Thank you for taking time out of your busy schedule to watch Mercari Inc. Result briefing for the Q2 of FY 2021 ending in June. I'm the President of Mercari Koizumi. AMET COVID-nineteen to ensure the safety of everyone. We are holding this session online.
We thank you for your understanding. April. Myself and the new CFO, Eda, will be taking you through our 2nd quarter results. Fiscal 2020. This is the agenda for today.
I will first take you through the summary of our performance in the Q2 and introduce our investment principles for the second half of the year. April. Eira will then explain our results for the quarter in more detail. Fiscal 2020. Then I will describe the circumstances surrounding each business and our initiatives undertaken to play an integral role in realizing a circular economy.
Fiscal 2019. First, starting with a summary of the results and investment policy. Last August when we announced the full year business results, we explained our business policy Dallas amid COVID-nineteen. Fiscal 2020. We will rein in investment and reduce costs to implement mean business management.
Fiscal 2020. We also mentioned at the time that if we see that there is a potential for growth, we will prioritize growth and begin reinvesting. Fiscal 2020. We also explained how in the mid to long term, fiscal 2020. We would like to play an integral role in realizing a circular economy.
Its fiscal year. It's been 6 months since this announcement was made. Fiscal 2020. We have reigned an investment due to COVID-nineteen, but things have become a bit clearer. So we would like to begin to reinvest and to begin hiring talent to grow even faster.
Fiscal 2020. With respect Mercari Japan, GMV has grown at more than 20% year on year. Fiscal year. And we also explained at the beginning of the fiscal year that we would like to achieve an adjusted OP margin of more than 30%. Fiscal 2020.
And as of the Q2, we are on track. In the second quarter, we simplified packing and shipping to further improve user experience. Fiscal 2020. We would like to take our partnership with DOCOMO further by working not only online, but also offline to improve convenience. Regarding Merpay, as we explained at the beginning of the fiscal year, we have begun charging service fees for the fixed amount payment service, installment payment service starting November.
Fiscal 2020. We will continue to improve our profitability by focusing mainly on the credit business. April. We have strengthened our efforts in identity confirmation and anti fraud measures. This is an important task for the entire industry, fiscal 2020.
But we have implemented E KYC and other measures, fiscal 2020, which has enabled us to restart the new connections and charging functions with banks. Fiscal 2020. We will continue to do our utmost to offer an even more safe and secure environment for our users. April. Lastly, in the U.
S, we were also impacted by COVID-nineteen and other circumstances, but the situation is beginning to settle down. Fiscal 2020. We have continued to increase the number of users and marked high year on year growth as well. We have also started charging users' payment processing fee in addition to the selling fee. This has improved our profitability.
Fiscal 2020. As such, we will invest in marketing and making product improvements so that we can and for even higher growth. That was the performance summary and here is a summary of our KPIs. It. Our consolidated net sales grew more than 41% year on year to JPY26 1,000,000,000 and the consolidated operating income was JPY1 1,000,000,000.
So fiscal 2020. We have been profitable for 3 consecutive quarters. Mercari Japan grew steadily at more than 28% year on year April. And we have also realized high profitability with an adjusted OP margin of 32%. Merpay users has also continued to grow to 8,500,000 users as of the end of December 2020.
Fiscal 2020. We believe we are beginning to become a part of people's lifestyles. And with respect to Mercari U. S, it. Although as I mentioned, we raised the take rate, the GMV more than doubled, growing by more than 107% and MAU was 4,200,000 more than $4,200,000 and we want to keep this trend going.
April. Next regarding the investment policy in the second half of the year. As I mentioned earlier, fiscal 2020. While keeping an eye on user behavior, we have begun reinvesting. Fiscal 2020.
What is important is to maximize future growth, future profits. So we need to make investments while prioritizing growth, fiscal 2020, but make adjustments regularly as required depending on the business environment. So we would like to make investments and remain flexible. For Mercari Japan, continuous growth is also important, fiscal 2020. So we will implement measures to increase listing and undertake marketing initiatives both offline and online profitability of Meripay, we believe it is important to focus on marketing initiatives that will improve awareness for Meripay smart payments, fixed rate payment and other credit services to increase the number of users.
We will also invest to provide a safer, more secure environment. Fiscal 2019. And thirdly, this quarter is the first time we have introduced the growing wallet service, it, which will allow users to use the funds in their Merpay account for asset management. Fiscal 2020. We would like to roll out this service as a 3rd business at Merpay.
