Joined Square K. K. as Head of Business Development and Sales Joined Apple Japan, Inc. as Head of Apple Pay Merchant Business Joined Mercari as Chief Business Officer of Merpay, Inc. Appointed Representative Director, Chief Executive Officer of Merpay, Inc. Appointed Vice President, Chief Executive Officer (Fintech) of Mercari, Inc. / Director of Mercoin, Inc. Appointed Vice President, Chief Executive Officer (Marketplace) and Chief Executive Officer (Fintech) of Mercari, Inc. / Representative Director and CEO of Merpay, Inc. / Director of Mercoin, Inc. / Director of Souzoh, Inc. Appointed Executive Officer, Senior Vice President of Japan Region / Chief Executive Officer (Marketplace) / Director of Merpay, Inc. / Director of Mercoin, Inc. / Director of Souzoh, Inc. (current position) 76 Masato Yamamoto Executive Officer, Senior Vice President of Japan Region / Chief Executive Officer (Marketplace) / Director of Merpay, Inc. / Director of Mercoin, Inc. / Director of Souzoh, Inc. Leadership (Executive Officer)
  69.    77 Leadership (Executive Officer) After working in a joint

    investment fund between Livedoor's investment bank division, Goldman Sachs Securities, and SBI Holdings, Shuji Kawano joined Industrial Growth Platform, Inc. (IGPI), a strategy consulting company. After that, he started his own business. He was also head of Gunosy’s Management Strategy Office when the company listed. He joined Mercari in July 2018. In October 2019, he was appointed Vice President of Strategy, and became Senior Vice President of Strategy in September 2020. He assumed the role of Senior Vice President of Management Strategy in November 2021, and was appointed to his current role of Executive Officer, Senior Vice President of Management Strategy in September 2023. Shuji Kawano Profile May 2005 Nov 2007 Dec 2008 Oct 2014 July 2018 Oct 2019 Sep 2020 Nov 2021 Sep 2023 Joined livedoor Co., Ltd. Joined SBI Capital Co., Ltd. Joined Industrial Growth Platform, Inc. (IGPI) Joined Gunosy Inc. Joined Mercari, Inc. as Vice President and CEO Office Head Appointed Vice President of Strategy Appointed Senior Vice President of Strategy Appointed Senior Vice President of Management Strategy Executive Officer, Senior Vice President of Management Strategy (current position) Executive Officer, Senior Vice President of Management Strategy
  70.    Mercari has various systems in place to create an

    environment where all employees can feel free to take on Go Bold challenges. Our benefits system, Merci Box, was introduced in February 2016 in order to provide an environment where members can Go Bold to the fullest and give 100% both inside and outside of the office. We also provide a monetary gift to employees who return from childbirth/childcare leave, financial support for fertility treatment, financial support for non-certified daycare, and financial support for children who are ill, as well as life insurance for all employees. In May 2021, we also introduced two related financial support programs on a trial basis: one is financial support for egg freezing, and the other is financial support for early childcare. Extended support for childbirth, childcare, and nursing care leave Paid childcare and caregiving leaves Support for fertility treatments Financial support for daycare for sick children Financial support for non-certified daycare Support in times of need 78 Mercari as a Work Environment
  71.    79 ESG—Materiality Update • Mercari defines our materiality as

    important topics that relate to creating value to contribute to resolving social and environmental issues through our business, and creating the management foundation necessary for continuous growth. In FY2023.6, we updated our materiality. tional and Management Foundations Supporting the Creation of Value (3) Creating a New User Experience Through Technology (4) Building Long-Term Public Trust (2) Creating a World That Circulates All Forms of Value (5) Unleashing the Potential in Diverse Talent Worldwide 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. 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 and money—circulate seamlessly. We utilize data, AI, and other innovative technologies to constantly evolve our products and create new user experiences through the seamless exchange 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 thorough compliance. 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. We will aim to be a company that can continue to grow sustainably by creating an environment in which people from diverse backgrounds all around the world can reach their full potential. Social Impact Circulate all forms of value to unleash the potential in all people MISSON Organizational and Management Foundations Supporting the Creation of Value Business Value Created Through Our Products and Services (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.
  72.    Inclusion & Diversity (I&D) Unconscious Bias Workshop
 80 The

