Nov 4, 2021
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Yuta Tsuruoka
00:01 Hi. [Foreign Language] 00:07 [Interpreted] Thank you very much for coming to this meeting.
And because of COVID-19 infection, we are going to be holding this meeting online. This will be streamlined live.
And please input your questions. In the chat box, you can ask questions during the presentation as well.
And the questions will be responded to, at the Q&A period at the end of the presentation. This will also be [indiscernible] for future streaming.
Let me introduce the speakers to you. My name is Tsuruoka, I’m the Representative Director and the CEO.
Ken Harada
00:57 My name is Harada. I am the Director and CFO.
Kenji Yamamura
01:04 My name is Yamamura, Director and COO.
Yuta Tsuruoka
01:11 So let me begin now. First of all, from Tsuruoka, I would like to start the presentation.
First of all, I would like you to refer to page four. This is the mission that I’m including every time.
This is what I’d like to begin with you. The mission of our company is payment to the people and power to the people.
This has remained constant. People is included and from the foundation, we have been focused on empowering the individuals as well as the small teams.
We hope that these people can be further empowered. 01:56 In the past, the privilege entities, the services it can be democratized.
So that it can be utilized more by long tail market participants. This is the first and foremost advantage.
Therefore, in order to achieve this mission, payment to the people. In terms of payment and easy solutions, we will be providing to other financial services that will also be provided to the long tail market people.
By so doing we hope to fulfill the mission of payment to the people and power to the people. 02:38 Next, page five.
This is something that I’m always including, which is the outline chart of our business. This Pay ID, however, it will be a subject to renewal design.
Shopping service Pay Id is how it will be renewed within this year. And that is the reason why we have changed the naming.
I will give you further explanation on what kind of services are being provided. This is a float money on right hand side.
The Pay ID is positioned. This is all the purchases.
And in the following page I’ll give you further details for the purposes, when purchasing products ID is provided here. 03:24 Right hand top is BASE, this is the BASE business, the mainstream businesses since our foundation for individuals as well as for SMBs.
For long tail participants, we are enabling a simple creation of the online shop. So there easily online shop can be established utilizing BASE.
The right hand is PAY.JP. We are providing the value added of creating shops that are in PAY.JP, the payments API can be provided for the company so with engineers and development staff.
Payment can be introduced very easily using PAY.JP. So the three boxes indicate the businesses that we have.
Pay ID on the left side is the only one that is provided to the purchases. And for BASE and PAY.JP is for the merchants as well as shops, individuals and SMBs are utilizing the surface.
04:38 Now the logos, I will be changing within this year. We will be introducing Pay ID service that will be introduced new.
Recently, the shopping services Pay ID commencement was introduced using a press release. In the past for the BASE brand, there were two functions.
One is to establish the online shop. In Japan, we are advertising as through TV commercials.
So this online shops can be created very easily using BASE, is the message center we are going get in. And there was also the shopping app site as well.
05:27 What it can be enabled in terms marketing? As being introduced through BASE and for push and notifications are -- should be promoted that is the reason why shop being up, BASE was provided as all.
But as we expanded online services, the BASE brand should be further strengthened in terms of the net service. And on the other hand, we felt that we have to focus on the purchase side as well.
So shopping app BASE and should be strengthened going forward. That means that the BASE brand as a store front service has been making efforts, but it may be deemed to be more.
And it could be a hurdle for the purchasing side. 06:21 And therefore, store front service is what we are providing.
But we also are very much providing outstanding services to the purchases as well in the mid to long term. So good services overall we provided and through this effort, the GMV will be maximized.
And therefore we want to give priority here, the shopping a brand as well as for the purchasing side, the brand will be clearly a segment in storefront, advantage will be provided and purchases assets will be insured. And this can also be utilized as well.
06:58 These two advantages will be brought to them, within the BASE income group. That is the reason why we are going to be integration the brand.
As you can see on the right hand bottom. For BASE is to create online shops.
This is how it will be segmented and we can further brand -- increasing branding activities. And for the purchases, we have the Pay ID.
This is going to be clearly defined. Therefore the seven point five million, purchases asset is where we can provide the further added value.