April. And regarding Mercari U. S, to achieve further growth, we will undertake product development and marketing initiatives to improve our awareness and acquiring new users. So our approach will remain unchanged. Now on to the financial highlights for the Q2.
Fiscal 2020. I would like to invite our new CFO, Etta, to introduce herself and take it from here. Inter and CFO, I'm Sayaka Eda. I'm looking forward to getting to know all of you. Fiscal 2020.
I would like to take you through the financial highlights of the Q2 of FY 2021 ending in June. 2019. Starting with consolidated net sales. We had record high consolidated 2nd quarter net sales of RMB26 1,000,000,000, which grew 41% year on year. Fiscal 2020.
The operating income for the Q2 was RMB1 1,000,000,000. Fiscal 2020. So we have been profitable for 3 consecutive quarters. Although we are making a profit, 3rd quarter onwards, fiscal 2020. We may be prioritizing growth and making investments that will maximize future profits.
Fiscal 2020. In this case, we may start to operate at a loss. We will flexibly Q2 of 2019. We will continue to focus on the scale and timing of the investment while keeping the COVID-nineteen situation and user behavior in mind. Next Mercari Japan's GMV and MAU.
Fiscal 2020. We continue to see impact from COVID-nineteen at the end of last year, but many people have begun to adjust to this new lifestyle. On the other hand, more people went out. But despite the situation, the GMV grew strongly at 28%. Fiscal 2020.
But as Koizumi mentioned earlier, the annual target of 20% GMV growth year on year remains unchanged. With regards to MAU, the stable growth of the MAU will be important for sustainable GMV growth. So we will continue to acquire new users to ensure sustainable growth in the following fiscal year. It. Next appeal for Mercari Japan.
Like the consolidated net sales, the net sales for Mercari Japan during the Q2 was record high. Fiscal year. The adjusted operating margin was also high at 32%, but we will not be revising the target of 30% or higher for the fiscal year. Fiscal year 2019. There are 2 key points here that I would like to mention.
First, regarding the personnel expense ratio, fiscal 2020. We paid a one time bonus to our employees in the Q1, fiscal 2020, but this has come down to normal levels in the Q2. 2nd, the promotion cost ratio increase as we began to prioritize growth and to reinvest in the 2nd quarter and initiatives that we judge was necessary for future growth. Promotional costs has gone up in comparison to the Q1. From the Q3 onwards, for continuous growth, we believe we will need to acquire new users.
So Kohei Semi will go into detail about since we will be implementing, but we will invest in marketing and offline initiatives. Fiscal 2020. So though we will keep an eye on the business environment, we may be spending the same amount as the second quarter or more in promotions in the third quarter. The adjusted OP margin target of over 30% remains unchanged. Next, Koizumi will explain the status of each business.
2019. Now I would like to explain the status of each business. Fiscal year. With respect to initiatives for each business, starting with Mercari Japan, we have made efforts to increase listings since last fiscal year, fiscal 2020, and this has not changed. In the Q2, we have especially focused on making packing and shipping easy.
Q2. Due to COVID-nineteen, demand for contactless shipping has increased. So as you can see here on the left, we have made it possible for our users to ship with Yamato Japan Post and via convenience stores without going to those outlets by using U Packet Post services. And it's not on the slide here, but we have also started to offer the option to leave packages at the door as part of our efforts to enhance contactless delivery. Fiscal 2020.
We have heard from our users that shipping can be a hassle for them. So as you can see in the center here, we have began offering at year service shipping, which does the packing and shipping the sections in red on behalf of the users. We believe this will help us acquire new users as well. Fiscal 2020. And lastly, at the conference last February, we introduced Mercari Post, and as of end of January.
These posts are available in 20 locations and we would like to continue to install these mailboxes in convenience stores another locations people frequent. As part of our partnership with DOCOMO. These mailboxes will be set up in 1,000 DOCOMO shops across Japan. Equinor with Docomo, we have implemented a number of initiatives to encourage listing. First is ID integration.
We have integrated 4,800,000 ID so far. In comparison to users who have not integrated their IDs, the ARPU for users who have integrated their IDs tend to be higher. Fiscal 2020. We believe this is contributing to GMV, so we will continue to encourage people to integrate their IDs. In addition to Mercari posts, in 1,000 DOCOMO shops, we would like to organize Mercari workshops, sell packaging materials and implement various measures to make Mercari easier to use.