    Unconscious Bias Workshop is mandatory for managers at Mercari. It is designed to help participants understand unconscious bias (unconscious prejudice) and develop a habit of recognizing unconscious bias in daily life, with the ultimate goal of promoting IDI. (Materials available for free online) We entered into a school education partnership with Kamiyama Marugoto Technical High School (tentative name), a private technical high school preparing to open in April 2023, to promote I&D. Through this partnership, we will incorporate Mercari’s D&I expertise into school education. We run Build@Mercari, a software engineer training program to support tech industry minorities such as women, the LGBT+ community, or other people who feel that they are part of an underrepresented group. Partnerships with educational institutions
 Since 2018, Mercari has continued to promote inclusion and diversity (I&D) as an essential element of achieving our mission, aiming to create globally competitive teams that value individual diverse experiences and perspectives. In January 2021, we established the I&D Council, a cross-organization internal committee with CEO Shintaro Yamada as chairperson. In these ways, we work to promote I&D both inside and outside of Mercari Group.
  73.    81 Inclusion & Diversity (I&D) 開示範囲は株式会社メルカリの正社員・契約社員が対象。 At Mercari, we

    have a total of 2,101 working toward a shared mission members  Mercari is home to talented professionals from approx. 50 countries worldwide 80.5 days Percentage of male employees who take childcare leave Average number of days of childcare leave taken by male employees Percentage of employees of foreign nationality 25.7% 25.7% 53.8% Overall Management positions Engineers These numbers continue to grow, especially among our engineering organization Taking action to close the gender pay gap Unexplained pay gap 7% 2.5% Implementation of salary adjustments In order to increase the percentage of female employees, we have defined and are working on KPIs for our hiring, appointment, and promotion candidate pools 32.9% Percentage of female employees Percentage of women in management positions 20.4% 30.0% Percentage of female directors 91.4% Of those members, 26.4% joined through employee referrals We implemented individual salary adjustments to reduce the “unexplained pay gap,” which is the gap not due to differences in things such as role, grade, or job type
  74.    R&D Organization 82 Research for Design Development Deployment Disruption

    Mercari R4D was established by Mercari, Inc. in December 2017 as a research and development organization that aims to implement its findings practically, as part of the world at large. R4D stands for Research and 4 D’s: Development, Design, Deployment, and Disruption. Our goal is to create new value through research and development designed to be deployed in our future society while introducing disruptive ideas and technologies. Under its mission of “pioneering the path toward undiscovered value,” R4D promotes a co-innovation approach to solving complex social issues by leveraging the power of science and technology, and also by going beyond the conventional boundaries of industry, academia, and nationality in order to realize a society where limited resources are circulated and all people can unleash their potential. Value exchange engineering Quantum information technology ELSI HCI AI Mobility Blockchain Communication research Fields of Research/Projects
  75.    Sports Business On July 30, 2019, Mercari announced it

    took control of Kashima Antlers. • Powerful recognition and reputation • J.League’s top-level management and business development • Promotion of digitization Strengthening business base through technology and business management know-how Energizing local economy by leveraging technology • Marketing and business development • Top-notch technology in the industry • Management supporting rapid growth • Strong bond with Kashima Antlers as its hometown • Tourism development leveraging rich resources Promoting DMO1 (community development) by leveraging tourism resources 1. DMO, Destination Management Organization, takes full advantage of local resources and promotes ”profitable” tourism community development with an aim to effectively and efficiently attract customers (as stated in a document prepared by the Japan Tourism Agency) 83
  76.    History Feb Jul Aug Nov 2013 Founded Kouzoh, Inc.

