International Marketing Rocket Internet and digital revolution

Silvia Rita Sedita Elaborated from Winiarski (2014), “How to rock the Internet”, presentation given at my “Advanced Marketing” course, December 2014. Mission:

To Become the World’s Largest Internet Platform Outside the United States and China Market Opportunity

“Internet is going further and faster into daily life than anyone imagined”

5.4 bn 74% Potential Global mobile customers users Born in

Founded in 2007 Incubated over 100+ companies 20+ business models Target over 5 bn people world-wide 25,000+ people on the ground Stylized facts  Rocket Internet started in Berlin in 2007 with just four employees and two consumer brands and an initial investment of EUR 0.5 million.  Since then, Rocket has evolved into a unique platform that systematizes and accelerates the process of identifying, building and scaling proven Internet models with predictable, consistent and repeatable output in complex markets.  As of December 2014, Rocket Internet and its companies were active in more than 110 countries with more than 30,000 people.  Rocket Internet was listed on the on October 2, 2014, and, as of December 31, 2014 had a market capitalization of EUR 7.9 billion.

Rocket Internet keeps growing

The company will relocate its headquarters to the GSW building in Charlottenstraße 4 in Berlin’s Kreuzberg district with a view to the former Checkpoint Charlie. Named the “Rocket Tower”, Europe’s largest start- up campus will emerge in two interconnected buildings. Shareholder Structure

1

¹ This figure includes shares that are held by affiliates of Global Founders GmbH. Management Board

Oliver Samwer Peter Kimpel Alexander Kudlich CEO CFO Group Managing Director

Oliver Samwer is a serial From 1992 to 2014, Peter Kimpel held Before joining Rocket as Group entrepreneur with a proven track various management positions at Managing Director in 2012, Alexander record in some of ’s most Goldman Sachs in the United States, Kudlich was Assistant of the Chairman successful internet companies. Frankfurt and London – at last as a and CEO of Axel Springer and Regional Graduated from WHU, he founded partner in London. Peter Kimpel joined Managing Director with zanox, one of its Rocket in 2007 and serves as its Rocket in 2014 as CFO. group companies. Alexander graduated CEO since 2014. from HSG, UCL and ESMT. 4 Megatrends that Drive Growth

1) Smartphone Ubiquitous 2) Reversed Population Pyramid in Emerging Compared to Developed Markets

Smartphone Users Growth (2013–2018E) [VALORE]

Elderly (Aged 65 and Over), as a Percent of the Population, 2010

13% 10% [VALOR E]% 7% 5%

USA & China India Mexico Brazil US

3) Rising Middle Classes 4) Leapfrogging Physical Retail

Size (MM) of Middle Class in USA Size (MM) of Middle Class in Indonesia 2014E People Per Retail Outlet

31% 34% 33% 1% 6% 16%

33

88 90 74

10

2

1,150 100,012

Global Insights, WCIS, PlanetRetail,Global UnitedWCIS,Insights,Nations, Euromonitor, World Population (UN, 2009)Prospects

2006 2014E 2022E 2006 2014E 2022E

US Africa

Source: % Middle Class of Total Population The Home Screen Of The World

Rocket Internet helps people use their smartphones to get what they need, any place, any time, offering the same world-class user experience in all markets. Concept Team

Close Market Monitoring Capital Set up High Profile Team

Identification of Potential Top-Tier Execution Support

Proven Business Models Experts in all Categories

Concept Evaluation International Talents “We Are Not Investors. We Are Builders.” “We identify proven business models that focus on basic needs. We quickly build companies for these business models using highly standardized and optimized processes and then scale these companies to a leading position in our markets.”

1. Identify 2. Build 3. Scale Global Network of Companies “We continuously “Our functional “We roll out companies to monitor customer experts from IT, >100 markets and aim to behavior in our SEM, SEO, BI, CRM scale them to #1 markets.” etc. build companies positions.” from scratch.” More than 20.000 People on the Ground

2,800+

3,000+

2,100+ 5,800+ 6,300+ Focus On Online Business Models Across 4 Sectors 4 Sectors: the companies

eCommerce Marketplaces Financial Travel Technology

Company classification Regional Internet Groups - Africa Regional Internet Groups – Asia Pacific Regional Internet Groups – Latin America Regional Internet Groups – Middle East The Rocket Platform: a winning business model

Infrastructure Rocket Network

. Highly structured / best . Founding 10 new practices companies p.a. on . Centralized IP with average regional execution . Consistent returns across . Repeatable and scalable network of companies

Processes Technology

. Highly structured / best . Proprietary technology practices platforms allowing rapid global . Centralized IP with deployment regional execution . Comprehensive KPI analytics . Repeatable and scalable driving continuous optimization . Provision of shared services to jump start new businesses at low cost Standardized Master Launch Process

INDEPENDENCE KICKOFF Set Up Rocket Best Practices LAUNCH Reporting & Optimization Day 0 Day 100 Day 200

Product & UX Design Website & Apps Landing Pages, Onsite Search, Onsite Sorting, Personalization, Multivariate Testing

Engineering MVP web & apps Iteration of Product, Agile Development Focusing on Stability, Security and Speed

Targeting, Creative, Bidding, with Maximum Granularity (eg Keyword Level) and Optimization of CAC vs. Marketing Marketing channels

CLV

CENTRAL CRM CRM tools Segmentation, Lifecycle Management, Content, Automatization

Business Intelligence Data-Warehouse Daily, Weekly and Monthly KPI Reporting for Marketing, CRM, Sales, Customer Care, Ops etc.

