This is Yusuke. So we would like to begin FY 2024 second quarter Q&A session for institutional investors for ZOZO. Sawada, Yanagisawa. Sawada, Yanagisawa. We'll also take part in the Q&A session, as well as the Director and COO Hirose, Fuminori, as well as the VP of Strategic Planning and Development Department, Yusaku Kobayashi. And we plan to close the session at 6:20 P.M. If you have any questions, please raise your hand. And when called upon, please unmute yourself and share your name as well as the company that you belong to before asking your question. Mr. Kanamori, please ask your question. Ms. Kanamori, please ask your question. I have two questions about your SG&A payroll. You talked about the logistics. I think the productivity dropped last quarter, but it has improved significantly, but did you not have great visibility on the impact? And is that why you haven't really included that in your plan, or are you seeing more impact that surpasses your plan? And also, is it complete or is it close to ideal, so is the productivity close to ideal or second half or next fiscal year? Can we expect even further improvements? That's the first question. Ms. Kanamori, thank you very much. Yanagisawa will answer that question. With respect to the productivity, we do incorporate that into our plans, but the first half, we saw greater results than we expected. Second half onwards, honestly, we don't know yet whether our actual performance will outpace our plan. We don't know at the moment, but it depends on the sales status as well as when we get the inventory, how the FW season will progress. So it depends on various factors. What exactly outpaced your plans? What has contributed to the favorable results? What improvements have we seen? We don't know what exactly. It's a lot of small efforts, so it's difficult to summarize. And also, second question, within the SG&A logistics centers, you talked about how some costs increase when the logistics centers are launched, but Q on Q doesn't seem like you saw an increase in these other costs. Ibaraki 5 was up and running since August, but it doesn't have a shipment function. So you didn't have to increase temporary. You didn't see a temporary rise in cost because it doesn't have the shipping function? Or have you been able to save costs? Please let us know. I think Kobayashi-san can take that question. Thank you. Thank you very much for your question. I will answer that. Ibaraki 5, as you mentioned, it doesn't have a shipping function. So Ibaraki 4, compared to Ibaraki 4 that we launched last year, temporary costs, spot costs are lower for Ibaraki 5. And the first and second quarter, when we compare, the costs are similar. And the reason why they're similar is because from the first quarter, we have made purchases of these miscellaneous items that we needed. So we were preparing in advance, purchasing these items behind. So that's why there's no significant difference between the first and second quarter. Hirose-san, I would like to ask you a question about the advertising business. The advertising business, do you expect the second half will be increasing by 23% rather than 18% in the first half? But do you foresee any changes from the initial plan, any improvements that you have made in the advertising business? Thank you for your question. As I mentioned in the previous earnings briefings, we changed the click-through fee. And other than that, search results, we actually changed the number of ads we can show when people search for goods. So it's not really some of these initiatives we implemented earlier and later as well. So it has fluctuated slightly, but we are on track as per our initial plan. So if you implemented these initiatives earlier, then that means that the numbers should be slightly higher. So it's just earlier, so that's why we're still on track. It was included in the plan to start with. Yes, that's right. Thank you, Kanamori-san, for your question. Next, Kazahaya-san, please ask your question. Thank you. My name is Kazahaya. I have two questions. I couldn't join in the beginning. I'm sorry if you already covered this, but ZOZOCOSME update, could you update us on ZOZO Cosmetics? Thank you. Hirose-san can actually answer that. First quarter, it was the case in first quarter. It's growing steadily. We talked about new shops joining. Kanebo has joined us, and so we're steadily welcoming new brands. So we're making great progress, and we're on track with our plans. In terms of purchases, or what about users and the average retail price? The number of users, buyers are growing steadily, and there are more frequent buyers as well, so it's growing steadily because of that, so you're doing well in terms of new user acquisition, and repeat rate is also on track as well as you planned. Yes, and also, I don't know if you can answer this, but PGA TOUR, so you finished your sponsorship, but next year, do you want to use the budget for something else? Is there something else that you would like to do? That's my second question. Thank you. I can answer that question. PGA finished our sixth year in the six-year contract, and next year, we haven't decided anything regarding PGA as well, so please just bear that in mind, and also, on the other hand, there is a possibility that we wouldn't do the tournament. So we're still working on the budget, and we are going to explore various avenues of possibilities. So basically, our question is, it's to be decided, or our answer is to be decided. PGA hasn't announced anything. Is that why? Yes. And the championship continuation of the championship, I think it's better if you ask the PGA about that question. From your point of view, internally, you've already decided what to do. Is that right? That's also something we cannot disclose at this moment in time. That's it for me. Thank you very much. Kazahaya-san, thank you very much for your question. Next, Yamaoka-san, can you ask your question? Nomura Securities, Yamaoka, thank you. I have two questions as well. First one is about the GMV. Of course, ZOZOTOWN is operated on a consignment basis, but it seems like it's trending lower than your plan. But you mentioned that September was hot and therefore sluggish, but I think recently you talk about the weather quite often. Can we just assume it's the weather, or are there other challenges outside of the external factors that you are facing? Thank you very much for your