Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are already predicting a completely new world in one way or another, but the reality is likely more prosaic.What is certain is that the Japanese consumer economy will recover and it is just a question of when.The most likely effect of the crisis is that it will catalyse a period of change already in process and which also happens to be one of the most dramatic and far-reaching seen so far in retail.But there is one trend that may well reverse as more businesses go under or contract, providing relief for many retailers: the labour shortage and rise in wages.The following offers an in-depth review of both the impact of the current crisis and implications as well as the long-term trends in Japanese retailing, providing insight into which sectors, formats and specific companies will win and lose in the next three years.For a short read, we provide the conclusions and winners and losers first.

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are already predicting a completely new world in one way or another, but the reality is likely more prosaic.What is certain is that the Japanese consumer economy will recover and it is just a question of when.The most likely effect of the crisis is that it will catalyse a period of change already in process and which also happens to be one of the most dramatic and far-reaching seen so far in retail.But there is one trend that may well reverse as more businesses go under or contract, providing relief for many retailers: the labour shortage and rise in wages.The following offers an in-depth review of both the impact of the current crisis and implications as well as the long-term trends in Japanese retailing, providing insight into which sectors, formats and specific companies will win and lose in the next three years.For a short read, we provide the conclusions and winners and losers first.

After Covid: The Future for Japanese Retail: Winners & Losers

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Founded in December 2012 in Roppongi Tokyo, BASE Inc is an e-commerce platform, payment services provider and also a SME funding services provider. The company’s main business “BASE” is an e-commerce platform which allows businesses and individuals to create online shops. BASE is considered to be one of the most user-friendly platforms enabling businesses to go online in a matter of hours. The creation of a net shop using BASE is free of charge and BASE currently has more than 800,000 net shops in their network. BASE is monetised through its payment platform and the network has close to 27,000 online shops using BASE’s payment functions. BASE charges 3.6% of the transaction value + ¥40 per transaction as a settlement fee and another 3.0% as service fee. Apart from the transaction processing revenues, BASE also sells customisable online shop templates and App plugins, however, they only contribute to about 10% of revenues.The company launched its second online payment service “PAY.JP” in September 2015. It provides payment processing services to web-based service providers and online shops (excluding BASE shops). “PAY.JP” is also a simple system like BASE and it can be introduced and maintained easily without any specialised knowledge in web design.“YELL BANK” is the latest service introduced by BASE Inc. It provides funding to BASE online shops. Using store data, BASE Inc forecasts future sales and funding requirements for online shops and by taking future sales of the online stores as collateral, YELL BANK provides the online shops with required funding.The company filed for an IPO to raise ¥600m-680m and it is expected to debut on the Mothers Board of the Tokyo stock exchange towards the end of October 2019.<table class="table table-striped"><tbody>
<tr>
<td>New Shares Issued</td>
<td style="text-align: right;">0.52</td>
<td></td>
</tr>
<tr>
<td>Existing Shareholders</td>
<td style="text-align: right;">6.70</td>
<td></td>
</tr>
<tr>
<td>Overallotment Option</td>
<td style="text-align: right;">1.08</td>
<td></td>
</tr>
<tr>
<td>Total Shares Sold in the IPO</td>
<td style="text-align: right;">8.31</td>
<td></td>
</tr>
<tr>
<td>Book Building End</td>
<td style="text-align: right;">10/16/2019</td>
<td></td>
</tr>
<tr>
<td>Price Range</td>
<td style="text-align: right;">¥1,150</td>
<td style="text-align: right;">¥1,300</td>
</tr>
<tr>
<td>Size of the IPO</td>
<td style="text-align: right;">         9,558</td>
<td style="text-align: right;">       10,805</td>
</tr>
<tr>
<td>EV</td>
<td style="text-align: right;">       16,616</td>
<td style="text-align: right;">       19,517</td>
</tr>
<tr>
<td></td>
<td style="text-align: right;"></td>
<td style="text-align: right;"></td>
</tr>
<tr>
<td>EV/EBIT</td>
<td style="text-align: right;">n.a</td>
<td style="text-align: right;">n.a</td>
</tr>
<tr>
<td>EV/Sales</td>
<td style="text-align: right;">           7.06</td>
<td style="text-align: right;">           8.30</td>
</tr>
</tbody></table><div class="content-caption"> Source: Company disclosures
</div>

Founded in December 2012 in Roppongi Tokyo, BASE Inc is an e-commerce platform, payment services provider and also a SME funding services provider. The company’s main business “BASE” is an e-commerce platform which allows businesses and individuals to create online shops. BASE is considered to be one of the most user-friendly platforms enabling businesses to go online in a matter of hours. The creation of a net shop using BASE is free of charge and BASE currently has more than 800,000 net shops in their network. BASE is monetised through its payment platform and the network has close to 27,000 online shops using BASE’s payment functions. BASE charges 3.6% of the transaction value + ¥40 per transaction as a settlement fee and another 3.0% as service fee. Apart from the transaction processing revenues, BASE also sells customisable online shop templates and App plugins, however, they only contribute to about 10% of revenues.The company launched its second online payment service “PAY.JP” in September 2015. It provides payment processing services to web-based service providers and online shops (excluding BASE shops). “PAY.JP” is also a simple system like BASE and it can be introduced and maintained easily without any specialised knowledge in web design.“YELL BANK” is the latest service introduced by BASE Inc. It provides funding to BASE online shops. Using store data, BASE Inc forecasts future sales and funding requirements for online shops and by taking future sales of the online stores as collateral, YELL BANK provides the online shops with required funding.The company filed for an IPO to raise ¥600m-680m and it is expected to debut on the Mothers Board of the Tokyo stock exchange towards the end of October 2019.

New Shares Issued
0.52



Existing Shareholders
6.70



Overallotment Option
1.08



Total Shares Sold in the IPO
8.31



Book Building End
10/16/2019



Price Range
¥1,150
¥1,300


Size of the IPO
         9,558
       10,805


EV
       16,616
       19,517







EV/EBIT
n.a
n.a


EV/Sales
           7.06
           8.30

 Source: Company disclosures


BASE Inc IPO: Excellent Customer Retention Justifies High Promo Costs

Japan

BASE, Inc. offers internet based services. The Company provides net shop creation, shopping application development, online payment development, and other services. BASE provides its services throughout Japan.

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BASE Inc (4477 JP)

After Covid: The Future for Japanese Retail: Winners & Losers

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

After Covid: The Future for Japanese Retail: Winners & Losers

No one really knows what will happen after the initial shock of the coronavirus fades away. Many observers in Japan, expert and otherwise, are...

Michael Causton

BASE Inc IPO: Excellent Customer Retention Justifies High Promo Costs

Founded in December 2012 in Roppongi Tokyo, BASE Inc is an e-commerce platform, payment services provider and also a SME funding services provider....

Oshadhi Kumarasiri