It is now time to start the full year financial results announcement of ZOZO for fiscal year 2021 ending in March of 2022. To prevent the spread of COVID-19, we would only be offering live streaming this time. We plan to have the session until 5:35 P.M. After that, on a separate Zoom channel, we will have a Q&A session with institutional investors from 5:50 P.M. Now I'd like to introduce the participants. Representative Director, President and CEO, Kotaro Sawada.
Hello.
Director, Executive Vice President and CFO, Koji Yanagisawa.
Hello.
We will have two presenters today, and first, CFO Yanagisawa will take us through the business results.
Hello, I am Yanagisawa, Director, Executive Vice President and CFO. Now I'd like to walk you through the full year earnings results of FY 2021 ending in March of 2022.
By the way, the presentation document we will be using today has already been uploaded to the IR page of our website, so please take a look. Let's jump right in. Here are the highlights for FY 2021. Let's go to the next page. You see manga again. This is going to be the final episode of this manga, so please enjoy it until the very end of the page. Although this page does not exist in the deck, I'd like to walk you through the highlights of FY 2021. This year our gross merchandise value, GMV, went up by 21.3% year-on-year, landing at JPY 508.8 billion. GMV, excluding other GMV, went up by 13.3% year-on-year, landing at JPY 462.1 billion.
Operating profit was up by 12.5%, landing at JPY 49.6 billion. Operating profit margin was 10.7%, decreasing by 0.1 point year-on-year. Both GMV and OP exceeded the plan, and we were able to finish the year very strongly. We recorded the new highs for both GMV and OP. Next slide, please. This is page 7 of the financial results announcement document. These are the quarterly changes of the business results. In the fourth quarter, GMV, excluding other GMV, was up by 12.7% year-on-year. Unaffected by the changes in the number of COVID-19 infections and the degree of the traffic recovery, the brands continued to proactively provide us with their inventory.
On top of that, our vigorous promotional activities have proven to be fruitful, and as a result, our GMV grew steadily, maintaining more than 10% growth year-on-year. Regarding the operating profit, the cost increased from the same period of the previous fiscal year as we launched TV commercials and web advertisements to attract customers, and we also implemented point-based promotions to promote sales, and we also made donations through the sales of charity T-shirts in support of Ukraine. On the other hand, our gross profit increased thanks to the GMV growth and the advertising business, and we managed to reduce logistics-related costs and payment collection fees as well. These factors drove up the profit by 5.0% year-on-year. Our OPM landed at 9.0%. Next, I'd like to share the details of the business results. This is page 8.
Let's first look at the increase/decrease analysis of the operating profit. OP was JPY 44.14 billion last year, and this year it became JPY 49.65 billion, up by JPY 5.5 billion approximately. Factors attributable to the growth of the OP were, there are mainly 3. First, JPY 10.17 billion from the increase of consignment shop commission coming from GMV growth. JPY 2.17 billion from the sales increase generated by the advertising business. And thirdly, JPY 3.78 billion from the growth of shipping revenue and payment service revenue coming from the GMV increase. On the other hand, factors that drove down the OP were, first, JPY 3.37 billion from the increase in fixed costs impacted by the increase in employees, logistics bases and the outsourcing expenses.
JPY 4.87 billion from the increase in variable costs that rose in correlation to the GMV. JPY 1.77 billion from the increase of promotion expenses associated mainly with the active airing of TV commercial to attract customers. JPY 600 million from other expenses. Next, this is page 9 of the document. Here's the balance sheet. As we have explained before, we acquired treasury stock to meet the criteria for the prime section, and consequently, our cash and deposits saw a decline, and treasury stock saw an increase from last year. There are no major changes aside from that. Next, this is page 10, cash flow trends. Cash flows from operating activities decreased due to increased income taxes paid. That's minus JPY 4.8 billion. Cash flows from financing activities had gains and losses from the purchase and disposal of treasury stock.
Next, this is page 16, quarterly GMV trend. The ratio comprised by other GMV that we started to record from the second quarter of the last fiscal year went up by 2.5 points year-on-year, finishing at 9.6% this quarter. This worked to push down the ratios of other business segments in conjunction with the impact of apparel sales seasonality. The ratio or the share of this has gone up. We don't see major changes overall though, as far as the ratio and share is concerned. Let's go to page 22. This is SG&A trend. In the fourth quarter, we aggressively implemented advertising activities such as TV commercials and web-based media to attract customers, and as a result, the ratio of promotion-related expenses recorded in SG&A became 2.3%. Next, this is page 21.
