Using New Technology to Create a Better Consumer Experience - Presentation by Next Co at the Property Portal Watch Conference - AMS 2015 - Keizo Tsutsui

1. Designing Delightful Encounters
Using New Technology to
Create a Better Consumer
Experience
Property Portal Watch Conference
Amsterdam - 8 October 2015
Keizo Tsutsui

2. Size of Japanese Real Estate Advertising Market
151.6
234.3
49.9
15.9
36.336.3
43.3
101.0
34.6
80.8
Total
385.9
billion yen
Rental
65.8
Exisitng
homes
73.3
New
single-
family
115.4
New
condo
144.2
Online
advertising
Offline
advertising
80

3. 10,319
11,962
14,690
18,165
26,142
1,485 2,113 2,781 3,191
5,189
14.4%
17.7% 18.9% 17.6%
19.7%
28.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Revenue EBITDA EBITDA margin
Revenue and EBITDA continue to grow
Continuous Growth of NEXT
Unit：million of JP.Yen
〜
J-GAAP IFRS
2016.3
(Forecast)
2015.32014.32013.32012.3
› Improve advertising ratio
› Maintain personnel expense
rate
› Offset other expenses with
increased revenues
Key points
2
(Operatingprofits
before depreciation)

4. Competitors
3 ,0 0 0
4 ,0 0 0
5 ,0 0 0
6 ,0 0 0
7 ,0 0 0
8 ,0 0 0
9 ,0 0 0
1 0 ,0 0 0
1 1 ,0 0 0
1 2 ,0 0 0
0
1 ,0 0 0 ,0 0 0
2 ,0 0 0 ,0 0 0
3 ,0 0 0 ,0 0 0
4 ,0 0 0 ,0 0 0
5 ,0 0 0 ,0 0 0
6 ,0 0 0 ,0 0 0
#1 in Number of Properties Listed
Over 5 million listings, 2x of #2 player
(*1)
SUUMO Yahoo at
Home
1.92M
2.25 M
1.82M
(*1) Total properties listedfor rentals and real
estate sales as of June 2015. NEXT data.
5.15 million properties
6,791
buildings
Rentals and sales
Newly-built condos
3

5. Market Cap growing with the increase of non-Japanese investors
[Zillow,US]
Sales 40.4
EBITDA 6.1
Net profit ▲5.4
[REA group,AU]
Sales 39.6
EBITDA 20.4
Net profit 13.5
[Rightmove,UK]
Sales 32.3
EBITDA 23.8
Net profit 18.6
[Soufun,CN]
Sales 87.2
EBITDA 41.3
Net profit 31.4
[NEXT,JP]
Sales 24.1
EBITDA 5.1
Net profit 2.8
Market cap
511.2
Market cap
580.7
Market cap
348.6
Market cap
642.5
Market cap
109.9
Market Cap Comparison
[Zoopla,UK]
Sales 15.5
EBITDA 7.6
Net profit 5.1
Market cap
195.5
[Recruit Sumai Company, JP]
Sales 83.9
4
ended December,2014
ended December,2014
ended December,2014
ended December,2014
ended March, 2015
ended March, 2016[forecast]
Note1 Calculated from the IR materials of each company presentation
Note2 The stock of July 31, 2015
Note3 Exchange rate $1=124.09 yen, GBP1=193.61yen, AUD1= 90.65yen
Unit : billion yen
ended June, 2014

6. Differences between HOME‘S and SUUMO (Recruit)
Item HOME'S (NEXT) SUUMO (Recruit)
Number of
properties
(January 2015, our investigation)
5.19 million properties 2.59 million properties
Sales 26.1 billion yen
Online only
83.9 billion yen
Online + Offline
Fields of strength
Rental &
Existing homes
New Condominiums
Strengths
Vision management
Web technology
Web marketing
Capital strength
Sales strength
Cross-channel
(Printed, Web, Counter)
Company history
Established 18 years ago
Founding president
Established 54 years ago
5th president
5

7. Our business model:
Cost Per Lead
6

8. 7
We believe CPL is a better business model
With the CPL model, marketing spend leads directly to growing sales
Marketing spend leads directly to
growing sales Growing sales requires negotiating
on raising the posting fee
Pay-per-inquiry-based billing
structure model
Pay-per-posting-based billing
structure model
Sales
growth
Marketing
Spend
Increase
users
Marketing
Spend
Increase
users
Negotiations
on price
increase
Sales
growth

9. Price table for Japanese clients
Inquiry based pricing model
Monthly basic fee
Number of
inquiries
I n q u iry fee
Rental ￥10,000
1 to 15
Monthly rent price of the property inquired
× 5.5％
16 -
Monthly rent price of the property inquired
× 4.0％
Buying/Selling
and Investment
￥10,000
1 to 15 Sale price of the property inquired × 0.05％
16 - Sale price of the property inquired × 0.03％
Custom-Built
Houses
￥20,000 Number of inquiries × ￥15,000
Listing based pricing model
List price Premium plan
New Condominiums ￥100,000 ＋50,000yen
New Houses ￥30,000 ＋20,000yen
HOMEʼS Nursing care
Service
￥16,000〜24,000
Contract based pricing model
Monthly basic fee Tender fee Contract fee
Renovations ￥10,000 ￥500 per tender Construction price × 6.0％
8