These are the advantages we hope to obtain through this change. 7:47 The Pay ID is a service that we've been continuing in the past.
So seven point five million people with IDs and one million MAUs exist as well, therefore, it is already significant shopping services and will be revamped. And going forward, it will increasingly it become a very important part of our business going forward.
The details are outlined on basics. This is the details regarding Pay ID.
08:21 The focus of Pay ID is outlined on page seven. We have the BASE, which is to create online shops, so Pay ID is for the purchases.
This is a brand facing the purchases with Pay ID. Our focus will be two-fold.
First is to increase our new purchases. Quick payment methods will be provided.
A discovery function will be enabled to create opportunities to find new shops on BASE. And also receiving coupons as well as marketing activities can be enabled through the communication function.
By so doing, we hope to increase a number of repeaters utilizing our services. Therefore, these are the two objectives that we hope to achieve through the shopping service Pay ID.
09:20 And there are so many things that we wanted to do, but we’re not able to do so, but with Pay ID, we can pro-actively presume these avenues. If you have any inquiries, I please ask at the Q&A session that we will have later.
09:38 Next proceeding to the executive summary. For this quarter, the topics is that include the monthly active shop for BASE businesses surpassing sixty thousand continuing to drive the GMV growth.
For BASE business GMV on a CAGR basis was at sixty five point seven percent. Therefore, it is indicating continued high growth.
10:04 For the third quarter summary should be referred to plus ten thousand shops has been achieved. So increased the monthly active shops, the increasing trend is continuing.
Furthermore in terms of sales promotion for shop owners, we are integrating with outside the platforms such as Google and TikTok. So action has been implemented in the domestic platforms that was highlight of the Q3.
10:38 Page ten, this is information that we are always providing which is the GMV breakdown. This is obtained by monthly GMV – by calculating a number of monthly active shops by monthly average GMV per shop.
The middle, the monthly active shops is very important because we are committed to long tail participants. In this quarter, once again, sixty thousand shops was achieved.
Therefore strong growth has seen maintained for the quarter. 11:18 Now in terms of the marketing GMV, after August, the impact of COVID-19 has declined.
Therefore, there is a reaction a decline. This is also shown in this result, but business that we have lost, the significant merchants or competitive edge has been lost that is not the case.
With COVID-19 impact is now stabilizing, and we are now – we are getting back to normal, with that the monthly GMV has – is reverting the strength. But products itself are growing.
Therefore, we will continue to make efforts to grow this area going forward. 12:06 Page eleven please.
Now, as I mentioned in the executive summary, I would like to talk about the external integration. We have efforts with Google and TikTok, these initiatives have been announced in the third quarter.
Domestically, the only client or the only player in Asia are the areas where a competitive edge can be understood by them. By so doing, this is leading to our own competitive edge.
We are seeing virtual cycle and further new value can be provided to the shop owners, as a result this integration. 12:53 Now it is not directly related to our company, but I would like to talk about Creators Economy Association, where BASE serves as a Representative Director from the consumer agency.
Of course, agency the specified commercial transaction and has provided to new provisions. In the past, we had to disclose personal information in selling, goods and contents on the platform for the long tail payers it was a significant hurdle, but platform may list now the address and firms, number of the service platform.
This is a new revision that is being made. I think this is significant step forward because from BASEs foundation, this was a major challenge but recently with the increase in the number of online shop owners, a new action has been taken.
Therefore, this is a significant change for our company as well. That is the reason why we added the stage.
14:11 Page thirteen, this is full VP business. Once again compared to year-on-year basis fifty five point nine percent was achieved continued growth.
As mentioned here, additional increases have been made. 14:33 Page, fourteen, The CAGR for the past five years shown here.
Last year, in twenty twenty in the third quarter significant growth has been achieved. Once again, this quarter, we have been able to achieve that level.
And therefore, in the long term trend as CAGR of sixty five point seven percent, a very strong growth has been maintained over the years. Therefore, for individuals as well as for SMBs, we are continuing to focus on this market, capturing new market so that these shops can continue to grow going forward.
We want to support to this effort. We hope that new market will be created and we hope that commitment will be made to such a market that and this is being reflected in this growing trend.
