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Medium- to long-term goal and growth strategy

2025 managerial goal: Operating profit of 2,500 million yen

GMO Pepabo, Inc. has set the medium- to long-term managerial goal of achieving consolidated operating profit of 2,500 million yen in the fiscal year ending December 31, 2025.

To achieve this medium- to long-term managerial goal, we will leverage the stable, high profitability of the services of the Hosting business (Lolipop! and MuuMuu domain) and the e-commerce support business (Color Me Shop), which mainly apply a recurring revenue model, to invest in the e-commerce support business which is based on a non-recurring revenue model (SUZURI), the handmade products business (minne), the financial support business (FREENANCE) and new businesses, aiming to increase our long-term corporate value.

Market perceptions

The market that each business targets over the medium to long term is as follows. The main target of the hosting business is the internet market including website production. The target of the e-commerce support and handmade products businesses is the e-commerce domain related to product sales, and the target of the financial support business and new businesses is the domain of other support services. Overlapping each other, our businesses are expanding into related markets.

The growth of each business segment

Improving the profitability of growth businesses such as the non-recurring-type business, including new services, while simultaneously facilitating the stable and steady growth of the recurring-type service.

Expanding the Pepabo economic zone over the medium and long term

We will expand Pepabo economic zone by continuing to support creators engaged in creative activities on the internet through the services we provide at GMO Pepabo.

Business expansion in the fiscal year ending December 31, 2022

FY2022 performance summary

We achieved record net sales in 2021. We also expect our businesses to continue growing in 2022.

In 2021, we achieved record net sales thanks to the strong performance of Lolipop! and Color Me Shop. Regarding operating profit, expenses increased because we reinforced our structure to respond to the growth of the business attributed to the stay-at-home demand in 2020. As a result, net sales were 11,800 million yen (up 7.9% year on year) and operating profit was 880 million yen (down 4.2% year on year). We expect growth to continue in 2022, and we have set the targets of net sales of 11,400 million yen and operating profit of 1,140 million yen.

NOTE: At the beginning of the first quarter of the fiscal year ending December 31, 2022, we began applying a new revenue recognition standard. Targets before the application of the new revenue recognition standard are net sales of 13,600 million yen (up 15.1% year on year) and operating profit of 1,130 billion yen (up 27.7% year on year).

Highlight 1:
Growth of Color Me Shop, SUZURI, and minne as EC-related services

Please pay attention to the three EC-related services, which are expected to grow again in the fiscal year ending December 31, 2022. The three EC-related services (Color Me Shop, SUZURI, and minne) have enjoyed rapid growth in their performance due to the significant expansion of stay-at-home demand that began in the second half of 2020.

While the average annual growth rate of e-commerce related to product sales for 2015 to 2020 was 11.1%, the total average annual growth rate of the three EC-related services (Color Me Shop, SUZURI, and minne) has been above the market average. We will continue to implement measures to achieve the growth of our services, including the enhancement of food-related e-commerce in Color Me Shop, the expansion of new domains in the handmade products business, and the addition of items to SUZURI.

Highlight 2:
Enabling the financial support business (FREENANCE) to move into the black

We aim to enable FREENANCE, which began to provide services in October 2018, to move into black in the fiscal year ending December 31, 2022. To date, it has been in the investment phase, but now it has entered the growth and monetization phase.

This business, which financially supports freelancers and sole proprietors, has seen a consecutive increase in the number of API providers, including Lancers and GMO MakeShop. The amount of invoice purchase has also been increasing. Please look forward to the future growth of this business.

For more information about the expansion of our business in the fiscal year ending December 31, 2022, please see the results presentation and update meeting materials.

Corporate value improvement and sustainability

ESG management and the SDGs (sustainability strategy)

GMO Pepabo has identified three material sustainability issues and contribute to ESG management and the SDGs through its business activities.

  • Consideration for the global environment and conservation of it through reduction of environmental impact
    • 目標12.つくる責任、つかう責任
  • Support for people from all walks of life to increase human output
    • 目標4.質の高い教育をみんなに
    • 目標5.ジェンダー平等を実現しよう
    • 目標8.働きがいも経済成長も
    • 目標11.住み続けられるまちづくりを
  • Strengthening governance for sound and transparent corporate management
    • 目標16.平和と公正をすべての人に
    • 目標17.パートナーシップで目標を達成しよう