Let's now look at the OP and OPM changes. In the fourth quarter, as I mentioned, OPM increased with the advertising business growth, although we have spent quite a lot in advertising, and we improved operational efficiency in the distribution centers. This pushed up the OPM. However, as I have mentioned, the promotional costs increased for active recruitment and sales promotion, and donations made with the sales of Support Ukraine T-shirt and bonus payout to the employees took place, and they worked to bring down the OPM by 0.7 points year-on-year. At the end, we landed our OPM at 9.0%. Next. This is page 20. SG&A breakdown for the full year. SG&A against GMV finished at 23.0%, decreasing by 0.5% year-on-year. The ratio decrease is attributed to these main reasons.
One, with the new revenue standard application, point-related expenses recorded as an SG&A expense last year are now deducted from net sales instead. This brought down the point-related expense by 0.5. Second, the efficiency of the logistic base has improved, resulting in a 0.3 point decline of logistic-related expenses under payroll and staff costs. Third, payment collection fee decreased by 0.3 point due to improved economic conditions that came with a payment collection company change related to credit card payments. Fourthly, change of the packing materials improved others by 0.2 point. By the way, we changed our packing materials in the middle of the second quarter of the previous year. Factors that drove up SG&A are TV commercial and web ads to proactively recruit customers and free distribution of ZOZOGLASS.
They resulted in a 0.6-point increase in the advertising expenses. Moving on to page 24 and onward. These are the main KPIs of ZOZOTOWN. These KPIs hereafter do not include the results of PayPay Mall or B2B business. The number of total buyers was up by 310,000 from the previous quarter, amounting to 10.41 million, of which active members was 9.04 million, increasing by 330,000 against the previous quarter. Guest buyers decreased by 10,000, finishing at 1.37 million. As for the increase of the active members, we managed to retain successfully the newly recruited members from last year. Also, the implementation of ZOZO Week in active TV commercial airing of the summer and winter sales to drive traffic turned out to be successful.
In the fourth quarter, not only did we focus on the new member recruitment, but we also implemented promotional initiatives to help prevent customer defection and also drive upsell. As a result, we could grow the number of active members by about 100,000, more than how we did in the previous quarter. Next, this is page 25 of the deck. Number of shops in ZOZOTOWN. As of the end of the fourth quarter, the number of shops was 1,510, a net decrease of six shops from the end of the last quarter. We welcomed 23 shops to our platform this quarter. To name a few, we welcomed a world-renowned luxury cosmetic brand, Givenchy Beauty, and a brand that carries a vast collection of items using naturally derived and local, locally sourced ingredient, THREE.
VT Cosmetics from Korea, which is most known for its popular skincare items. Comme des Garçons Homme that combines timeless modernity and strength in their designs. Next, this is page 30. Concerning the average retail price, it was JPY 3,752, up by 0.1% year-on-year. The slight increase is attributed to the lowered markdown ratio. Next, this is average order value on page 31. Average order value was JPY 7,974, down by 0.2% year-on-year. It's mainly attributed to the slight decline in the number of shipments. This led to a lower average order value compared to the same period of the previous year. Both average order value and average retail price have shrunken, and we believe that this is a positive trend that we are seeing.
That was the result from FY 2021. Next, I'd like to share our business plan for FY 2022 ending in March 2023. This is page 33. The full year consolidated earnings forecast and dividend for the ongoing fiscal year are as follows. We target to increase GMV by 6.9% year-on-year to JPY 543.8 billion. GMV, excluding other GMV, targeted to increase by 7.3% year-on-year to JPY 495.8 billion. Net sales plus 9.1% year-on-year, JPY 181.3 billion. OP targeted to increase by 3.7% year-on-year, JPY 51.5 billion and OPM 10.4%. These are the plan figures that we have.
We will continue to target a payout ratio of 50% or more. We would like to first aim for a 50% level. We plan to pay a dividend of JPY 60 per share. Also, the dividend for fiscal 2021 ending in March 2022 has been raised to JPY 58 per share from the initial plan of JPY 55 per share, thanks to a good performance. We disclose it today, so please have a look. I will explain in detail about this on the next slide. For the ongoing fiscal year, we plan to maintain a double-digit growth in GMV for the combined total of ZOZOTOWN and PayPay Mall business. The departure of United Arrows from our B2B business will hurt the overall growth rate of GMV. We are already seeing it, but this slowdown will be temporary.
In addition, the operating income margin is expected to decrease from the previous fiscal year due to somewhat of an anticipated decline in work efficiency on a logistics basis, an increase in the shipping cost ratio due to a decline in order value, and an increase in system-related investment, mainly coming from the outsourced work. Having said that, the company aims to achieve 3.7% growth in OP. These are the targets on this page by business for this fiscal year. ZOZOTOWN consignment business, we aim for growth equivalent to that of fiscal 2021, excluding the impact of China business that we decided to pull out. As for PayPay Mall, we will continue to make maximum efforts this fiscal year as well, while benefiting from Z Holdings continued investment in sales promotion. We're aiming for 29.