Long tail market will be committed to in the long term. By so doing we hope to continue the growth trend forward.
15:27 Page fifteen, from here, we have additional new material that is being added. Once again I'd like to talk about the structure of our business.
The BASE service is the cycle the store front service. You can own your own online shop, brands can come to the floor in selling products, so on the net.
15:55 Why this is popular? It has several factors.
For example, through standalone collaboration, social media can be utilized for tracking traffic. And on top of that, we have the BASE where checkout can be made, and that is the reason why these significant numbers have been achieved.
The customer attracting platform is very important for us. And with these platformers, we hope to continue to work together.
So that we can have more customers being coming to BASE, so that long term market can be successful. 16:45 Why the long-tail shops are enjoying a significant sales, is also related to the fact that the platformers are growing.
It is not something that though we are able to achieve the GMV or active shops on our own. We are being supported by this ecosystem.
This is the characteristic of the store front business. 17:09 Against this backdrop, the external platform integrations very important for us.
In order to have sustainable growth, this is playing a very important role. Therefore, this cycle is very important within BASE.
We have the significant numbers of shops as well as active shops are very significant domestically, this has being enabled by collaboration with Instagram, as well as TikTok, It’s leading to these integrations. GMV will be created new, which will be reflected in the products, which you will mean that the more shop owners will use this leading to further GMV.
This is the store front service, a basic principle. Therefore, this cycle is very important in making decisions as well as allocating resources.
18:08 In terms of active stores, sixty thousand per month is very significant. In platforms, there are not so many domestically with such scale.
We have the most significant number of active shops through, this is cycle, we are able to generate further increase in monthly active shops. 18:40 Now -- let me now talk about the focus areas for sustainable growth in the short term, medium term, and long term.
Objectives are shown here. On our part, as shown in our mission for individuals and SMBs the impairment thereof is all partners’ importance with the sustainability, we want to provide support and important in the long term that is a mission of our company.
19:07 In order to provide sustainable support in the medium term, what is required is functions and the external integration, operational efficiency is important and in the long term, shopping service Pay ID will be importance as well. In order to achieve a mission, we will continue to focus on these functions so that we can provide long term services that are significantly greater going forward.
So that is the end of my first part. 19:44 Now, on my part, I’d like to talk about the financial highlights of Q3.
Please refer to page twenty. This is the performance for the third quarter.
Left side is for the three months from July to September, right hand side is January to September. On left hand side for the three months of the third quarter in terms net sales, BASE business, Pay business, GMV was able to grow.
20:12 On the Y-o-Y basis, we have recorded positive growth. For SG&A, from the fourth quarter of last year, we have been making preemptive investment therefore SG&A has increased significantly compared to the previous year, because of this forward looking investment.
For this quarter, we are red ink. For the months to date, because of the year-to-date, we have been able to achieve a very significant growth.
For SG&A as I mentioned earlier, we are making forward looking investment therefore SG&A has increased significantly compared to the previous year. Last year was one point one billion in terms of profit, but for the three quarters on fiscal twenty twenty one on an accumulative basis, we are in red ink.
21:14 This is the balance sheet. There is no significant change but the cash is twenty two billion.
Therefore, we still have ample cash for further investments. Furthermore increases have shown in the twenty percent increase in terms of operating deposits.
This is because Pay business GMV has grown significantly as a result, operating deposits have increased accordingly. 21:43 Now this is consolidated GMV trends.
For BASE and Pay and PAY.JP, forty two point eight billion is the total. This is the highest ever, we have been able to continue the growth.
For BASE and Pay, Pay is the payment services. There is no GMV that overlaps with the BASE and Pay for the forty two is the total amount for the whole group.
22:20 Now, this is trends in net sales for the quarter, two point four billion is the result. Y-on-Y basis we have recorded an increase.
This is the breakdown of net sales. Pay business is performing well.
It's growing. So as it trends out, BASE as a percentage of net sales is declining, and this is ratio of net sales, gross profit.
BASE as a percentage of net sales is declining [indiscernible]. Q-on-Q, it's down in terms of gross ratio of net sales by business.