question. So I can take that question as well. Of course, we can't just talk about the weather all the time, but we are still seeing significant impact from the weather. And from my point of view, fall is coming one month later this year. And last year, it was late too, but it was even one month later this year. So September, so in August, people buy summer fashion, but this September was similar to August, especially brands. Of course, based on their experience last year, they did, of course, adjust their merchandising. So they weren't really launching a lot of their fall winter products in September. Right now, we're finally starting to catch up on the fall winter inventory now. So that's a situation that we've encountered. So the ZOZOTOWN second quarter was slightly weaker, but it's mainly just from September, impact from September. But October, November, December, we need to focus on how we can make up for the shortage. We want to make sure that the inventory, we can move a lot of the inventory because when it comes to February in the next year, it's going to be harder to sell fall winter inventory in February. So you have implemented initiatives that you actually talked about in the past, but it was just hotter than you expected. Is that right? Yes. Thank you. Second question. In the earnings briefing, you talked about variable costs. You have variable cost savings in terms of ad spend as well as payroll. Can you talk about how much surplus you have now that you'll be spending in the second half? Yanagisawa can take that question. In terms of variable costs, as we mentioned, we didn't spend a lot of the promotion, and we also saved on payroll as well as the shipping expenses. We can't talk about the exact costs, but in terms of promotion, we did expenses. We are looking at the annual costs. Whatever savings that we have in the first and second quarter, we will be spending in the third and fourth quarter. In that sense, annually, it won't have impact. Kanamori-san asked the question earlier about logistics, but we did improve productivity, but the improvement in productivity was higher than we expected. That's why we have seen savings in that respect. In terms of shipping fees, we thought that the AOV was going to be flat year on year, but in the first half, we've seen higher AOVs. That is why we didn't spend as much on shipping as we expected. In terms of fixed costs, it's consignment and employee payroll, but we didn't see much fluctuation in terms of fixed costs. Fixed costs payroll, we didn't hire as many people as we thought we would, so it's slightly lower. We also didn't have to pay as much on outsourcing. That's the background. In that respect, if the external factors didn't change, it's promotional fees. You're going to spend whatever surplus in the second half, correct? So annually, it won't change. Yes. That's it. Thank you. Thank you very much for your question, Yamaoka-san. Next, Murata-san, please ask your question. Thank you. J.P. Morgan Murata. Thank you very much. I have two questions as well. First one is about the promotional initiatives. First quarter and second quarter, I believe, you had ZOZO Week and also free shipping campaigns as well, which resulted in very cost-effective or efficient promotions. You saw AOVs increase as well as a result. But on the other hand, these initiatives, if you do too much, people may wait for those campaigns to happen. So of course, you mentioned before that you can't do too much of those campaigns, but I guess right now, it's probably the most efficient frequency. Is that right? And going forward, even if you don't do a lot of free shipping campaigns, you have other promotional initiatives, advertising as well, to further grow your GMV. Do you have any other initiatives in mind? Thank you. I can take that question. In terms of promotional costs, of course, we're on track in terms of spending. We wanted to improve our efficiency further, but basically, in terms of efficiency, it's on track. If we do too much, of course, the effectiveness may worsen slightly. So we've stepped on the accelerator around 70%-80%, basically. That's the right way to put it, I believe. And in terms of new promotion activities, initiatives, we are thinking every day about new initiatives, trying to develop new initiatives. We can have sales per customer segmentation. This summer or fall, we've implemented that, and we're testing segmented sales and also personalized promotions as well. We've put a lot of effort into. On the other hand, there are customers who bought maybe two years ago but have not bought anything since. We also are sending out direct mail as well. We're also testing primitive methods as well. We're trying to test different methods. We develop new initiatives, test them as well, but at the moment, we don't have any initiative that will enable us to exclusively capture new users, but it's just really a lot of grassroots activities. You mentioned ZOZOTOWN GMV. The climate change impact you've seen, but going forward, of course, we may be experiencing extremely warm winters going forward. But within those harsh conditions, I think the key would be to undertake very efficient promotions to overcome the climate change. Right? I did mention in my presentation to implement recommendations per region based on the weather report. There are unique initiatives that we can implement because we're selling clothing on the internet. We can try to implement those initiatives to overcome climate change. The second point is about category expansion. You mentioned cosmetics earlier, and you're on track, you mentioned, but I'm sure you want to help it grow even more. But are there any challenges or anything that you think is working well? And also over the mid to long term around apparel, other miscellaneous goods, interior, maybe possibilities. But what other categories are you thinking about adding? Are you preparing for them? Do you have a schedule? Please share updates in that respect. Thank you. At the full-year earnings briefing, we want to share our thoughts around there. Right now, we're still planning at the moment. So if they say that that works, or if we decide that that's going to work, then we can, six months later, we'll be able to share something. So I look forward to your announcement six months from now. Thank you. Murata-san, thank you very much for your question. Kawano-san, please ask your