17.4% / : 621 (492 / 2013) 2014): 3.21 (2.48 / FY2012

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2 1 Overview Total transaction value: billion yen (+19.6% increase / yoy) Operating profit billion yen (+45.2% increase / yoy). Reached the highest level of profit. Relative to the initial corporate plan, total transaction value and operating profit achieved 105.8% and 120.0% of the target, respectively. Online Shopping Mall Business Transaction value of the mall business: 99.2 billion yen (+17.4% increase / yoy) The number of shops : 621 shops (492 shops / March 2013) Annual number of purchasers (April 2013~March 2014): 3.21 million (2.48 million / FY2012 total) UU and CVR were up supported by website construction focusing on our original roots as well as by enhancing product supply. Steady increase in sales of ZOZOUSED Business operated by Crown Jewel Inc. (0.9 billion yen / previous term 2.3 billion yen / present term) Encourage client brands switching from purchased stock business to consignment sales business E-commerce Consulting Business Transaction value of e-commerce consulting business: 15.4 billion yen (+35.7% increase / yoy) The number of clients websites entrusted: 24 sites (25 sites / March, 2013) Steady performance of existing website entrusted. The sales volume derived from clients websites that have been entrusted since the preceding term contributed entirely to this term s transaction value. Profitability Operating profit margin (to total transaction value): 10.8% (the year-earlier period: 8.9%) Negative factors: Free shipping service offering and starting-up of new logistics facilities caused the increase in the degree of fixed cost burden. Positive factors: Revision of the promotion strategies FY2014 Corporate Plan Total transaction value: billion yen (+15.5% increase / yoy) Operating profit: billion yen (+10.7% increase / yoy) We are pleased to say that ZOZOTOWN marks its 10th anniversary this year.

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4 3 Consolidated income statement (includes transaction value) Item FY2013 FY2012 YoY Change(%) Target( ) Progress Rate(%) (million) Transaction value 114,674 95, % 108, % Net sales 38,580 35, % 36, % Gross profit 33,453 28, % - - (% Transaction Value) 29.2% 29.4% -0.2% - - SG&A 21,064 19, % - - (% Transaction Value) 18.4% 20.5% -2.1% - - Operating profit 12,388 8, % 10, % (% Transaction Value) 10.8% 8.9% +1.9% 9.5% - Recurring profit 12,429 8, % 10, % Net income 7,797 5, % 6, %

5 4 Drop in gross profit margin ratio -0.2bn Profit increase effect +5.5bn Transaction Value FY2012: 95.8bn FY2013:114.6bn Influenced by free shipping offer Increase of SG&A due to the increase of transaction value -3.8bn Revision of promotion strategies +3.4bn Outsourcing expense -0.7bn Others -0.2bn Increase of Variable expense due to the decline of unit price per shipment Operating Profit Operating Profit 8.5bn 12.3bn FY2012 FY2013

6 5 FY2012 FY2013 FY2012 FY2013 Current assets 20,655 26,970 Current liabilities 10,426 12,710 (million) cash and deposits 12,037 17,711 Deposit received for consignment sales 5,444 7,071 Merchandize inventory 1, Noncurrent liabilities 673 1,250 Noncurrent assets 3,217 6,217 Total liabilities 11,099 13,961 Tangible assets 1,538 3,232 Shareholders' equity 12,385 18,695 Intangible assets 725 1,150 Treasury stock -3,660-3,276 Investments and other assets 953 1,834 Total net assets 12,773 19,227 Total assets 23,873 33,188 Total liabilities and net assets 23,873 33,188

7 6 Item FY2013 FY2012 YOY Reasons for the change (million) Cash flows from operating activities 10,138 5,661 4,476 Second quarter net profit incresed (current term) Cash flows from investing activities -2,590-1,249-1,340 Investment in the new logistic facillities (current term) Cash flows from financing activities -2,139-6,369 4,229 Treasury stock acquisition (preceding term) Cash and cash equivalents at the end of year 17,711 12,037 5,673 -

8 7 Gross transaction value of new shops opened in FY2013 Online mall business ( purchased stock & consignment sales ) : 5.0 billion, (accounts for 4.4% of the total) 1,200 E-commerce consulting 1, ,100 Purchased stock 13.4% 1, Consignment sales % % 9.1% 4.7% 81.9% % ( bn) % 67.5% % 69.5% % 27.3% 73.5% 68.8% 7.5% 79.1% 19.0% 78.1% FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