That gross profit is rising so Q-on-Q its growing. 23:13 Next SG&A expenses, continuously, ever since the fourth quarter last fiscal year in BASE business, we are making forward-looking investments, so promotional expenses and HR cost, personnel costs are hovering high.
The red part of the bar represents promotional expenses. In the third quarter, there was a slight decline.
Promotional measures, there efficiency was improved therefore, expenses improved and that’s a slight decline. Likewise, in terms of forward looking investments, we are focusing on product developments, personnel expenses and other expenses are rising in those areas.
23:56 What I said to number of employees, so we are reinforcing recruitment of personnel, staff is increasing fourth quarter and onward, in order to expand services, we are recruiting mainly people for product development. And operating profit or loss, as I said, we're making forward looking investments therefore, there's an operating loss.
24:24 From this part onward, this is about the numbers by business, so BASE business GMV. In the second quarter, Y-on-Y was negative growth, but in the third quarter on a year-on-year basis, it's trend positive in terms of growth.
Q-on-Q, the number of monthly active shops has grown, because of COVID-19 and seasonality, GMV per shop declined. And so GMV remained flat Q-on-Q because of that.
25:05 And this shows GMV by the date of the shop the years of the shop. You can see that the newly opened shops are growing nicely.
So existing shops on the other hand that were opened twenty twenty or before because of COVID-19 and seasonality there GMV is down. And this is BASE business as GMV have broken by KPIs.
In the middle, number of monthly active shops so as I mentioned earlier, on Y-on-Y basis increase by ten thousand, so we able to have solid growth there. On the other hand, on the right hand side, monthly average GMV per shop both on Y-on-Y and Q-on-Q, there's a decline.
26:01 And as I said already, because of small impact from COVID-19 and seasonality, there are declines as seen of late about, compared to twenty nineteen, we are having growth. In terms of impact from COVID-19, we would like to take in-depth look at that, impact from COVID-19 is not limited to only a few categories.
It seems that it's having impact across different categories but food and beverage category was impacted mess. On the left hand side, monthly of GMV per shop but for food and beverages category.
It peaked out in the second quarter last year, it's been declining since and of like Q-on-Q negative nine point seven percent. So that is reflected largely into GMV per shop, but it's not that we're losing shops.
So as is on the right hand side, the number of monthly active shops, suffer food and beverage category itself is growing quite solidly. 27:23 And this shows GMV payment amount and take rate.
In terms of the take rate, our net sales divided by GMV and of late, it's seven point nine percent. Q-on-Q, it's flat.
Up until recently, there was some declining trend, but it's now flat in recent weeks. And on Y-on-Y basis, as GMV on a payment amount basis, it's growing, but take rate Y-on-Y is down to seven point nine from eight point four, therefore net sales at around two billion.
And take rate decline on a Y-on-Y basis as it's described here that's because of decreasing purchases, the commission that is the factor behind this, In the last earnings briefing we explained about this. So, there are changes in the most of a settlement because of that take rate is down Y-on-Y.
28:35 And trends in net sales and gross profit, on a quarter-on-quarter basis, net sales and gross profit margin there are flat, up until recently because of increasing cost of sales ratio, our gross profits were down, but now they are flat. On a Y-on-Y basis, declining take rate with GMV cost of sales ratio, it's down.
29:10 From this part onward, business topics. In September this year, we increased a number of new shops and as of September the number of shops reached one point six million.
And this is the functional releases, so CRM function that was newly released, allows for delivery of email, newsletters according to segmented purchase categories. So email communication to new customers as well as increased engagement with existing customers.
And next, automatic restart notification app, this is a new function. So this is conducive to increasing operational efficiency, increases in sales for large shops.
30:04 Next BASE market, in the Kansai region, we have this sales space, but this time in Osaka, we have set up on shop space. Fiscal shop that pays for -- space online stores.
And this is about the BASE CARD. This may not be easy to understand but after the merchandise is sold by the shop, but usually, what happens is on the right hand side of the table standard value transfers, so at the shortest ten business days later, the shop owner will receive a payment for the merchandise sold.