Next regarding marketing, we would like to become a service that is loved and used by a wide range of age groups. And it may still be difficult for them to use. As you can see here on the left, we have changed our creative from targeting youth to an older age group as well, so that we can communicate that it's also easier for them to use. Fiscal 2020. And with respect to offline initiatives on the right, of course, we will adopt the necessary COVID-nineteen countermeasures, fiscal 2020, but we would like our users to be able to use Mercari at various touch points, so we will continue to develop such environments.
We are holding Mercari Workshops online as well, but we will continue to undertake initiatives online and offline to improve our exposure and increase our MAU. 2019. Moving on to Mirpay, as I mentioned before, payment, credit and growing wallet, fiscal 2020. We are currently focusing in these three areas. With respect to payment, we would like 2022 to improve convenience.
2nd, credit will play an important role in improving Merope's profitability. Fiscal 2020. As you can see here, we offer lump sum payment and fixed amount payment as part of the Merpay Smart Payment Service. The quarter. The credit limit for each user will be set based on the user's past usage history on Mercari and Meripay.
Fiscal 2020. We will also be using 3rd party data as well to set the limit. Moreover, using AI, we are implementing measures to avoid bad debts. By implementing a wide range of measures, we would like to expand the credit business. 3rd growing wallet.
This is a new service we launched in the Q2. As I mentioned before, users can use their Meripay balance for asset management fiscal 2020, and we would like to see this service grow as well. As a first step, we are using funds, a lending investment service to launch Sustainability Fund. I will describe this in detail later, but I believe many people are quite interested in this fund. As we explained at the beginning of the fiscal year, for Meripay, we have entered the profitability phase.
Fiscal 2020. So we will focus on the credit business and expand our reach even wider with a growing wallet. Fiscal 2020. With respect to the credit business, the photo on the left will help clarify what we mean, but the button on the left is a pay by installment option. April and the number of people using smart payments and fixed amount payments is growing steadily.
From November, we have begun to charge a service fee for fixed amount payments. We have added these buttons and are undertaking marketing initiatives like the point campaign you see on the right here, fiscal 2020, but the awareness is still quite low. So we would like to increase our marketing efforts. 2019. Next, on ensuring safety and security.
Fiscal 2020. With respect to EKYC progress, in the Q1, the industry was struck by unauthorized withdrawals and of course, this is a very important issue that needs to be addressed. We have undertaken identity confirmation and implemented measures to prevent the same issue from happening again. More and more users have confirmed their identities and we have seen gradual progress. Fiscal 2020.
We are the 1st in the industry to be able to resume connections and enable new connections with these banks indicated here like Japan Post Bank. Fiscal 2020. Safety and security are imperative, so we will continue to not only work on improving convenience, but safety and security as well. Fiscal 2020. We have partnered with the largest dry cleaning company, White Express to offer Mericari co payment, April, but also sell packaging materials and have Mercari post on the premises.
So the Mercari Group will work together with other partners to ensure synergies across the group. For growing wallet, as I mentioned, we are working with funds. April. The MeritPay balance can be used to invest in Mercari Sustainability Funds. The first series of the fund sold out in 41 seconds, April, so it did very well.
The second series was announced on January 25th and launched on February 1st, April, but it also slowed down in about a minute. So we believe that there is a demand for a new kind of asset management using Merpay. 2019. Lastly, the Mercari U. S.
Business. During the Q2, the impact of COVID-nineteen was less pronounced, FY 2020, but the GMV grew by 107%, more than double, so we continue to see really strong growth. We have continued to acquire new users as well and we hope to continue to grow strongly. In the U. S, we have begun charging a higher take rate for new listings from October and a higher take rate for all listings from January.
April that is an additional 2.9 percent $0.30 As you can see on the right, in the past, we only charged a 10% sales fee, fiscal 2020, but we are also charging a payment processing fee as well. After implementation of the payment processing fee, we are on par with other companies with respect to the take rate, so we have not seen a negative effect on the GMV. April. We have also implemented instant pay, which many users had requested for, an authentication of Luxury brand products, which will help us improve profitability. In the Q3, the actual take rate will probably come out to be around 15%.
So while improving profitability, we would like to invest in marketing as well in the U. S. With respect to the ease of use, on the left you will see shipping innovation. April. We are working with FedEx to provide SmartPost.
It will take a few days longer to deliver, but it is a cheaper shipping option. April, so we hope this will help meet needs of many of our users. On the right is item authentication. We are working with a 3rd party to authenticate products from luxury brands. We have started with facts, but are gradually adding more product categories.
Authenticated products sell at a higher price and the sell through rate after listing is better. 2019. Next here we have initiatives to improve ease of use amid COVID-nineteen. Mercari Now service has expanded. You Don't Need to Meet Face to Face and products can be delivered to people within the same area on the same day.
