Logistics for Marketing

This copyrighted document is the property of OOO Kupishoes and is disclosed in confidence. It may not be copied, disclosed to others, or used for manufacturing, without the prior consent of OOO Kupishoes.

Liubomir Kuchuk5th of June 2014

Content

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1 Lamoda background

Why we need to do own Logistics?

Implications of technology on the business model

What does that mean to customers?

Lamoda is backed by experienced investors…

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Globally renowned investors

Press Clippings

… and has access to unique global knowledge and experience in e-commerce through companies founded by our investors

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E-commerce companies founded by our investors

Q4 2013

Q3 2013

Q2 2013

Q4 2012

Q1 2013

Q3 2012

Q2 2012

Q1 2012

Q4 2011

Q3 2011

Q2 2011

Lamoda’s growth has been exponential, covering already all key markets in CIS

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Partners who trust us

Reaching customers across Russia and CIS

Present nowTo be launched shortly

Goal - #1 in Russia and CIS

>80k# SKUs~1000# brands

VolumeNumber of orders

Kazakhstan

Ukraine

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1 Lamoda background

Why we need to do own logistics?

Implications of technology on the business model

What does that mean to customers?

Logistics infrastructure is the main challenge for ecommerce in Russia

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Germany

China

USA2x

2x

50x

Existing courier firms not tailored for fashione-commerce

Supply challenge

Not customer experience focused

Relatively slow Relatively expensive

Demand challengeCustomers expect highest service level Try on at door Cash on delivery Next day delivery Friendly and timely

couriers

How to deliver superior customer experience to demanding customers across 17.000.000 km2?

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When launched in 2011, Lamoda partnered with the most successful companies…

Leading international freight agent, used for delivering goods to Russia

Well known European 3PL provider with facilities in Russia

Leading international express delivery agent

One of biggest players in Russia

WH and fulfillment

Inbound freight

Delivery to customers

Call Center

Initial Setup

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… but customer needs were not met

Long lead-time in delivery of goods from suppliers at high cost

Long lead-time in all WH processesLow quality of stock Not efficient usage of space

Long lead time of deliveryNon traceable ordersCustomer lower satisfaction

Low SLALow understanding of our productsNot familiar with business model

Inbound freight

Call Center

WH and fulfillment

Delivery to customers

Challenges

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Hence Lamoda has developed its own, integrated ecommerce platform

Inhouse import team to bring inventory online first in the season

Lamoda Distribution Center in Moscow focused on fast fulfillment and attractive cut-off times for customers (e.g. 24h Moscow for next day)

Lamoda Express as the fastest B2C delivery company in Russia/Kazakhstan (next day delivery in >50 cities, e.g. Almaty, Ekaterinburg)

Lamoda Call Center with highest service level for inbound and outbound operations

Inbound freight

Call Center

WH and fulfillment

Delivery to customers

Market-specific Solution

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1 Intro – Lamoda background

Why we need to do own logistics?

Implications of technology on the business model

What does that mean to customers?

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Customer experience that we offer is reflected in every step of the value chain…

Call Centre Distribution Centre

Own fashion delivery

99.98% items availability in the DC99%

of calls originated within first 5 minutes from order creation

Trained sales reps to support in choosing the right

goods

DC in Moscow where

40% of market is located

90% of calls are answered within

20 seconds Next day delivery in >50 cities

Next day delivery in Moscow when ordered before

Midnight

64 delivery methods

99.99% outbound service

level

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Lamoda Distribution Center, October 2012

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Lamoda Distribution Center, November 2012

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Lamoda Distribution Center, December 2012

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Lamoda Distribution Center, May 2013

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Customer experience that we offer is reflected in every step of the value chain…

Call Centre Distribution Centre

Own fashion delivery

99.98% items availability in the DC99%

of calls originated within first 5 minutes from order creation

Trained sales reps to support in choosing the right

goods

DC in Moscow where

40% of market is located

90% of calls are answered within

20 seconds Next day delivery in >50 cities

Next day delivery in Moscow when ordered before

Midnight

64 delivery methods

99.99% outbound service

level

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… and results in massive impact on economicsQuick confirmation calls reduce cancellation rate

Fast delivery reduces rejection rate

Our high quality delivery service reduces rejection rate

Our high quality delivery service increases repurchasing rate

-35%

10+ min5-10 min1-5 min<1 min

+6%

6 month3 month1 month

Lamoda Express

Other courier companies

-17%

Other courier companies

Lamoda Express

-10%

4+ days3 days2 daysnext day

Our efforts resulted in significant improvement of customer experience over last year

Net promoters score (NPS) % of satisfied customers

Promoters, %

Detractors, %

NPS, %

86817876

3555

83767371

Q22013

Q32013

Q42013

Q12014

89848285

Satisfied and fully satisfied

Website

91848282Delivery

94878782Customer Care

Q22013

Q32013

Q42013

Q12014

From -100% to+100%

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1 Lamoda background

Why we need to do own logistics?

Implications of technology on the business model

What does that mean to customers?

In distribution center, internal movements are supported by improved technology which resulted in increased quality

100% control and track of internal movements…

…increased quality

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Hand free scanner

Transport solutions

Zebra label printer

18 months ago

13 times

Today

1,5 mistake out of

10.000 orders

Relative number of mistakes in distribution center

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Further improvements will come from implementation of technology in process automation

LoadingDispatchingPackagingSortingPicking

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Additionally, last mile delivery will be supported by sophisticated software for tablets to improve performance

Operational efficiency

• Instant status update in ERP• Delivery interval hit/miss control• Real-time fleet management• Complete transparency for customer care

centre

Customer Services

• Client orders on screen with rich media and suggestions

• Order specific information• Unlimited opportunity for upselling• Deep integration with CRM

Sales ForceManagement

• Real-time tracking of KPIs• Team ranking to build competition and drive

performance• Gamification to motivate personnel

Thank you!

This copyrighted document is the property of OOO Kupishoes and is disclosed in confidence. It may not be copied, disclosed to others, or used for manufacturing, without the prior consent of OOO Kupishoes.