Ten business days compared to other services, it's relatively short, but those of who would like to get the cash quicker, they can use express bank transfers. On top of those two, we now have BASE CARD.
So net shop sales can be cashed in right away immediately using this virtual card service. 31:14 Next Pay business with respect to GMV, as this mentioned on a Y-o-Y basis, fifty five percent very high growth rate is being maintained.
And net sales and gross profit with increase in GMV. Again, the growth is high of for net sales and gross profit as well, so that was the performance for the third quarter and from this part for your forecast.
And this is the policy that we have been announced already. The policy remains unchanged.
Now this is the forecast for the fiscal year ending December twenty twenty one. 31:57 On the far right, and progress as well as performance up to September is shown on the left.
So the numbers up to the third quarter, in particular in the third quarter, it's at the lower end of the forecast range. Four year results are expected to be within the forecast range.
And the BASE business, the progress they are always here. GMV based on orders or at the lower end of the forecast range and as I've said, while the number of monthly active shops is growing more than expected, but monthly average GMV per shop was lower than expected due to reduce impact from COVID-19 that's where we are.
32:48 Next on Pay business, it's very successful. So it's now performing at the upper end of the forecast range, so I rushed three of that.
33:02 That concludes our remarks. Thank you.
Q - Unidentified Speaker
33:10 [Foreign Language] 33:13 [Interpreted] We will now take questions. Please use the chat box on the right side.
The Secretariat will read out the questions for the responses. We have already received several questions.
So without further ado, we'd like to start. From Mr.
David Gibson, what is the impact of the Olympic Games? In the third quarter, what kind of impact did have on the GMV of BASE?
Yuta Tsuruoka
33:42 So the Olympic Games was at certain level from the end of August. In Japan, COVID-19 cases has started to decline.
This has also had an impact as well. At the time of Olympic Games, not just answer but the EC or Internet traffic has been impacted somewhat.
GMV was on a declining trend as a result of the Olympic Games. So there was an impact of the Olympic Games.
Unidentified Speaker
34:23 The second question. GMV growth in the third quarter plus eleven percent compared to that October GMV how is it performing?
Yuta Tsuruoka
34:34 GMV in October, in terms of the growth level, it's not much of a change. Impact from COVID-19 is shrinking, so it's hard to forecast and predict, but the product themselves are growing and compared to our competitors, I think we are acquiring new merchants successfully.
So, it is hard to forecast the impact on COVID-19, but we do hope that we can continue this solid growth.
Unidentified Speaker
35:06 Third question Pay ID. Regarding Pay ID, while it is integrated in terms from [indiscernible] what kind of investment are you contemplating?
Yuta Tsuruoka
35:19 [Interpreted] Regarding the plan for next year, we are now engaged in discussions. I cannot give details on this, but for Pay ID is in a mission.
Payment to the people, part of the people what we are trying to achieve. And as a payment solution, we must make further improvements for the BASE shop owners.
So we want to increase our new customers as well as repeated customers. This has been the important initiative that we have been contemplating from the very beginning.
So we always wanted to Pay ID. Therefore, we hope that this will become a significant business going forward and we need to make a commitment to enable this process.
Unidentified Speaker
36:00 So there are two questions with respect to competition. One is from Mr.
David Gibson. BASE shops, do they use America-only stores and what is the competitive relationship with my store?
The second question from [indiscernible] from SMBC Nikko, with respect to the changes in the competitive landscape with [indiscernible] shop centering, the pace of acquiring new emergency, new shops has that changed?
Yuta Tsuruoka
36:32 Competitive landscape, of course, is changing from time to time. So are both being used?
Yes, there are shops who use both us, as well as the [indiscernible]. But the vast majority of the shops are either on us or [indiscernible] shops and with the emissions of other players is the efficiency of acquiring new shops, declining our shops being taking away.
I don't think so. That's not happening.
So I think we are competing with the competitive edge.
Unidentified Speaker
37:12 [indiscernible] SMBC Nikko Securities, [indiscernible] second question. Regarding food and beverages, what is GMV per shop going forward?
Do you think that this is going to decline because of offline consumption being increasing?
Yuta Tsuruoka
37:35 Yamamura is going to respond to this question.