Roughly 29% growth. As mentioned earlier, our B2B business is expected to experience a temporary negative growth from the departure of United Arrows at the end of February 2022. In advertising business, it's JPY 7.2 billion, so we'd like to aim for 14% growth. Let's go to the next slide. Here are the changes in capital investment. A total of JPY 10 billion, approximately, in CapEx is planned for the ongoing fiscal year. The breakdown is as follows. From February 2023, the leasing of the new logistics base will start. So that's JPY 6.5 billion. There's JPY 2.5 billion for the purchase of equipment for existing distribution centers, and JPY 1.0 billion for system and system-related investments. So that's the capital investment that we are planning ahead.
That brings me to the end of my part. I'd like to pass the microphone over to Sawada, our Representative Director, President, and CEO.
Hello, everyone. I'm Sawada. From my side, I'd like to present to you some additional points. One thing that I know you're interested in is that the situation of COVID is starting to settle down, it's coming to an end soon. Amid this environment, as an EC player, as ZOZO, what are the things that we envision for this fiscal year? I believe that that's what you're interested to hear most. As Yanagisawa mentioned, total numbers may seem a bit weak, but for ZOZOTOWN and PayPay Mall, we were able to show you that the growth is going to continue to be strong for these two businesses.
Regardless of whether there's traffic or not, the customers are coming to our platform. We're not really affected so much by that, and it seems like consumer mindset is changing. That's something that I like to call out once again. Here I'm bringing to you some of the figures to prove that, to indicate that. Let's look at the next slide. This is something that we track on a regular basis. In the past two years, we've been watching the changes of the mindset of people. We track the top-of-mind awareness through the survey. When they try to buy a fashion merchandise, what is the first place that comes to mind, is the question that we always ask. This is not just for online players, but also inclusive of offline players as well.
I'm afraid I cannot disclose specific numbers here, but you can see that it's showing a continuous upward trend in the past two years. This indicates the number of those who answered ZOZOTOWN for this question. We believe that the approximate user total user base is 70 million. We've seen an increase by 2.5%, so this is an increase of 1.67 million if you convert it to the size of the population. This 1.67 million is a huge base. We can see that their top-of-mind awareness is really increasing for ZOZO, and this is something that we're confident about. Next, this is the new buyer acquisition. Our GMV. In order for us to grow our GMV, it's really about how we attract new customers. We've been saying that many times already.
It's about the new buyer acquisition that matters. From April, we track the growth rate of the new users. In red, we indicate how we did last year. As you can see, regardless of COVID-19, virtually every month we've been able to have growth. The traffic is recovering starting from the beginning of this year. The sales of real stores is recovering as well for some of the brands. Regardless of this, we have not been impacted so much by that. Of course, our promotional activities were fruitful as well. I, what I can say is that we've been able to steadily grow our new buyer acquisitions. We're also making effort to bring back the traffic to real stores as well. People can go to ZOZOTOWN and ask for layaway in real shops.
Now the stores showing their inventory data saw an increase by two times as far as the number of stores is concerned. It's going very well. I have been saying this from before as well. We are making this a paid service so that we can drive traffic to real stores. We receive a commission of about 12% of the prices of the merchandise. When we made this announcement, one concern was raised. That concern was that maybe the buyers will move away from you. We monitored our data for the past six months, and we discovered that those who use this service will actually visit ZOZOTOWN platform more than the regular users. We see that there's a difference of about 1.3x in terms of the number of visits.
When they come, then naturally, some of them may make a purchase as well. The number of purchases also goes up by 1.1 . This excludes the layaway services and other purchases that they make in real stores. This is in line with what we expected. What we would like to do is to further expand this so that we can further collaborate with physical stores to further enhance the value of fashion infrastructure. Next. Another concern that you might have is this, probably. This is the impact of the raw material costs. In conclusion, the impact of this is quite limited at this time. We might see some negative impact on two fronts. Namely, one is the direct materials cost, and another one is indirect materials, such as cardboard, et cetera.
When there is a price increase, then that gets reported in the news, in the, in the media. But if you look at the situation of ZOZOTOWN, we have not witnessed price increases on our platform, but it's only for the merchandise categories that we handle. What it means is that the prices have not really risen for the users. It hasn't made the users more difficult to buy from our platform. So far, we have not been impacted negatively by the raw material costs, but there could be future impact. But at the moment, there is no definitive effect that we have witnessed. Next. The raw materials costs are rising, and when you look at this trend for apparel, we should also be mindful of SDGs as well. Maybe we're overproducing, and that is oftentimes said in the industry.
We need to be well prepared so that we can support the production in a better way. Here, on the left, you have the comparison of sales between MTS and MTO. MTS is about made to order. We call this MTO, which is made to order, to our brands so that we can help them reduce excessive inventory. We call that MTO, made to order. There was one actual figure that we could draw from this. Between MTO and MTS, let's imagine that the same merchandise was sold under two different systems. If it's MTO, you only have to produce 42,000 pieces to generate JPY 250 million.