9 8 YOY +20.4% E-commerce consulting Purchased stock Consignment sales 11/4-5 Shipment of charity T-shirts 350 million % 15.7% 75.0% 8.3% 14.9% 76.8% % 11.8% 79.0% 9.5% 10.3% 80.2% % 8.6% 79.6% % 9.8% 79.6% % 8.4% 79.0% % 9.5% 78.4% % 8.2% 78.0% % 8.7% 79.2% % 6.0% 79.7% % 4.7% 81.9% ( bn) 0 FY2011 1Q FY2011 2Q FY2011 3Q FY2011 4Q FY2012 1Q FY2012 2Q FY2012 3Q FY2012 4Q FY2013 1Q FY2013 2Q FY2013 3Q FY2013 4Q

10 9 39,000 36,000 Others E-commerce consulting 35,050 38,580 1,573 33,000 30,000 Consignment sales Purchased stock 31,806 2,662 2,389 2,976 4,016 27,000 1,917 24,000 21,000 18,000 15,000 17, ,801 1,397 1,065 10,635 16,943 20,968 25,324 12,000 9,000 6,000 3,000 8, ,685 5,448 10, ,540 6,563 6,147 10,014 10,701 10,282 8,716 7,667 ( million) 0 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013

11 10 12,000 10,000 8,000 6,000 4,000 6,749 Others YOY +8.2% E-commerce consulting Consignment sales Purchased stock 7,023 9,057 8, ,191 8,186 9,686 9, , ,972 6,101 7,640 5,001 6,902 5,170 5,531 3,312 4,684 5,249 3,459 4, , ,308 10, ,161 1,153 2,000 ( mllion) 0 2,611 2,503 2,731 2,436 2,657 2,122 2,290 1,646 1,987 2,195 1,899 1,584 FY2011 1Q FY2011 2Q FY2011 3Q FY2011 4Q FY2012 1Q FY2012 2Q FY2012 3Q FY2012 4Q FY2013 1Q FY2013 2Q FY2013 3Q FY2013 4Q

12 11 3,500,000 Number of total buyers = Active members and guest buyers who made at least one purchase within a year Guest buyers = Unique buyers who made a purchase without registering as a member Active members = Members who have made at least one purchase within a year Guest buyers 3,215,737 3,000,000 2,500,000 2,000,000 Active members 1,719,418 1,961,018 2,058, , ,012 2,234, ,937 2,352, ,519 2,489, ,815 2,657, ,579 2,802, ,080 3,000,173 1,037,802 1,178,934 1,500,000 1,370,295 1,515, , ,163 9,939 1,000,000 1,360,356 1,389,080 1,469,255 1,581,815 1,564,519 1,662,132 1,738,669 1,776,099 1,848,888 1,901,165 1,962,371 2,036, ,000 (members) 0 FY2011 1Q FY2011 2Q FY2011 3Q FY2011 4Q FY2012 1Q FY2012 2Q FY2012 3Q FY2012 4Q FY2013 1Q FY2013 2Q FY2013 3Q FY2013 4Q

13 Purchased stock Consignment sales (shops) 0 FY2011 1Q FY2011 2Q FY2011 3Q FY2011 4Q FY2012 1Q FY2012 2Q FY2012 3Q FY2012 4Q FY2013 1Q FY2013 2Q FY2013 3Q FY2013 4Q

14 13 Gender ratio Geographical distribution Age distribution Overseas 0.6% Kyusyu/Okinawa 9.1% Hokkaido 3.9% Tohoku 6.1% Chugoku/Shikoku 7.8% Kinki/Tokai 27.2% Kanto39.2% (Tokyo16.1%) Hokuriku/Koshinetsu 6.1%

15 14 50,000 Annual purchase amount Annual purchase pieces ,000 40,000 41,467 42,794 43,164 42,885 43,620 42,960 42,608 43,163 43,406 43,700 43,646 44, ,000 30,000 25,000 20, , , ,000 ( ) 0 FY2011 1Q FY2011 2Q FY2011 3Q FY2011 4Q FY2012 1Q FY2012 2Q FY2012 3Q FY2012 4Q FY2013 1Q FY2013 2Q FY2013 3Q FY2013 4Q 3.0

16 15 Average purchase amount per shipment = Transaction value / Number of shipments 18,000 Average purchase amount per shipment 16,000 Average retail price 14,000 12,536 12,397 14,158 12,381 12,522 11,842 13,421 12,389 YOY +0.4% 12,000 10,629 10,201 9,376 10,674 10,000 8,000 6,000 4,000 6,733 6,275 8,410 6,479 6,210 5,244 7,624 5,955 5,677 5,011 7,089 YOY -3.1% 5,773 2,000 ( ) 0 FY2011 1Q FY2011 2Q FY2011 3Q FY2011 4Q FY2012 1Q FY2012 2Q FY2012 3Q FY2012 4Q FY2013 1Q FY2013 2Q FY2013 3Q FY2013 4Q The transaction value and the number of shipments for ZOZOTOWN charity T-shirts in FY2011 1Q are not included. With this point in consideration, average purchase amount per shipment when above is included: 11,891; average retail price: 6,379

