One App to Rule Them All June 2019

A Roadmap to Super Apps and The Brazilian Contenders

Tech Team Consumer Team

Enrico Trotta, CNPI Gabriel Simões Alex Ferraz, CNPI Thiago Macruz, CNPI Vinicius Figueiredo, CNPI Marco Calvi, CNPI
+55-11-3073-3064 +55-11-3073-3035 +55-11-3073-3028 +55-11-3073-3034 +55-11-3073-3029 +55-11-3073-3016
enrico.trotta@itaubba.com gabriel.simoes@itaubba.com alex.ferraz@itaubba.com thiago.macruz@itaubba.com vinicius.figueiredo@itaubba.com marco.calvi@itaubba.com
 One App to Rule Them All
The super-app story. In this report we take an in-depth look at the development of super apps in Asia, why the unique
environment in China favored these apps, and the potential contenders in Brazil.

 China: not the best example for Brazil. The combination of unique privacy concepts, mobile-first internet consumers, pro-
disruption and super-app-sponsoring authorities, and a cash-dominated payment market in China is one of a kind. That said,
China and WeChat may not be the best example when trying to determine the landscape for the development of new super
apps in Brazil. India stands out as a country with the potential to develop super apps, especially because the concept of
privacy of its population is very similar to that of Chinese consumers, and mobile internet usage is even higher than in China.

 The super-app path in Asia: insights from the super-app phenomenon. Asian super-app contenders are still far from WeChat
and Alibaba, but they provide interesting cross-reads for the Brazilian candidates. Among them we cite: i) the importance of
In this report we take an in-depth a high-frequency business for user-base growth; ii) the importance of e-wallets for increasing recurrence in the app and
expanding services offered; iii) the fact that other super-app contenders (apart from WeChat) are still far from profitability;
look at the development of super and iv) the lack of a clear super-app winner at this point, although there are many laps to go in this race.
apps in Asia, why the unique
 The super-app race in Brazil: market potential and contenders. Some of the key factors that supported the success of super
environment in China favored these apps in China are not present in Brazil. The relevance of mobile in total e-commerce is substantially below the current level in
apps, and the potential contenders China. Furthermore, there is less payment-related friction on the consumer end of transactions in Brazil than in China before
the strong growth of mobile payments. That said, to evaluate the potential winners in this many-lap race, we analyzed the
in Brazil five main, high-frequency-usage verticals with the potential to start a super app: Messaging, E-Commerce, Ride-Hailing,
Food Delivery and Payments. We note that Facebook has not yet entered the super-app race, but it could be a major
contender given its numerous, high-frequency users in Brazil.
Index

Section 1 China and The Unique Environment For Super App Development ................................. 4

Section 2 Successful Super Apps Case Studies In Asia ............................................................................... 11

Section 3 Super App Race in Brazil: Market Potential and Contenders .............................................. 23

3
Section 1
China and the Unique
Environment for Super-App
Development
China and the Unique Environment for Super-App Development

A Unique (and Almost Irreplicable) Combination of Factors

Key Factors in China’s Head Start Into Super Apps

 Unique privacy concepts. Chinese institutions have been monitoring the population’s web traffic almost since the beginning of the internet. As a result,
Chinese consumers have an idea of privacy that differs from most other countries. We believe that this has allowed super apps like WeChat to gather a
great deal of information on people’s lives without them being concerned about it.

 Mobile-first internet consumer. With the rapid increase in mobile penetration and internet usage in China, many consumers skipped the PC era entirely
and were more prone to getting as many tasks as possible done through their mobile phones. This favored the development of WeChat in China, and its
mini-program platform through which consumers can access different verticals and services with only one app.

 Government as a sponsor. The Chinese population’s internet traffic and consumption habits have been institutionally monitored, and we believe that
China may not be the best concentrating this data in the hands of a few players would make access to information much easier. Additionally, the restriction on some potential
international competitors (Facebook and Google, for example) from doing business in the country facilitated the establishment of oligopolies in several
example due to the industry segments and created a favorable environment for the development of super apps.

unique combination of  Cash-dominated payment market. In 2010, most payments in China were made in cash. However, with increasing smartphone penetration and apps
that offer both payment and everyday services (such as cab-hailing), mobile payment methods have gained momentum as the preferred payment
factors that favor the method of Chinese consumers. This favored the development of super-app functions and played a key role in generating traffic and recurrence within
the WeChat platform.
development of super Takeaways for the Development of Super Apps in Brazil

apps.  China may not be the best example for the development of super apps in Brazil. The combination of unique privacy concepts, mobile-first internet
consumers, pro-disruption and super-app-sponsoring government, and cash-dominated payment market in China is one of a kind. That said, China and
WeChat may not be the best example when trying to determine the landscape for the development of new super apps in Brazil.