Legal & Finance Legal Entities, Brand & Domains, Accounting Financial Reporting & Controlling, Compliance

HR Continuous Recruiting of Central and Local Founders, 2nd Level Management Talent and Functional Experts

Operations Rocket Operations Management Systems Improving Efficiency in Operations

LOCAL Sales Sales and Business Development processes Focusing on Daily Management of Sales and Business Development Funnel in SalesForce

Customer Care Call center and local support Increasing Net Promoter Scores

Capability to Launch a New Venture in <100 Days Ventures Operationally Independent in <200 Days Data mining Best Practices shared in Real-time

Reporting Input: Key Metrics Data Warehouse Output: Automated KPI Reporting Pulled Automatically From Company And Third Party Systems For Each Company And Benchmarking Across All Companies And Functions

Orders Reports Daily Weekly Monthly Backend Systems New Customers … Marketing Impressions & Clicks Marketing Tools Costs … Onsite

Visits With Origin Onsite Analytics Onsite conversions ... CRM

Biz Dev Data & Funnel Sales Tools Supplier Base Mobile … Apps

Contacts With Origin CRM Tools Costs … SEO

App Downloads Other Data Sources Operations, ERP etc. … … Three Proprietary Technology Platforms

Alice Nico Yoda Alice Rocket eCommerce Platform Rocket Marketplace Platform Rocket FinTech Platform

Powering Rocket’s ecommerce Powering Rocket’s marketplace Powering Rocket’s financial companies companies technology companies

Omni-channel: desktop, mobile web Omni-channel: desktop, mobile web Scoring APIs: integrated connectors & mobile apps for iOS & Android and mobile apps for iOS & Android to international scoring providers

Highly scalable, can handle very high Enables all relevant transaction High security architecture adaptable volume and multiple countries mechanics (auction, sale, lead etc.) to arbitrary regulatory environments >8 >40 >70 Websites & Apps Websites & Apps Websites & Apps Source: http://tech.eu/features/1413/how-big-is-rocket-internet-kinnevik/ Source: http://tech.eu/features/1413/how-big-is-rocket-internet-kinnevik/ Source: http://tech.eu/features/1413/how-big-is-rocket-internet-kinnevik/ Source: http://tech.eu/features/1413/how-big-is-rocket-internet-kinnevik/ Source: http://tech.eu/features/1413/how-big-is-rocket-internet-kinnevik/ Source: http://tech.eu/features/1413/how-big-is-rocket-internet-kinnevik/ Source: http://tech.eu/features/1413/how-big-is-rocket-internet-kinnevik/ Source: http://tech.eu/features/1413/how-big-is-rocket-internet-kinnevik/ The secrets of the business

… Capture Founder Minimize Risk … … Scale Globally Alice Economics

Low Customer Adoption Risk

Low Competition Risk

Low Execution Risk

Deploying 75-100% Repeatable Proven Models, Ownership Success in With 15 Years Geographical Execution Roll-Out Track Record Key achievement 2014 Global Fashion Group

"The creation of GFG brings together five powerful digital brands led by a unique group of highly talented founders and managers. By operating as a single entity, Dafiti, Jabong, Lamoda, Namshi and Zalora will be even more effective in expanding their leadership positions in their respective marketplaces.”

Lorenzo Grabau, CEO of Kinnevik

Global Fashion Group

"GFG will be focused on capturing the massive growth opportunity of fashion e-commerce in emerging markets. Each of the business units will be able to build on the original Rocket platform and continue to leverage knowledge and expertise gained across 27 countries. I look forward to working with our founders in accelerating GFG's growth profile and development even further.”

Oliver Samwer, co-founder and CEO of Rocket

Rocket Internet identifies Food and Groceries as the next frontier of e-commerce

Choice of sectors

Source: http://tech.eu/profiles/1428/how-big-is-zalando-kinnevik/

Source: http://tech.eu/profiles/1428/how-big-is-zalando-kinnevik/ Source: http://tech.eu/profiles/1428/how-big-is-zalando-kinnevik/ Source: http://tech.eu/profiles/1428/how-big-is-zalando-kinnevik/ Source: http://tech.eu/profiles/1428/how-big-is-zalando-kinnevik/ Source: http://tech.eu/profiles/1428/how-big-is-zalando-kinnevik/