East Japan Railway : Formulation of Medium to Long term Business Growth Strategy“Beyond the Border”

June 4, 2024

East Japan Railway Company

Formulation of Medium- to Long-term Business Growth Strategy

"Beyond the Border"

⎯Evolving Suica to expand the Suica economic zone through the creation of the Suica app (tentative name)⎯

• The market surrounding the JR East Group will undergo significant structural and qualitative changes in the future, as it is expected that the population and the birthrate will further decline and the population will further age.
• To further accelerate sustainable growth based on the two axes of "Mobility" and "Lifestyle Solutions" that the JR East Group aims to achieve in this changing market, the JR East Group has formulated a new medium- to long-term business growth strategy, "Beyond the Border," to replace its existing Lifestyle Services Business Growth Vision, "NEXT10."
• The foundation of this growth strategy is the creation of a new digital platform through the evolution of Suica. The JR East Group will expand the Suica economic zone by creating the Suica app (tentative name), which will evolve Suica from a device for mobility to a device for lifestyle that is connected to various aspects of its customers' lives.
• By promoting this strategy, the JR East Group will double the operating revenue and operating income of "Lifestyle Solutions" within ten years (by FY 2034.3).

1. Medium- to long-term business growth strategy "Beyond the Border"

• The JR East Group will redesign its "multilayered, real network," which has been its strength to date, covering both mobility and lifestyle solutions, into a new strength by "creating purposes (destinations) of travel" and "strengthening points of contact with individual customers through DX" by evolving Suica.
• This will expand its business area dramatically beyond the boundaries of the current JR East Group ("Beyond the Border").

"Move Up" 2027

Business model based on the premise that "customers naturally gather at

stations" utilizing a multilayered, "real" network

Medium- and long-	Ekinaka	SC/real estate
distance

Medium- to Long-term Business Growth Strategy

Group Philosophy "Helping our customers and people in communities to realize enriched lives"

	traffic
Short-distance	Real	Advertisement	Payment
	(stations/trains)
				Redesign to
		Various businesses, including the above pursue new value
				Users will
Strength of the JR East Group	gradually decline
if the current
"Multilayered, real network"	situation
continues

Creating ordinary and extraordinary experience value (life value)

tailored to individual customers

Creating purposes (destinations) of travel for	businessofExpansion	marketsnewinto
individual customers
Strengthening points of contact with
individual customers through DX
Transforming existing businesses

	Breaking away from the	Environmental changes	Available business
	conventional models	opportunities
Decrease in rail usage due to	Changes in work styles and	Digital technological progress	Continued growth in the	Emergence of attractive
and increase in value of real	contents through regional
population decline, etc.	consumption values	Tokyo area
experiences	revitalization

2. Creation of Suica app (tentative name) that is connected to various aspects of customers' lives

(1) Evolution of Suica

• The foundation of "Beyond the Border" is the creation of a new digital platform through the evolution of Suica.
• The evolution of Suica means that Suica will be transformed from a device for mobility into a device for lifestyle with dramatically improved convenience. Future steps include enabling seamless use of Suica by integrating various IDs, such as Ekinet and Mobile Suica, by FY 2028.3 and to launch a new railway ticketing system through cloud migration to offer, for example, a return fare discount to customers who spend a certain amount of money at a station building. Furthermore, the Suica app (tentative name) will be released in FY 2029.3, enabling customers to use an entire range of services tailored to their specific needs with this single app.

Seamless experience through ID integration and the Suica brand

FY 2028.3

ID integration

JRE POINT (Data platform)

• Integrated service use centered on the Suica app
• Seamless use of services according to daily life situations

Addition of new functions

(payment and finance, lifestyle, communication, etc.)

FY 2029.3

Front platform (integrated ID) for various aspects of customers' lives,

such as Suica app

Functionalization/

API linkage

Train	Commuter	Mobility	Community	Facility	Mobile	Delivery	Purchase of	Inventory	Payment
reservation	pass	tickets	tickets	reservation	order	arrangement	goods

JRE POINT (Data platform)

• In addition, new functions* will be added sequentially over the next ten years, with the aim of making the evolved Suica cover every aspect of customers' lives.
• • New functions will include ticket services integrated with mobility, finance/payment, biometric authentication, linkage with My Number Card, timing marketing, health, learning, logistics, and linkage with government and community services.