17 16 3,000,000 YOY +18.2% 2,720,874 2,500,000 2,302,530 2,054,821 2,367,837 2,183,933 2,000,000 1,725,515 1,636,004 1,774,060 1,500,000 1,268,643 1,243,217 1,487,595 1,347,913 1,000, ,000 (shipments) 0 FY2011 1Q FY2011 2Q FY2011 3Q FY2011 4Q FY2012 1Q FY2012 2Q FY2012 3Q FY2012 4Q FY2013 1Q FY2013 2Q FY2013 3Q FY2013 4Q

18 17 100% PC Feature Phone Smart Phone 90% 80% 70% 71.5% 75.1% 60% 60.4% 60.0% 58.8% 60.2% 56.5% 52.8% 52.2% 50.5% 50.1% 52.7% 50% 40% 35.6% 40.9% 43.2% 45.9% 47.1% 44.9% 30% 28.5% 24.9% 21.2% 22.6% 27.3% 29.0% 20% 10% 18.4% 17.4% 13.9% 10.8% 7.9% 6.3% 4.6% 3.6% 2.8% 2.4% 0% FY2011 1Q FY2011 2Q FY2011 3Q FY2011 4Q FY2012 1Q FY2012 2Q FY2012 3Q FY2012 4Q FY2013 1Q FY2013 2Q FY2013 3Q FY2013 4Q

19 18 14, % 12,000 Operating profit Operating profit margin (% transaction value) 12, % 16.0% 10, % 8, % 10.2% 10.4% 7,704 8, % 6, % 5, % 8.9% 10.8% 10.0% 8.0% 4,000 3, % 2,000 1,764 2, % 2.0% ( million) 0 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY %

20 19 (million) Item Amount FY2013 %Transaction value Amount FY2012 %Transaction value YoY change %Transaction value Increase decrease factors Payroll(*) 5, % 4, % 0.5% The number of employees in our group 480 as of March as of March 2014 Shipping 3, % 2, % 0.3% Due to the drop of merchandise price and decreased unit price per shipment (-11.1%, yoy) arising from free shipping service offer, burden ratio of shipping costs has risen. Payment collection 2, % 2, % 0.1% Promotion related expenses 2, % 4, % -3.1% Moving in line with the initial budget for the whole financial year (2.0% to the total transaction value) Advertising 1, % 2, % -1.4% Promotional activities for WEAR and LABOO Reward points related expenses % 2, % -1.7% Not taking noteworthy measures (1% reward point only) Outsourcing 2, % 2, % -0.8% Changed outsourcing scope required transfer of journal voucher to payroll Rent expense 1, % % 0.6% Annual lease expense for new logistics facilities is 1.25 billion yen (Accrues from Sep 2013) Depreciation % % 0.2% Increase of depreciation burden due to the new logistics facilities operation Others 2, % 1, % 0.2% Total SG&A 21, % 19, % -2.1% Payroll includes salaries, bonuses, legal welfare expenses, welfare expenses, provision for retirement benefits, provision for bonuses, provision for directors' retirement benefits and subcontracting payroll

21 20 4,000 Operating profit 3, % 3,500 Operating profit margin (% transaction value) 18.0% 3,000 3,064 2,873 3, % 2,574 2, % 2,500 2, % 12.0% 2,000 1, % 1, % 1,644 2,060 1, % 9.6% 8.5% 1, % 11.0% 10.2% 10.1% 11.2% 10.0% 8.0% 5.8% 6.0% 1, % % ( million) 0 FY2011 1Q FY2011 2Q FY2011 3Q FY2011 4Q FY2012 1Q FY2012 2Q FY2012 3Q FY2012 4Q FY2013 1Q FY2013 2Q FY2013 3Q FY2013 4Q 0.0%

22 7, % 6,000 SG & A(Quartely) Promotion related expense(% transaction value) 5,945 6, % 5,000 4,922 4,869 5,268 5,291 4,939 4, % 14.0% 4,000 3,255 3,502 4,130 4, % 10.0% 3, % 2, % 5.9% 6.7% 6.3% 4.6% 7.1% 5.4% 6.0% 4.0% 1, % 1.3% 2.0% 2.5% 2.2% 2.0% ( million) 0 FY2011 1Q FY2011 2Q FY2011 3Q FY2011 4Q FY2012 1Q FY2012 2Q FY2012 3Q FY2012 4Q FY2013 1Q FY2013 2Q FY2013 3Q FY2013 4Q 0.0%