 India in the spotlight of the super-app revolution. India stands out as a country with the potential to develop super apps, especially because the
concept of privacy of its population is very similar to that of Chinese consumers, and mobile internet usage is even higher than in China. While the super-
app revolution in India is incipient, the trend is surely one to watch as the country moves into its next chapter of internet usage.

Source: Itaú BBA and Companies

5
China and the Unique Environment for Super-App Development

An In-Depth Look at the Business Ecosystem in China

 China: a case study for the development of super apps in other regions. We believe that understanding the unique environment for the development of super apps in China could help determine why
other apps in Asia (such as Grab, Go-Jek and Meituan-Dianping, for example) could find it more challenging to develop a super app than WeChat did.
 Factors that contributed to the development of super apps in China. We attribute the successful transition of WeChat to a super app to several factors related to the business, consumer and regulatory
environment in China. Of these factors, which are not common in many Western regions (including Brazil), we chose four to discuss in detail in this section of the report: i) unique privacy concepts; ii)
mobile-first internet consumers; iii) government as a sponsor of super-app development; and iv) a cash-dominated payment market.

Unique Privacy Concepts To What Extent Do You Agree That Allowing Companies to Use Data They Collect About You...
(% Strongly or somewhat agree)
 China has a concept of privacy that differs from that of most other countries. Every step Total AUS BRA FRA DEU GBR IND JPN RUS SAL SWE USA CHN
taken by the people in China is institutionally monitored by its over 170 million surveillance Is something consumers should be able
62% 72% 60% 71% 56% 75% 56% 51% 52% 54% 75% 75% 57%
cameras, making it an almost “all-seeing state” with access to all consumer habits, both physical to refuse
and digital. The government is now considering taking another step toward becoming an all- Is something consumers should be paid
seeing state by assigning a social score to individuals based on their interactions, behavior and 54% 56% 59% 55% 42% 57% 55% 41% 46% 56% 55% 61% 68%
or rewarded for
trustworthiness, through its access to basically every aspect of a person’s life.
Helps them provide you with products,
 Chinese consumers have a different approach to companies’ data usage. Internet control in services and information that better 41% 35% 52% 27% 29% 40% 58% 27% 39% 51% 36% 44% 64%
China has been in effect since 1997, with the launch of the Great Firewall of China. They have meet your needs
developed different ideas of privacy and what its purpose. According to data presented by Helps you find/discover products,
IPSOS during the 2019 World Economic Forum, when asked about their concerns regarding services and information that are 41% 36% 52% 26% 28% 38% 62% 28% 38% 55% 32% 44% 64%
companies’ data usage, Chinese consumers seem to bother the least with this type of usage, relevant to you
even finding it convenient for companies to have direct access to their information because it
Helps you save time 35% 31% 47% 24% 27% 36% 55% 22% 33% 48% 26% 34% 63%
allows these companies to provide products, services and information that better suit their
needs. Chinese consumers also seem convinced that giving companies access to their
information helps them save time and money. Helps you save money 28% 23% 38% 21% 26% 25% 50% 18% 18% 44% 13% 28% 60%