Kenji Yamamura
37:38 As mentioned on this page, for food and beverages category because of COVID-19, we are reverting back to the level of -- prior to COVID-19. We don't know how much it is going to go back to that level.
It it's difficult to forecast but this impact is likely to continue for some time going forward.
Unidentified Speaker
38:02 Next integration with external partners questions from David Gibson, of sixty thousand monthly active shops. What is the ratio of integration with Google and others is leading to increased study GMV?
Yamamura will answer the question.
Kenji Yamamura
38:21 Yes, the timing of the release of the function is different, so there's a difference there, but tens of thousands of shops are using our services integrated with Google and others. They're very popular.
And we're in the stage of product integration and we are planning for as to be released recently. We've organized joint seminars with Google.
And going forward, we're going to have a live streaming and joint seminars with Instagram. We are planning for that.
Now more than one thousand shops are to gathered for such events. So inclusive of education, we would like to continue to integrate with each of these platformers going forward.
So -- although they may not be major impact on our performance right away, but toward next year and next year end, we would like to continue to reinforce our functions and services.
Unidentified Speaker
39:29 Hi, Next regarding the monthly active [indiscernible] asking the question. Regarding net increase compared to the previous quarter, why it is sold down?
In terms of the full year plan, the fourth quarter you're going to be more active in terms of promotions. So what time measures are you are contemplating in this regard?
Kenji Yamamura
39:54 This is Yamamura speaking. I’d like to respond.
Regarding the active shops on monthly basis, the net increase has been explained today compared to the previous year, there has been --because of COVID-19 impact as we are getting back to normalcy. Therefore, there is a reduction in pace in the recent past.
For the fourth quarter promotions, the basic premise is that we are making forward looking investment to enhance awareness so this solid basis is good for opening online shops. So this is different awareness we want to enhance.
The market is likely to grow in the forecast of the market growth that we want to establish our position. This is going to be very important for us in long term.
Therefore in the fourth quarter promotion investment is not going for factor in GMV immediately. But for the fourth quarter, easy and for retail, it's a very important period throughout the year.
Therefore on our factors I have been mentioning, we are going to promote usage through advertising and we are also having the Pay ID brand renewal. Therefore measures for the purchases that will be enforced.
Unidentified Speaker
41:17 Thank you. Next, with respect to KPIs.
Tony Matthew from Mizuho, have several questions. Question number one, October and onward, is there any significant change in the trend in terms of increased number of shops?
And do you see a timing where GMV per shop is going to stop declining? GMV per shop is declining, is the only factor less impact from COVID-19?
Are there any other factors?
Yuta Tsuruoka
41:56 So with respect to our plan for SG&A, we have a full year plan. Can we have the question once again?
Unidentified Speaker
42:15 So Tony Matthew from Mizuho Securities, so is there any significant change in the sales, in terms of active monthly shops and is there timing to see a stopping decline in GMV per shop, GMV per shop is declining, but is the only faster behind that less impact COVID-19? Are there any factors?
Yuta Tsuruoka
42:51 So as to the situation in October and onward, on a monthly basis, since around our late August in the third quarter, it seems that there's impact assuming from our later August, that's continuing. And what's going to happen going forward, we are performing analyses, but the outlook is so unclear, I have to say.
As to the declining trend, it is hopefully slowing, and we are in now performing analysis on that and another point, so monthly average GMV per shop. So impact from COVID-19 has run its course and so less impact from COVID-19 that is affecting.
Not there are any other powerful factors behind this?
Unidentified Speaker
43:55 Mizuho Securities, Tony Matthew question. Regarding the [indiscernible] business, for the shops GMV, that is opened for twenty twenty, opened and for the subsequent shops, it seems that the decline is greater for the subsequent shops.
Is there a particular reason for this?
Yuta Tsuruoka
44:20 Yamamura will respond to that question.
Kenji Yamamura
44:23 Now to this question for prior to twenty twenty has grown. As a result of the COVID-19 this is both impact to normal but other than this it is the trend, we are seeing closures, so losing to competition that is not the case.
Therefore, there is no stronger factor that has been identified.
