■Business model

1. On-demand economy business for sharing human skills

The Gig Works ＜2375＞ business model is characterized by being a “matching platform centered on IT-related work.” We receive requests for a wide range of jobs, and since our establishment, 6,246 companies have received jobs from over 1,000 companies every month. The company excels at IT-related (installation, trouble handling, system development, etc.), partly because it started as a “PC tutor,” but currently there is an increase in things other than IT-related (sales, call centers, investigations, etc.). IT-related examples include PC and tablet kitting, antenna base station installation, bus stop construction (IoT compatible), etc. There are many requests from large companies such as major telecommunications companies, major SI companies, and foreign-affiliated PC companies, and the company's strength is that it has a continuous pipeline. Examples other than IT-related include store development operations for food delivery service companies, sales of PCs and home appliances at stores, multilingual contact centers (1,112 seats), mystery shoppers (undercover investigations), product recalls, administrative processing of subsidies and grants, public opinion polls, and the set-up of election counting equipment. In particular, there are many cases where there is no recipient for short-term concentration (one-off short-term, immediate response) requests on a national scale unless it is the company, increasing the company's value of existence. Until now, clients have mainly been relatively large corporations and organizations, but the number for small and medium-sized enterprises and individuals is also increasing.

Since its establishment, the company has performed over 7.51 million matches and has supported diverse work styles. The work is carried out by over 0.1 million registered gig workers along with the company's employees. The number of workers (unique workers) that were put into operation in the 2nd quarter of the 2024/10 fiscal year will be 3,404. In addition to the fact that there are many highly skilled freelancers among gig workers, they are not employed all the time, so the company's fixed cost burden can be suppressed as much as possible. For gig workers, since the company operates and receives various jobs from companies, there is an advantage that they can work in a lifestyle that suits them, and they can also update their skills.

What is important as the company's role as a platformer is “management of skills, achievements, and evaluations of registered gig workers” and “matching.” Regarding “management of skills, achievements, and evaluations of registered gig workers,” various ideas have been devised, such as promoting skill improvement by supporting education and performing evaluations in line with actual conditions. Regarding “matching,” in addition to automatic matching using the system, detailed adjustment work is also carried out by the company's employees, and this is an advantage. Various forms are proposed, such as outsourcing where company employees perform project management, and they also respond to dispatch contracts at the request of the client.

In the 2021/10 fiscal year, the platform “GigWorks Basic,” which can directly receive and order work between gig workers (workers) and client companies (orderers), began full-scale operation. Client companies can collectively perform everything from job recruitment to contract conclusion and payment of commission remuneration fees within the same site, and the usage fee is “10% of the remuneration amount paid when the job is completed,” which is cheaper than the industry standard. Meanwhile, gig workers can self-appeal by displaying their career, a list of skills they hold, a history of contract results so far, and evaluations from companies through the “GigWorks Basic” site, and usage fees are free. The shift calendar platform function (patent pending), payment method, and eKYC (online identity verification) function are in place, making it highly convenient. Similar site services such as CrowdWorks and Lancers are also being developed, and the number of users is increasing. In 2023/3, the company's matching platform “GigWorks Basic” began cooperating with Iole ＜2334＞'s operational job advertisement platform “HR Ads Platform”. The “HR Ads Platform” is an operational job advertisement platform, and when a recruitment company bids for job advertisements, job advertisements are automatically posted on multiple recruitment media with which they have partnered, enabling simple and highly immediate job advertisement operation. With this collaboration, “GigWorks Basic” can greatly enhance job information on the site by posting job advertisements automatically posted on the “HR Ads Platform” to 100 times or more from the current number of posts, and support diverse work styles and new job encounters for gig workers. We plan to continue to actively invest in advertising and system improvements in the future.

Sales in the on-demand economy business (not including the system solution business) for the second quarter of the fiscal year ending 2024/10 decreased 8.0% from the previous fiscal year to 5,468 million yen, and segment profit increased 22.4% from the same period to 475 million yen. Contact centers continued to operate at a high rate, and profits on par with the same period last year were maintained even when sales declined. Field support operations such as processing, installation, and sales related to IT equipment remained sluggish. Since sales of “SNPIT,” which earns money by taking photos of the Snap to Earn application in the Web3 domain, also contributed, it boosted segment profits in the on-demand economy business.

2. Digital marketing business where changes in profit structures are progressing

The company acquired all shares of two mid-sized mail-order specialty companies in 2022/7 and entered the mail-order business. Japan Direct Sales, which is one of the companies, is one of Japan's leading mail-order brands. It is a long-established brand that started “Japan Direct Sales” in 1976, when no one was aware of mail order sales, and caused a huge boom by utilizing TV commercials for innovative and unique products not sold in stores, and even now, more than 45 years after its establishment, it continues to show a strong presence as a pioneer in the mail order industry. While Yuyu Seikatsu develops a mail-order business centered on its own brand shopping catalog “Yuyu Seikatsu,” the number of EC site users has also increased in recent years. The number of items handled is approximately 2,000, including health/beauty supplies, lifestyle goods, leisure/hobby goods, optical devices such as water purifiers, cameras, telescopes, etc., watches, electronic products, fashion, food, etc. In October of the same year, the two companies merged and made a fresh start as a new “Japan Direct Sales.”

In the new “Japan Direct Sales,” the basic strategy is to strengthen services for seniors, who are the main target customers, while keeping the strengths of product sales intact. Services launched as part of this include “rush service” and “delivery service,” such as “rush service” and “delivery service,” which utilize gig workers' field service capabilities and contact center communication skills. In this service, a field support unit visits the buyer's home and performs product installation, assembly, usage support, etc. for products sold directly in Japan.

The premium membership system began in 2023/11. It is a strategic measure in line with the policy of improving customer LTV (lifetime value: customer lifetime value) and adding service sales. When you join a premium membership, you can receive various benefits such as product discounts (up to 5% off at all times), free shipping/return shipping, 3,000 yen off visit assistance services, purchases of premium/limited products/services, and reception with a dedicated dial. It's 550 yen (tax included) per month, and you can currently get a 1,500 yen coupon as an enrollment bonus. The number of premium members has surpassed 2,000 in half a year since the start, and great results have been achieved.

Sales in the digital marketing business for the second quarter of the fiscal year ending 2024/10 fell 11.3% from the previous fiscal year to 2,868 million yen, and segment losses were 45 million yen (loss of 74 million yen in the same period last year), improvements in the profit structure progressed, and loss ranges were shrinking.

(Written by FISCO Visiting Analyst Hideo Kakuta)