Doesn't really bother you 23% 21% 31% 17% 21% 22% 36% 11% 19% 42% 28% 23% 49%

Source: Itaú BBA, IPSOS, BBC and The Economist

6
China and the Unique Environment for Super-App Development

An In-Depth Look at the Business Ecosystem in China

Mobile-First* Internet Consumer

 The development of China’s mobile ecosystem cannot be overlooked when determining the reasons that super apps have thrived in the country. Since 2009, with the launch of the iPhone,
smartphones have gained increasing market share in internet usage over desktops worldwide (until 2017) – and China is no exception. The speed at which it happened, however, was significantly different
from other countries. From 2014 to 2016, China’s market share of mobile internet usage grew at an incomparable speed, surpassing 50% at the end of 2016, aided by the decline in the price of these
devices.
 The rapid increase in mobile-phone market share in 2016 is one of the main reasons that China became one of the world’s first successful “mobile-first” countries. With cheaper, easier access to
smartphones, consumers were more inclined to get as many operations as possible done through their phones, as supported by an analysis of m-commerce (mobile online) retail sales in the country.
Notwithstanding the growth in e-commerce sales, from 11% of total retail sales in 2014 to 20% in 2017, m-commerce went from representing 9.0% of the e-commerce market in 1Q13 to 64.8% in 4Q15,
showing strong market-share gains from computer e-commerce sales in the period.
 The mobile-first mentality, which is clearly evidenced in m-commerce sales growth, was a determining factor in the success of super apps. This mentality allowed applications to easily develop other
functions for their platforms, making it easier for consumers (who already preferred their phones to their computers) to solve more of their problems in one place.

Market Share of Mobile Internet Usage E-Commerce Sales in China Share of Retail and C2C E-Commerce Sales in China
70% 100.0%
60% 80.0%
20% 64.8%
50%
16% 60.0%
40% 13%
11% 71,751
30% 40.0%
51,556
20% 38,773 20.0% 35.2%
29,087
10%
0.0%
0%

3Q13

3Q14

3Q15
2Q14

2Q15
2Q13
1Q13

1Q14

4Q14
1Q15

4Q15
4Q13
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017
Online Retail Sales (CNY million)
China Brazil U.S. U.K. Netherlands Desktop/Laptop Mobile
Online Retail Sales as a % of Total Retail Sales
Source: Itaú BBA, Forbes, StatCounter GlobalStats, National Bureau of Statistics of China and eMarketer. *Mobile-first: an environment in which mobile phones are a priority for program development and/or usage over computers.

7
China and the Unique Environment for Super-App Development

An In-Depth Look at the Business Ecosystem in China

Government as a Sponsor Companies Restricted in China and Their Chinese Substitutes

 The Chinese government has also played an important role in the development of super apps
through a number of measures. We believe that the main factors behind the government’s
“sponsorship” of the development of super apps are: *
 i) Internet regulation. Since 1997, with the creation of the Great Firewall of China, Chinese
authorities have enjoyed great ability to monitor citizens’ internet usage. The government has also
imposed restrictions on a number of internet companies (such as Google, Facebook and YouTube),
limiting the competition for local players.
 ii) Data control. To improve institutional internet surveillance, it makes sense to have only a
handful of players dealing with internet traffic. This is precisely what happened in China. **
 iii) Pro-disruption. Despite the importance of surveillance, China’s policies supported the
development of fintechs in the country by not imposing strict regulation on these companies
initially. Case in point, the government allowed apps to make money transfers by accessing their
users’ bank accounts, for example. This lack of regulation was vital in the development of the
mobile banking system in China and, therefore, in the creation of super apps.
***

Source: Itaú BBA. *WeChat; **Weibo; ***Tantan

8
China and the Unique Environment for Super-App Development

An In-Depth Look at the Business Ecosystem in China

Cash-Dominated Payment Market

 China’s payment market was dominated by cash payments. In 2010, cash transactions made up 61% of the total payment value in China’s retail consumption market (by 2018, this number was at 37% in
Brazil, for example). However, this figure has been on a consistent downtrend since then, somewhat due to the increasing acceptance and use of credit and debit cards, but mostly due to mobile payments
and the super-app phenomena.
 Skipping credit cards: the friction issue. All bank accounts in China are tied to a debit card, which made debit card penetration rather high throughout the country. Credit cards, on the other hand, had a
very limited penetration in the country, at only 8% in 2011. Penetration aside, the use of both credit and debit cards was significantly lower than cash, accounting for 35% of payments in 2010. Faster and
easier than cash and cards, mobile payments then became a viable and frictionless option, making it widespread in China before credit cards had a chance to gain traction.
 Straight into mobile payments. By plugging instant, free payments into their platforms, super apps reduced users’ need to carry money and avoided all the annoying steps required by credit cards.
Moreover, super apps brought offline transactions into the digital world, solving the day-to-day stress that is mostly related to offline issues, like standing in line.
 Digital payments also solve day-to-day issues. Actions that once required time and effort – such as going to the supermarket, cooking or hailing a cab – can now all be done through apps. Not only did
digital payments solve payment frictions – due to their speed relative to cash and credit cards – but the apps supporting this form of payment resolved real-life issues.

