1. Market overview & analysis
Team D March 2013
Market overview & analysis

2. E-commerce is the biggest segment with high growth potential and an average EBITDA margin
E-commerce is a unique segment in terms of size and profit pool, providing more short-term growth opportunities than any other segment
Revenue pool
mn PLN
2340 mn PLN
Profit pool
EBITDA margin
18%
Communication is the most promising of the remaining segments with relatively high revenue pool and EBITDA margin 50 30
148
Other segments are still in early development stage and provide long-term growth opportunities 47 4
Source: Team D analysis of publicly available data

3. High growth of digital market size is expected, with e-commerce clearly leading the way
E-commerce: most developed segment of digital market is still growing, mainly due to the increase of consumers’ spending on online shopping
CAGR
24%
293%
Communication: Rapid growth both in terms of users and ARPU is predicted with increasing mobile VoIP popularity
2325
CAGR
11%
12% 8%
17%
34%
184%
1260
Reading: Growth of userbase accompanied by stable ARPU growth is expected in the upcoming years
Source: Team D analysis of publicly available data

4. The growth is accompanied by 4 major trends
Beauty/Cosmetics and Clothing sectors gaining on importance
57% of iConsumers have purchased beauty & cosmetic products online in the past 6 months, 56% have purchased clothing
Only 24% will not purchase beauty & cosmetic products online in the next 6 months, followed by 28% for clothing – less than in other categories
33% of the last fashion products purchases were done online
Price comparisons becoming more popular
48% of iConsumers search the Internet to compare similar products,
76% go online to check the prices
High use of the application in USA and West Europe, the Polish market not saturated yet
The importance of mobile services going up
94% of Poles own a mobile phone
The use of mobile phones is increasing – 16% spend more time talking on mobiles
36% have some mobile apps installed on their mobile phones
Internet usage of financial services highly increasing
21% of Polish bank accounts are online
The number of Internet transactions has been growing with CAGR amounting to 50% and is predicted to keep the pace.
Ad. 1,2,3 – McKinsey report
Ad. 4

5. The above analysis depicts e-commerce as the most attractive digital segment, characterized by high revenue, average EBITDA margin and growth potential supported by several market trends.
A look at the competitive environment of e-commerce shows more advantages of the segment
Revenue of major players on e-commerce market
Marketplace
Apart from Allegro (marketplace) the Polish online market is fragmented and therefore easier to succeed on.
Online shops
The biggest online shops are focused on specific sectors, mainly RTV and AGD, providing room for different approach.
Nie wiem, czy dobrze zrobilam wrzucajac to podsumowanie tutaj, ale chcialam jakies wprowadzenie do omawiania wylacznie e-commerce
Source: E-commerce 2011, Internet Standard

6. Supported by market trends, price comparison services offer significant short-term monetization opportunities
OPERATING MODEL
Operating the portal in its traditional form to maintain traffic.
Building highly profitable start-ups bound to the core business.
MONETIZATION:
BEAUTY & CLOTHING COMPARISON
Create a price comparison
Connect it to the portal
Sell the products
Charge for the sold items
Focusing on beauty and clothing; creating a mobile app
Integrating the service with fashion, beauty and health sections; replacing competitors’ adverts
Attracting traffic through the portal, diversify: ensuring single “basket” and payment
Receiving an agreed percentage of the price of each product sold
MONETIZATION:E-COMMERCE: having 1 basket on the website – why? Customers don’t like to be redirected to other websites + will buy more if everything in 1 place, no need to register several times, no need to pay for delivery twice. 2 oprions: 1) agreeing with the retailers on lower rates (they send everything on their own) or signing up with outsourcing company – retailers deliver there, they send all the products to customers,
MONETIZATION: FINANCIAL SERVICES COMPARISON: ComparetheMarket.com, GoCompare.com and Confused.com
MONETIZATION:FINANCIAL SERVICES COMPARISON
Create a financial services comparison
Connect it to the portal
Sell the products
Charge for the sold items
Comparing financial products like insurances, deposits, mortgages, creating a mobile app
Integrating with financial section of the portal
Attracting traffic through the portal, providing an option to save results (time-consuming decision)
Receiving an agreed percentage of the price of each product sold

7. WP.PL is a better fit for proposed monetization model
2010
GAZETA.PL
WP.PL
Real users
8 m
11 m
WP.PL is able to provide wider userbase spending more time on the website...
Average time on website per user
125 min
350 min
Market share growth (‘08-’10)
18 p.p.
12 p.p.
...although Gazeta.pl has gained more market share over past 3 years…
EBITDA
10 m PLN
30 m PLN
...and will be potentialy cheaper to acquire
Advantage in selected site categories (% reach of internet users)
To moze byc na czw
E-commerce
N/A 7%
WP.PL advantages are aligned with current market trends in E-Commerce segments, providing robust user base for future development in E-Commerce segment
Lifestyle
27%
32%
Finance 8%
17%