For the same merchandise, under MTS, you would produce 34,000 pieces to generate JPY 130 million. If you do a simple math here, if we try to make the same sales by MTS, this is how much discrepancy or gap you will see. If you try to produce under MTS system, you would have to produce 62,000 pieces. On the other hand, if it's under MTO, it would only be 42,000 pieces. There's quite a lot of benefits for this MTO system. We need to further explore opportunities to increase the amount of production under MTO, but this is something that we'd like to take on as a challenge. Next, this is the current situation of ZOZOCOSME. This is the month...
We haven't been able to disclose to you how much GMV we're doing, but the milestone we've had that I've mentioned is that we'd like to do JPY 10 billion with this. We already achieved JPY 5.7 billion in GMV for this fiscal year. After fall, we've been able to have repeaters. The first year anniversary did even more than what we expected. We've been able to create a positive cycle of the users. As we expected from the outset, the cross-selling has been successful. What it means is that those who buy cosmetics has more LTV than those who only buy apparel. The LTV of cosmetic buyers also expanded, and this is AR makeup. Maybe some of you have tried this already.
You can easily virtually try on this lipstick on the screen, and you can easily see how it looks on you. This is not an original menu that we can only provide, but with one tap, one single tap, you can enjoy service like this one. We're very much focused on fashion tech, and this is one of the menus that we bring in to our customers. As I mentioned, we aim to achieve GMV of JPY 10 billion, and we want to be in the tens of billions this fiscal year. I don't think this is going to be the most difficult objective. We believe that by taking on those measures, we'll be able to achieve this.
Of course, I mean, compared to apparel business it's still small, but the players that sell cosmetics is limited right now online, and we believe that this is achievable if we take the right measures. Next. This is WEAR. Making WEAR a commerce site. Finally, we will make this happen. This has been released earlier, and you can have detailed information about that on a separate deck, but we'd like to explore the opportunity for a new type of social commerce. We call this offering C2C. If people are going to post something on WEAR, then that should serve as an opportunity for purchases. Our idea starts from that concept. Someone can post the entire outfit and people who want to buy that outfit can apply for it. We'd like
We're using PayPay Flea Market system for this one. What we would like to do is to give shape to a new type of social commerce on WEAR, and we believe that we'll be able to implement this summer. Next. This is another new topic called ZOZOFIT service. This is a new service we are planning to launch this year. The logo has been made already, and I believe that we will be able to bring to you more news about this soon. This is what it is. We made an updated version of ZOZOSUIT, and we already made the announcement of that. It's been a while since we made that announcement. We're utilizing this technology, and we'd like to offer that to other players.
We also thought that maybe there's something that we can also work on directly, and this is how we conceived this idea for the service. This is a measurement technology application that we will offer. We're not simply asking people to measure themselves, but what we would like to do is to really focus on the measurement technology to sort of keep track of their body shapes. The reason why we decided to focus on this is because when people wear ZOZOSUIT, it's not just limited to apparel, but we found out that many were wearing ZOZOSUIT to measure their body shape for a dieting purpose, to stay fit. People showed interest in how their body was changing. We realized that many people were like that in the United States.
We thought that we should do more of a deep dive in the U.S. market to see what sort of demand and needs exist in the U.S. Therefore, we decided to launch this new service in summer this year, first in the United States. The way that this works is that there are personal trainers. Compared to Japan, there's a great demand, a greater, much greater demand for personal trainers in the United States. We are thinking of offering this to personal trainers as a service so that we can help them give online advice to their clients. The users will wear this ZOZO suit to take measurement of their bodies. This is only going to be the first step of this service.
We would also like to upgrade our application so that we can start to measure body composition, activity level. I mentioned that this is going to be a great tool for trainers, but nutritionists can also utilize a service like this one, or apparel manufacturers. Health food manufacturers can also tap into this service as well. The body metrics and body shape data can be used by different industries so that they can offer new services based on the data that they acquire. This is the last part about sustainability. Next slide, please. Last year, around the same timing as today, we mentioned that we're going to focus on sustainability. There were four focal initiatives for us. These four are written on the left. For each category, what are we going to do exactly?
What are the actions we will take? That's been mapped out here on the chart. We basically made our decisions using this X and Y-axis. We thought of the importance, the level of importance for the stakeholder, so that's in the Y-axis. We also looked at the level of importance as... for ZOZO Group, so that's on the X-axis. If there are actions that are proven to be important for both axes, we will take on those initiatives. We will set the KPIs for each, and also have more concrete ideas about our actions. Through our website and through financial results announcement sessions like this one, we would love to share with you more about this in the future. Okay. That is it from my side. Thank you.
We'd like to close the full year financial results announcement of ZOZO for FY 2021 ending in March 2022. Thank you for your attention.