Unidentified Speaker
44:53 Next? So SG&A, let's get back to questions with respect to SG&A, progress is sixty nine point four percent with less increase in the number of monthly active per shops is there going to be change in strategy and could there be a major increase in SG& A in the fourth quarter?
Yuta Tsuruoka
45:17 Well, respect to the strategy, allow me to answer that. So SG&A, including promotional expenses, we’re on plan.
We're on full year plan because of the recent trends how we are going to change the strategy now. So to answer the latter half of your question, is that a possibility that SG&A may rise substantially in the fourth quarter?
Basically as to how we expand a cost, our policy remains unchanged, the same policy as in the third quarter. In terms of cost breakdown promotional expenses, and personal expenses, these are large items.
With respect to recruitment, we would like to reinforce that strengthen that. So the cost of recruitment could rise, so because we are focusing on that with increased staff size, personnel cost is expected to rise.
With respect to promotional expenses, depending on the measures, the expenses may change and so or depends on promotional measures. And in order to spend the cost per plan, are we going to do something particular?
No. So we will continue with a policy and continue to make investments as planned.
Unidentified Speaker
46:47 Next regarding the competitive landscape with Tony Matthew, Mizuho Securities asks the question What is the owners that is selling to be? So can perhaps yours other roots?
As a result of that, the monthly GMV could have a negative impact as a result of this. So is this conceivable?
Kenji Yamamura
47:12 I would like to respond to your question. BASE, as I have explained at the beginning is a store front type of EC service.
And as mentioned in the diagram in the middle, the social media, we want people to be able to sell their products. We want to provide a structure, which will enable such a process.
Therefore, our type of store front and attracting customers through social media and the other more type could be both used. And there could be some shops that can sell more for the latter type.
But on the other hand, people who are selling handmade products as well as fresh products. If we look at the GMV, this is -- GMV that was not the BASE.
So, I don't think it could be captured by our competition. So they have been accumulated businesses that have been accumulated, and they will send coupons and it can be used freely.
That is the type structure we are providing. Therefore when they trying to attract the customers, they are likely to use BASE, but if they are attracting customers through different roots, so that might also be used.
Therefore on our part, we are not considering this to be problematic, At the GMV that they have that – I was thinking about the competition is not the GMV that we are looking to achieve but there is no cannibalization in the area. Therefore, because in terms of tracking customers, we are all partners therefore on a plant attracting customers, so is the type of a shop that is likely to benefit from BASE and GMV.
And even three platforms so we hope that we can increase traffic. We believe we are able to provide the added value.
Therefore I’m sure that there are that type of online shop owners, but I don't think our GMV will be impacted by them.
Unidentified Speaker
49:36 Next Tony Matthew from Mizuho Securities, a question regarding Pay ID. You have listed out the purposes of integrating Pay ID services and the settlement methods.
So if you could provide us with the specifics.
Yuta Tsuruoka
49:54 So Pay ID, in terms of Pay ID, as I said at the outset increasing new customers and CRM through that, we would like to have repeat customers purchase more, so that's what this service focus is on. So increasing new customers in terms of that, that's going to be focused on payment and settlement, that's going to be important from our perspective.
Without entering the password, on a seamless basis, so you are able to check out that’s one part of the payment service. And so pay later, type of tool can be provided so that purchasers can choose from among flexible payment methods without entering credit card information that's cumbersome you can purchase that could increase CVR and that could also drive net sales for us, so there's a possibility that we may consider that in the future.
Is that all?
Unidentified Speaker
51:19 That's it for all the questions that we've received so, I would like to bring this session to a close.
Yuta Tsuruoka
51:27 No, because of the COVID-19, but the impact is now stabilizing. So and there is a lack of visibility, but as a product we will continue to accumulate the assets we have been successful in doing that.
And in terms of the relationship with the other companies as I’ve explained at the outset that we are cooperating with outsider platform as well. Therefore, the factors that has led to your support is maintained a sustainable manner will be maintained as well.
And the Pay ID, that will be revamped. Therefore, we believe that if we continue to become a larger platform to promote continued growth.
Thank you very much for your attendance despite very busy schedules today. Thank you.