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24 23 Business Plan for FY2014 YoY change(%) Transaction value (\million) 132, Net sales (\million) 41, Operating profit (\million) 13, Recurring profit (\million) 13, Net income (\million) 8, Earnings per share (\) Estimated dividends per share (\) 28 -

25 Transaction value Operating Profit Margin (% transaction value) ( bn) 0 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014(Target) 0.0

26 Start Today Group Total Transaction Value Target : 132,400 million (+15.5% year on year) Mall Business Transaction Value Target : 114,900 million (+15.8% year on year) Consignment Sales Business: 110,000 million ( +20.1%, yoy), Purchased Stock Business 4,900million (-36.1% yoy) Further improve the availability of inventories Further growth of ZOZOUSED Business (Sales target: 4,000 million yen) E-Commerce Consulting Business Transaction Value Target : 17,500 million (+13.5% year on year) Improve satisfaction level of the existing brand partners Not including the impact of Stores.jp PRO Business Operating Profit Margin The ratio of consolidated operating profit : 10.4 % (to the total transaction value, FY %) Increase of fixed cost burden arising from full-year new logistics facilities operation Increase in personnel (37 new graduates) Investment relating to promotional activities is planned to be about 2.0% of the total transaction value Investment relating to fulfillment and system to enrich website functions

27 Future Strategies

28 Start Today s mid to long-term target FY20XX term 250 Mid to long-term transaction value target Transaction value Transaction value Operating profit 500 billion 50 billion ( bn) 0 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014(Target) FY20XX

29 28 While ZOZOTOWN will continue to focus on the fashion e-commerce market, we will expand the depth and breadth of the areas of fashion we cover by continuing to offer e-commerce support to fashion brands.

30 Fashion-specific mobile app services with the concept WEAR FOR CONNECTION, enables people enjoying communication about fashion and referring to posted styling images. Opened on Thursday 31 th of October, 2013.

31 Same day shipping service started from 24 th March 2014 The order accepted before 9am is delivered in the night of the order date. The order accepted before 9pm (21:00) is delivered in the next midmorning. Same day shipping costs 500 yen (tax included) per order. This service is available in Tokyo, Kanagawa, Chiba and Saitama Prefecture (Accounts for 35% of total shipments). 30

32 Launched in March 2014 STORES.jp PRO enables to develop online shopping website easily and at low cost. A series of fulfillment operations are conducted at ZOZOBASE (This service enables to integrate inventory information between retailer s own e-commerce sites and ZOZOTOWN)

33 Reference Data

34 employees (average age 28.2) 2,026 high fashion brands 6,481 shareholders 6,057 shops across Japan 3.21 million fashion savvy consumers

35 Japan's Largest Online Retailer of Apparel and Accessories - ZOZOTOWN ZOZOTOWN One of Japan s largest online shopping sites for fashion items 621 stores offering 2,026 brands. At any given time, more than 210,000 items are available with 1,300 plus new items added a day on average. Store finder function for several boutiques in Japan is also available Users can comment on merchandise and share information via social networking sites such as Twitter, Mixi, GREE and Facebook. Systems, design, logistics and other e-commerce functions retained in house. The new online shopping mall LA BOO targeting the teens-to-20s girls fashion market LA BOO LA BOO is a mall-styled online shopping website where more than 100 online stores of apparel brands that are popular among women in teens and twenties such as moussy, snidel, EMODA, CECIL McBEE and TOPSHOP gather. Opened on Wednesday 25 th of September, 2013 LA BOO トップページ

36 Store Planning & Development Business (Purchased Stock) We operate 16 original stores such as ZOZOEPROZE and ZOZOPHAGGE on ZOZOTOWN, which offer products we purchase from various brands. Sales = Transaction value generated by each store Store Operation & Administration Business (Consignment Sales) We operate 605 online stores such as United Arrows and BEAMS on ZOZOTOWN, MARC JACOBS on ZOZOVILLA and LA BOO on a consignment basis. This does not involve any inventory risks. Sales = Transaction value of each store x commission rate B to B Business We help develop and operate online shops on behalf of various brands such as United Arrows and Onward. We currently provide back-end service for 24 stores. Sales = Transaction value of these online shops x commission rate Store Planning & Development Business 6.7% B to B Business 13.4% Store Operation & Administration Business 79.9% *Our total sales volume consist of above sales and that of other businesses including the initial cost for brands consignment shop opening, ZOZOPREMIUM (premium membership fee based services), and ZOZOCARD (partner credit card fee revenues). (Transaction value for FY2013)

37 This material has been created for the sole purpose of introducing the company s business activities, and not for soliciting investment. The business forecasts and the future outlook herein described are based on information currently available. They are subject to uncertainties and therefore change, thus actual results may differ.

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