question. Can you hear me? This is Kawano. Yes. Yes. Thank you. I think many questions have already been asked, but you talked about AI today during the earnings briefing. In one year, it seems like you've developed like 22 or 23 AI tools. I think I saw some news about that, but personalized recommendations. Apparel brands have their own style. Since you have a wide range of products, you are well equipped to offer AI personalization. You mentioned different case examples, but how can you measure the impact, or can you share with us the impact that we can see immediately and how much impact? Personalized recommendations as well. How many people are trying to do that? It is a little bit of a vague question, but I wanted to know a little bit more about AI. Thank you. First of all, in terms of the impact, we have a lot of very detailed numbers. So this is unique to an internet company, but we talked about the personalization modules, and we changed it, and we do A/B testing, and we look at the conversion rate to see if it goes up. And so we look at those KPIs, and GMV is quite significant already for us. So if the conversion rate improves by a couple of percentage points, of course, it does have a dramatic impact on our GMV. So we've seen significant results, actually. And it's not just the top screen search results. So let's say you search for tops, and what order we show the products in. On a daily basis, we are customizing and personalizing that. Version 20-something is our personalized logic right now. So we're not saying, "Let's do up something," and starting. We are fine-tuning, and it's an ongoing process. And of course, we're using machine learning as well to do recommendations. So it's embedded in many places within ZOZOTOWN. So with all of those adding up, we can't say exactly, but we see double-digit billions of impact due to machine learning and AI. And you asked about another thing? Oh, yeah. Other companies using AI. Of course, we want to do something other companies cannot. So we have a lot of different brands and different products, and of course, it's valuable to have so many products and so many customers. So we are uniquely positioned, and we also have data that only we have. So that's very important to us. So even if data that other customers have, depending on how you cook the data, of course, you can utilize it for different purposes. But we're focused more on our strength is actually focusing on the data that only we have. For example, you talked about weather news changing what you show based on the climate or the location. So if you're at the golf course, if I'm at the golf course and you recommend something, I might buy something as well. So what you talked about today, you've already implemented, or this is something you're going to do. We have implemented already. This started in the summer already, but it's still just being tested right now. So of course, we're discussing whether we should embed this into the core logic or not. Thank you. Kawano-san, thank you very much for your question. Next, Nagao-san, please ask your question. Thank you very much for letting me ask my questions. First question is about the first half, LY Commerce GMV. I believe that you've far surpassed the plan, but for the second half, if you know how it will trend, please let us know what will happen in the second half. Hirose can answer that question. LY Commerce. As Yahoo! Shopping, they are continuing. They're going to continue the promotions. So we believe that we can make steady progress or growth, but they haven't decided exactly what kind of promotions. But we will collaborate closely with LY so that we can achieve our plans. Second question, maybe more for Sawada-san, I believe, but WEAR traffic. I'm looking at the external data, but it seems like the WEAR traffic has come back significantly, and this will contribute to advertising and user acquisition and also sales via WEAR. But can you talk about the WEAR growth strategy that you're thinking of now? Thank you very much. As you mentioned, with respect to WEAR, it's been 10 years since we released it, and we did renovate the app on that occasion, and it's come back significantly. WEAR was dropping until then, but right now it's made a comeback. How to utilize WEAR first? Of course, directing traffic to ZOZOTOWN. After the renewal, during the renewal, we focus on ID integration. So we wanted to make sure that we have people who can use ZOZO ID to enter WEAR using ZOZO ID. We improved the UI to encourage people to do so. So we wanted to direct traffic from WEAR to ZOZOTOWN and have people make purchases on ZOZOTOWN, and that is actually happening. So we've seen an increase in that respect. Over the midterm, of course, we talked about the niaul ab or Niau from your best style, but we want to transform into something that we could call a Niau app. So on the WEAR, sometimes people don't know what to wear, and it's hard to describe. So we want to be able to address people's concerns and develop or transform WEAR into a fashion agent. We've only done like 10%-20% of that. So we want to continue to update on a daily basis, and it's mainly going to be the back-end data and technology update. So through those updates, we want to create something that will enable people to experience what looks best for them. Oftentimes, we're asked that maybe we can do that on ZOZOTOWN. We should do that on ZOZOTOWN. Of course, we want to implement something similar for ZOZOTOWN, but we talked about machine learning and AI earlier as well. It's complicated, and we already have a huge engine, and we can't really make tweaks here and there. So we want WEAR to become an app that will offer people or recommend people their best looks and then also apply the same changes to ZOZOTOWN. We believe that is a new growth engine that's not available in the market, so I have high expectations. And lastly, there are BNPL regulation issues now. So BNPL ratio, and also in the media, they're talking about issues with a younger audience, younger buyers. So can you talk about any risk in that respect that you're aware of at the moment? Trying to identify the risks at the moment, but there's nothing that we can talk about right now at the moment. Thank you very much. Understood. Nagao-san, thank you very much for your question. So it's past time, so I would like to conclude today's Q&A session. Thank you very much for joining us.