Creation of new business areas

Providing this value to society in cooperation with parties outside the Group

DX for the community with Suica

Ticketing service					Local currency
tailored to	Special		Coupons		E-money	Credit card	and salary
local needs	tickets			receipt
	Mobility-		Seamless provision
	integrated
		of all financial and
	ticketing
		payment services
	service
	Entertainment		Debit card
		facilities
	Media-less		Ultimate timing
	authentication
		marketing
	services	Integration
	Biometrics	Linkage with My	Various digital services	On-board	Spot targeting
	Number Card		targeting
Administrative/
						Real-time
community				Integrated
service				ID			business

innovation

Evolution of JR East Group businesses/services

(2) Expansion of business area through data marketing

• The JR East Group will promote market-in business by maximizing the use of big data collected by the evolved Suica, linking mobility data, which is one of JR East's strengths, with various real and digital services, thereby, for example, carrying out one-to-one digital communication that enables provision of services and information in line with customers' tastes, preferences, and health conditions at appropriate times.
• In addition, the Group aims to further evolve Suica by feeding back data and needs obtained from the market to the evolved Suica and to utilize it for the next market-in business in a circular manner.
• Furthermore, the Group aims to take part in TOD* in the Asian region by developing overseas the market- in business that has been successful in the Tokyo area and building up a list of achievements.
• • TOD: Transit Oriented Development

(3) Life value to be realized in the future

• The JR East Group will offer new life value to its customers by linking real and digital services through the evolution of Suica and a digital platform built by data marketing.

[Customer experiences of various real and digital services to be changed by the digital platform]

Timely delivery of food that matches individual health conditions by linking medical data from the Smart Health Station to the touch of a station ticket gate

Bulk arrangements linked to the scheduler for tickets, hotels, and on-demand transportation to business travel destinations

Air conditioning and bath heating systems switched on in time with arrival home by linking temperature data with the touch of a station ticket gate

Strengthening/expanding points of contact

with individual customers through DX

	Ticketing for mobility			Commerce
	and living
	Railway		Coupons
	Mobility				Mobile order		SC linkage
	Community
	tickets
		tickets
	(MaaS)	Integration			Convergence
			Event/entertainment
		Media-less	facilities		Various service		Local
		authentication			reservations in the		products
				station trade area	Pickup at
	Linkage with My Number			stations/stores
Unlimited regional
	Card and biometric
transit passes by		authentication
linking the My Number
Card with other	Payment/financial			Digital
transportation
services			communication
systems
	Debit card		E-money		Owned		Digital
				advertising
					media
		Provision of			Retail in the
		all means of		Digital platform		entire station
		payment			trade area
	Online bank	Credit card	Optimization of communication
					DOOH in the station

trade area

Timely delivery reservation by linking e- commerce purchase history with the touch of a station ticket gate

Suggestion of online courses during commuting time by linking search history with the touch of a station ticket gate

Data

Receipt of salary and benefits by linking the My Number Card with electronic money functions

Hands-free touchless ticket gates linked to facial recognition data, etc.

Recommendation of online medical treatment at a health station at the nearest station when you feel unwell, linked to train ride data

Suggestion of trains that can make it on time even if you are late for departure on a business trip by linking train reservation data with the touch of a station ticket gate

Suggestion of your favorite sweets by linking search history and store inventory data with the touch of a station ticket gate

3. Numerical targets

• Over the next ten years, the JR East Group aims to create a Suica economic zone that spans both the real and digital worlds, dramatically expanding the current JRE POINT lifestyle zone, and to double operating revenue and operating income in Lifestyle Solutions in ten years (by FY 2034.3) compared to FY 2024.3.

IT/Suica	Operating revenue	Operating income

Real estate & Hotels

Ratal & Services

[Billion yen]

Lifestyle Solutions total

Lifestyle Solutions total

FY 2034.3

[Billion yen]

Lifestyle Solutions total

Lifestyle Solutions total

FY 2034.3

1,800
1,600	FY 2024.3

350

300

FY 2024.3

1,400	847.0 billion yen
1,200

250 170.3 billion yen

61.6

1,000

800

600

200

150

16.2

400	405.8

200379.6

100100.1

50

54.0

FY 2024.3		FY 2034.3		FY 2024.3		FY 2034.3