    with a capital of 20M yen Funding: Acquired 50M yen from East Ventures Launched the Mercari marketplace app Funding: Acquired 300M yen from UNITED Renamed company Mercari, Inc. 84 Jan Mar Apr Sep Oct Nov New company: Founded US subsidiary Mercari, Inc. Funding: Acquired 1.45B yen from Global Brain and others New office: Opened the Sendai customer service center Fully launched the Mercari US app Mercari (JP) began to charge sales fees (free→10%) Funding: Acquired 2.36B yen from WiL and others New company: Founded UK subsidiary Mercari Europe Ltd 2014 2015 Mar Apr Sep Relocated the head office (Roppongi Hills) Started the RakuRaku Mercari Shipping delivery service New company: Founded Souzoh, Inc. to manage new businesses within Mercari Group 2016 Feb Mar Apr Oct New initiative: Introduced the benefits system Merci Box Funding: Acquired 8.4B yen from Mitsui & Co. and others Released the community classifieds app Mercari Atte New company: Founded UK subsidiary Merpay Ltd Mercari (US) began to charge sales fees (free→10%) 2017 Feb Mar May Jul Aug Nov Dec New company: Zawatt Inc. became a wholly owned subsidiary New office: Opened the Fukuoka customer support center Released the Mercari UK app Launched marketplace app for books, CDs, and DVDs Mercari Kauru Released live video streaming feature Mercari Channel Launched marketplace app exclusively for brand name items Mercari Maisonz Released immediate purchase service Mercari NOW New company: Founded Merpay, Inc. New organization: Established R4D, a research and development team with the goal of social implementation
  77.    History 85 2018 Feb Mar Apr May Jun Jul

    Oct Dec Launched bike share service Merchari in Fukuoka Rebranded the Mercari US app Closed Mercari Atte Launched skill sharing service teacha Received new listing approval Listed on the Mothers Section of the Tokyo Stock Exchange Closed Mercari Maisonz, Mercari NOW, and teacha Rebranded Mercari, Inc. Dissolved UK subsidiaries Closed Mercari Kauru 2019 Closed the Mercari UK app Began requiring identity verification when signing up Launched the mobile payment service Merpay LINE Pay and Merpay formed a strategic business partnership Dissolved Souzoh, Inc./Merchari succeeded to neuet, Inc. Closed Mercari Channel Kashima Antlers F.C. Co., Ltd. became an owned subsidiary Started cross-border sales to over 100 countries and regions Jan Feb Mar Jul Aug Dec 2020 Merpay entered a basic agreement to acquire all shares of Origami Inc. Mercari, Merpay, and NTT DOCOMO formed a business partnership Began the pre-opening of Mercari Station, Mercari’s first physical shop, in Shinjuku Marui Main Building Established Experts Committee on the Ideal Form of a Marketplace Jan Feb Jun Jul 2021 Announced our Marketplace Principles Established Souzoh, Inc. Established Mercoin, Inc. Launched Mercari Shops on a trial basis Launched a small-sum loan service Merpay Smart Money Mercoin acquired all shares of Basset Inc. Introduced a new work style policy called “Mercari’s New Normal Work Style ‘Your Choice’” Established Merlogi, Inc. Launched full rollout of Mercari Shops Joined forces with the six Pacific League baseball teams and Pacific League Marketing on “Pacific League Exciting Moments β” Collection NFTs Jan Apr Jul Aug Sep Oct Dec
  78.    History 2022 Jan Jun Sep Oct Nov Shifted to

    new management execution structure for Mercari Group and changed responsibilities for members of leadership Changed listing on the Tokyo Stock Exchange from the Growth Market segment to the Prime Market segment Established Mercari Software Technologies India Private Limited in Bengaluru, Republic of India Opened the new office, Mercari Base Tokyo Conducted a large-scale update to the app Completed series A round investing in Beebs Launched the Mercard credit card 2023 Jan Feb Mar May Jun Jul Sep Oct Absorbed Merlogi, Inc. Unveiled a new Group mission on Mercari, Inc.’s 10th anniversary Started offering a service for trading bitcoin Established a team dedicated to generative AI/LLM Established the Recommerce Institute to research the new recommerce market Celebrated the Mercari marketplace app’s 10th anniversary Established our Basic Human Rights policy Published FY2023 Impact Report Announced transition to a Company with Three Committees and changes to executive structure Launched Mercari AI Assistant feature leveraging generative AI/LLM technology 2024 Celebrated Mercari, Inc. (US)’s 10th anniversary Mercari US became first major marketplace in the US with no selling fees Absorbed Souzoh, Inc. Jan Mar Apr 86