Fiscal 2020. We started in San Francisco and expanded to New York as well as Houston, April, so the service is available now in more areas. We hope to add more cities to the list. April. When we take a closer look at Mercari now, we see people selling different types of products such as larger items Light Furniture and Consumer Electronics as you would expect.
And the price tends to be higher, so although the contribution to GMV may still be small, fiscal 2020. We believe there will be higher demand in the future. We are also improving our web years in implementing various initiatives to encourage users to buy and sell via the web. We've added functions not previously available on the web, such as transaction history as well as home screen personalization and a better seller dashboard than the app version. So for users with many products, we are providing functions to make it easier for them to manage their listing.
Different countries means different needs, so we want to offer services optimal for the country fiscal 2020. With respect to marketing, we have focused on raising our awareness. To improve branding, April. We will continue to run TV commercials, radio and YouTube ads. Then increase the frequency of use with CRM initiatives such as coupons and push notifications.
Lastly, Kashima Antlers. Fiscal 2020. We were impacted by COVID-nineteen. Fortunately, we have finished our matches, fiscal 2020, but there were many challenges including the sluggish growth of spectators. The COVID-nineteen situation will continue some time.
So we are implementing various new digital measures such as crowdfunding and gifting 2020 to improve profitability. That's it with respect to our business. Lastly, fiscal 2020. I would like to talk about how we will become essential to the creation of a circular economy. This is something we would like to think about together with society and we would like to continue to use our business assets to contribute to society.
FY 2020. First, as we announced recently, we want to play an integral role in creating a circular economy. Fiscal 2020. We discuss what role or function our marketplaces serve in society. Fiscal 2020.
And based on these discussions, we formulated key principles. Fiscal 2020. And as a platform, we want to interact with society with integrity. Experts on Economics, Business Ethics, ESG and many other fields gathers to discuss and we introduce our key principles on January 27. Trustworthy and Humane.
Based on these three key principles, this is a bit detailed, but a liberal and diverse marketplace can only be realized fiscal 2020. Based on the key principles, products for which supply and demand balance become significantly disrupted and cause confusion, we will begin taking action such as those indicated here. For example, due to COVID-nineteen, during the state of emergency, there was a shortage of masks and sanitizers and other products essential to safety and health in the primary distribution. April. Even if that is not the case, sometimes users unknowingly purchase products for which prices have surged.
Fiscal 2020. We believe it is our responsibility as a marketplace to provide relevant information to them so that they can make an informed purchase. Fiscal 2020. We will need to work with the primary distribution as well, but we would like to alert users, issue warnings, April so they can realize beforehand. These are some functions we will start adding from this summer, fiscal 2020, but we will continue to employ efforts to ensure safety of our users.
FY 2020. Next, to become a marketplace society needs, we need to help realize a society that uses natural resources carefully. We believe that is also important. Black Friday is famous in the U. S, but it is a day when shoppers can enjoy a lot of special offers, and this has now become a global trend.
Fiscal 2020, but we believe users should have more options to enjoy fashion and we should be more eco conscious, so we are organizing Green Fridays. We organize fashion shows with only secondhand products April, and we would like to undertake more eco conscious initiatives like this. Moreover, at the end of the year, many people clean their house top to bottom. 2018. But working together with BookCoff and Akutia, we are promoting cleaning with 0 waste.
We believe throwing things away is neither great for the environment nor society, so we want to help people pass things on. Moreover, we are working to improve diversity and inclusion. Fiscal 2020. With our CEO, Yamada, as the Chairperson, we have established a D and I Council. Fiscal 2020.
We have undertaken various D and I initiatives. In Mercari Tokyo's office, nearly half of the engineering team is comprised of individuals from outside Japan. And we want to ensure that this diverse environment is a comfortable environment for all of our employees to work in. April. Of course, it's not just about nationalities, so this council will address diversity from different angles.
This year. This is very important to ensure that we have the best talent in the industry as well. We will undertake various its initiatives and also share them with our peers in the industry. Fiscal 2020. Finally, in the mid to long term, we want to work with the primary and secondary distribution with everyone to realize the circular economy.
We want to make a departure from the mass production, mass consumption model of the past and create a new lifestyle to create a circular economy. Going forward, working with various partners, fiscal 2020. We will endeavor to improve our customers' convenience and undertake different businesses, fiscal 2020, but we know that realizing a circular economy will take time. Nevertheless, it's an extremely important issue, so Mercari Group will work together as one to address this challenge. That's all for today.
Thank you for listening.