10. Our global platform
9

11. 10
NEXT Group serves 46 countries
Trovit acquisition expanded NEXT Group service area to 46 countries
Indonesia
Japan
Taiwan
Thailand
Arab Emirates
Argentina
Australia
Austria
Belgium
Brazil
Canada
Chile
Columbia
Czech Republic
Denmark
Ecuador
France
Germany
Hong Kong
Hungary
India
Indonesia
Ireland
Italy
Japan
Malaysia
Mexico
Morocco
Netherlands
New Zealand
Nigeria
Pakistan
Peru
Philippines
Poland
Portugal
Romania
Russia
Singapore
South Africa
Spain
Sweden
Switzerland
Taiwan
Thailand
Turkey
UK
US
Ukraine
Venezuela
aggregator model Portal model

12. Trovit is world’s largest aggregator
Clickouts
150 M
Service
area
46countries
Listed information
160M
Help anyone in any country to find a home, car, job, ….
↑For app, 15,000/day downloads
11

13. Trovit’s monthly user is more than most of portals
Trovit’s monthly user is comparable with world’s top portals
Zillow Trovit Trulia Rig htm ove REA soufun
Source:SimilarWeb
Trovit
Homes
Jobs
Cars
12

14. New Technology
13

15. HOME’S Data
Real Estate
Agent’s Data
Solution (problem solving)
14
DMP Service “NabiSTAR “
Real estate-focused DMP* service for agents and condo developers
Our DMP
“NabiSTAR”
Sales growth
Cost Reduction
Personalize
Increase in
requests
for
materials
/
Increase in
visitors
/
Increase in
closing
rates
Customer Data
(Visits and Requestfor
Materials)
Audience Data from
Each Company’s
Website
AudienceData
Data Integration
Ad Placement
Website Content
Optimization
Email
Delivery
Values Offered
* DMP＝Data ManagementPlatform

16. “HOME’S LIVE” Web communication system
(1) Compatible with a broad range of devices, including PCs, smartphones, and tablets
(2) Prevents loss of records through automatic recording
(3) Items displayed on screen
(4) Allows multiple people to log in simultaneously
(5) Reminder emails sent in accordance with schedule configured in advance
Distinguishing features of “HOMEʼS LIVE”
Plans call for initiating a social experiment in online explanation of important
matters involved when concluding a real estate contract.
15

17. HOME’S Price Map (service name TBD)
Scheduled to be rolled out in autumn 2015
Using the property data of HOME’S, Japan’s No. 1 site in the number of properties listed, to reveal
property reference prices in a “crystal clear” manner!?
Image of HOME’S Price Map
Press release:HOME’S Crystal Clear Property Price Map
16

18. O2O (Online to Offline) Tracking
*INFOSOUND, developedby Yamaha Corporation, is a technology that converts digital information intoacoustic signals before transmittingthem
Conclude
contract
Visit store &
property
Actions able to be tracked so far Actions newly able to be followed
2
1
Infosound
43
♪
17
Begin
considering
Compare
and
consider
Inquire
Maximize
the number
of contract
conclusions
Install a small-sized speaker in the store
Detect the customer’s store visit by
using acoustic communication
technology
Award Rakuten Super Points to the
customer for making a store visit and
concluding a contract
Analyze the user’s actions
1
2
3
4
Track uses who visit the Broker/Condo Developer offices

19. O2O (Online to Offline) Tracking
With this ultrasound technology, a user can “check-
in” only inside the Agent’s office.
With other technologies, a user can check-in outside
the office and therefore can fake the “visit.”
18

20. Ricoh THETA 360-degree Camera enabled pages
Agents take a photo with THETA, then upload onto HOME’S
RICOH THETA

21. Ricoh THETA 360-degree Camera enabled pages
Users can get 360-degree view of the room
20
Users can “move around” in the 360-degree images

22. Smart Lock/Key - Unlocking with Smartphone
Launched “Smart Viewing” on a trial basis for real estate companies.
Open lock with a smartphone.
① ②
③[Smart Viewing System]
• Reserve viewing
• Apply for key.
• Management company approves application.
• Use smartphone as key.
21

23. 22Copyright(c) NEXT Co., Ltd. All Rights Reserved.
“Awesome Scale”
Uses “Tangible UI” and Robotics – even senior
citizens can search properties
1. Put “rent fee” weight and
“conditions” weight to plate.
2. Start searching automatically.
3. If there are houses you want,
display the houses on screen.

24. 23
Deep Learning
System can identify what is shown in the photos.
Mirror
Wash Basin
Toilet seat
Current accuracy is 80 - 90%

25. GRID VRICK
Fast, Easy and Very Intuitive
Put some bricks Generate 3DCG Walk it through!

26. 25
Home-building Simulation
Just putting together Lego® blocks allows one to create a
room in a three-dimensional virtual space
Real-time reflection
Have a block arrangement change
reflected in the floor plan on a real-
time basis
(1) Allows any users to create a floor
plan easily
Place Lego® blocks to create a floor
plan
(2) Decide on where to put doors,
windows and furniture
Distinguish among different item
categories on the basis of block color
and shape

27. Interior Decoration Simulation
With a single click, user can compare floor materials and
wallpapers, as well as furniture
✔ Click
✔ Click✔ Click
Replace the wallpaper
Replace the sofa
The user is allowed to alter the room fixtures
and interior according to his/her preference
Wearing the “Oculus Rift” device enables the user to have a walk-through experience
of the completed room

28. Hardware Application
+
Coming soon in December