■Overview of the financial results of Schuppin ＜3179＞

3. Global Expansion

As for cross-border EC, in the camera business until now, in addition to opening stores on the world's largest online marketplace “eBay” with “Map Camera” in 2017/8, in the watch business, “GMT” opened stores on the world's largest luxury watch marketplace “Chrono24” in 2019/5 and “eBay” in 2020/7, respectively, and the overseas sales support service “Buyee” in 2022 “Connect” *1 has been introduced, and a system for business expansion has been steadily put in place. Developments that focus on service quality have been successful, and the company's brand is being widely recognized overseas. In particular, “Map Camera” won “Seller of the Year,” which is given to sellers with top overall evaluations of sales results etc. at the “eBay Japan Awards 2023" *2, for the second year in a row. Through these efforts, cross-border EC sales have been steadily increasing, and the fiscal year ended 2024/3 also expanded to 3,284 million yen, an increase of 29.9% from the previous fiscal year.

*1 Overseas purchase support service operated by BeeCruise Co., Ltd., a consolidated subsidiary of BeeNOS (3328).

*2 This award recognizes Japanese sellers (sellers) who have achieved top sales results etc. on “eBay (eBay)” operated by eBay Japan Co., Ltd.

4. Changes in quarterly results and KPIs

(1) Changes in quarterly results

Looking at the quarterly trend from the fiscal year ending March 31, 2021, there was a big drop in the first quarter of the fiscal year ending March 31, 2021 due to the effects of the COVID-19 pandemic, but EC sales remained strong from the 2nd quarter due to the tailwind due to “nesting demand” and the effects of various measures, and it grew to a level higher than before the COVID-19 pandemic. EC sales steadily expanded as the effects of the COVID-19 pandemic continued in the fiscal year ending 2022/3, and duty-free sales in the “watch business” also contributed greatly due to the expansion of the strategic product lineup, and the fourth quarter hit a record high level (quarterly basis). In the fiscal year ending 2023/3, in addition to duty-free sales being sluggish due to the influence of related policies in China, etc., the “camera business” continued to expand even though the “watch business” fell due to a decline in global price rates, and overall it maintained a high level centered on EC sales. The “camera business” continued to grow even after entering the 2024/3 fiscal year, and the “watch business” was also on a recovery trend, and sales for the 3rd quarter hit a record high level (quarterly basis).

(2) Number of web members

The number of web members at the end of the 2024/3 term surpassed 0.67 million and continues to grow steadily to 670,676 (up 50,683 from the end of the previous fiscal year). The spread of SNS such as Instagram and restrictions on going out due to the COVID-19 pandemic were also triggered, and in addition to the increase in the number of people starting cameras as an affordable and familiar hobby, it is thought that the background is that EC strengthening measures so far have taken off and awareness of the company's brand and management site has increased. Looking at the composition ratio by generation, there is a wide range of age groups, but the ratio of teens to 30s accounts for 40.2%, of which the ratio of women is 23.4%, which is high compared to other ages, making it a new target group※. Also, even as the composition ratio of the younger generation is increasing, the fact that the average usage unit price is maintained can also be said to be a notable trend.

* Of all web members, the ratio of women is 16.8%, but the ratio of women accounts for 21.6% of new subscribers (cumulative total for the 3rd quarter) for the 2024/3 fiscal year.

(3) Number of purchased members and activity rate

The number of purchased members and active rates also continued to be at a high level as the number of new members increased net. The number of products registered on the wish list ※1 and the number of stock notification email registrations ※2 are also growing steadily, and it seems that these one-to-one marketing measures are also factors that maintain the activity rate at a high level. In particular, with regard to arrival notification emails, the number of distributions increased drastically ※2 due to the launch of notification functions not only on emails and apps but also on LINE in 2022/5, and the number of request distributions*3 has also remained steady due to the combination of one-to-one marketing, AIMD, and even AI content recommendations, and these have also contributed greatly to the expansion of transaction opportunities. They are also focusing on expanding content centered on video distribution, and it seems that the acquisition of young viewers, which had not been acquired until now, is progress*4.

*1 The number of new wishlist registrations is on the rise from 7 to 0.08 million per month, hit a record high in March, and is approaching 0.09 million. At the end of the 2024/3 fiscal year, it expanded to 2,278,130 cases (up 299,738 cases from the end of the previous fiscal year).

*2 As for the number of registrations for stock notification emails, it surpassed 140,241 (up 22,218 from the end of the previous fiscal year) and 0.14 million people at the end of the 2024/3 fiscal year, and the average number of monthly distributions exceeded 0.4 million. In particular, the number of distributions on LINE increased 14 times in 2 years.

*3 An average monthly distribution of 5 million has been achieved for smartphones. When combined with the “stock notification email” distribution described above, the number of distributions is 16 million cases per quarter, which creates information transmission power and customer contact points equivalent to about 350 physical stores in terms of the number of visitors to the store.

*4 The “Content Creation Department” was newly established, and multiple people with practical experience in video production were assigned. Going forward, the policy is to focus on the production and distribution of video content.

(4) Used camera purchase price

As for used camera purchase prices, in addition to AI face recognition systems (2020/6) and AIMD (2021/3) so far, EC enhancements such as introducing AI content recommendations (2022/3) have been successful, and the EC purchase ratio has remained at a level close to 80%. Also, preemptive exchanges and trade-in exchanges, which are one of the various differentiating factors, have also been doing well, and it can be said that they are contributing to the rise in EC purchase ratios.

5. Summary for the fiscal year ending 2024/3

Summarizing the 2024/3 fiscal year, I would like to evaluate once again the two points that were affected by system failures for a certain period of time: 1) the “camera business” continued to grow due to the effects of various EC policies, including the use of AI, and the fact that overall business performance was raised, and 2) the “watch business,” which stalled in the second half of the 2023/3 fiscal year, was able to rapidly recover, and record high performance was updated, once again, as demonstrating the strength of the company's business model. In terms of activities, in addition to the fact that they were able to work on upgrading the AIMD version, strengthening online purchase estimates for watches, and expanding content centered on video distribution, etc., leading to improvements in various KPIs, the capital and business alliance with the Sigmaxis Group described later can also be said to be a remarkable material for further stepping up.

(Written by FISCO Visiting Analyst Ikuo Shibata)