Credit Card Ownership in 2011 (%, age 15+) Retail Consumption Value by Payment Type – China
61.9% 100%
51.6% 53.5%
41.4% 45.9% 80%
35.7%
29.2% 30.0%
60%
14.9% 16.9%
4.5% 8.2% 13.0%
1.8% 40%

20%
Mexico

Sweden
India

Germany
Thailand

China

Saudi Arabia

Brazil
World

United Arab

Netherlands

United Kingdom
Taiwan, China

United States
Emirates

0%
2010 2011 2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E

Cards Cash Internet Mobile

Source: Itaú BBA, ABECS, World Bank and Kapronasia

9
China and the Unique Environment for Super-App Development

Want Proof? WeChat App Case Study

Putting the unique combination of factors to the test: did WeChat benefit from them on its way to becoming a super app? We believe so.

1 Unique privacy concepts. From a privacy standpoint, 1 Amnesty International’s Privacy-Policy Ranking 2 MAUs vs. Market Share of Mobile Internet Usage
Amnesty International cited various reasons for rating
WeChat the worst of 11 of the most-used social 73
67 67 1,098 1,112
networks in the world, at 0/100. Among them is the fact 989
889
that it neither publicly refuses to share data with official 53
697
institutions nor uses end-to-end encryption. 47 47
40 40 500
59% 59%
Mobile-first internet consumer. We note a clear 355 54%
2 50%
correlation between the increase in WeChat’s monthly 26 158
20 59 33%
active users (MAU) and the increase in mobile market
1% 2%
share in China, whereas Tencent’s initially PC-based 3% 5% 8% 15%
social media platforms even lost some of their users. 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
WeChat MAUs (millions) QQ MAUs (millions)
3 Government as a sponsor. As soon as the government Qzone MAUs (millions) Mobile Market Share (China)
decided to closely monitor the development of fintechs
– responsible for a decent portion of WeChat’s and
Alipay’s success as super apps – we noted a drop in both 3 Alipay and WeChat Pay’s Share of Mobile Payments 4 Red Envelopes Sent Via WeChat and WeChat’s MAUs
of these players’ market share.
75% 74% 72% 68% 15
4 Cash-dominated payment market. WeChat brought to 63%
the online universe a cash-dominated Chinese tradition: 55%
50% 54% 54% 54% 12 989
the red envelope, a sum of money distributed to friends 41%
889
as a gift on Lunar New Year, doing away with the real- 9 697
life stress of this cash-based transaction. After four 500
years, the number of packages sent through the app
38% 37% 40% 39% 6
32%
27%
had reached 14. 2 billion, and the app’s MAU had also 21% 23% 3
13% 16%
increased sharply. 11%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 0
2014 2015 2016 2017
Alipay WeChat Pay Red packets sent via WeChat (billions) WeChat MAUs (millions)

Source: Itaú BBA, Amnesty International, Tencent, StatCounter Global Stats, and Business Insider and StartSe

10
Section 2
Successful Super-App Case
Studies in Asia
Successful Super-App Case Studies in Asia

Insights From the Super-App Phenomenon in China and Southeast Asia

A High-Frequency Business Was Key for User-Base Growth
 Super Apps in Asia were born as single-service apps that added other
services as their user base grew.
 Super-app contenders started with a high-frequency-usage vertical,
which was key to increasing recurrence and growing the user base in
the app.
 Messaging has the highest frequency and recurrence without major
investment requirements, helping to explain WeChat’s success and
status as King of Super Apps. Ride-hailing and food-delivery players
have been facing challenges in increasing user frequency.
E-Wallets Were Key for Increasing Recurrence in the App
and Expanding Services Offered
Super Apps Are Less Likely
Other Super-App Contenders (Apart from WeChat)
Are Still Far From Profitability
 Super app candidates are still far from profitability because merchant
incentives and customer discounts are a key strategy for attracting
customers and creating recurrence within the app.
 Super-app services and the data generated through them could prove
to be more stable, more profitable and easier to scale than revenues
from ride-hailing and food-delivery apps, whose profits have so far
been elusive.
 Super apps have been well-funded by tech giants such as Tencent,
Alibaba and Didi Chuxing. This has been important in the super-app
battle in which the victor seems to take all and burning cash is
necessary to improve the user base and create recurrence.

to Succeed in the West  The profitability of e-wallets is questionable, but they have been
reducing payment-related friction in the region and have been a pillar
Than in China, Though in the strategy of super apps to boost user frequency.
 E-wallets contributed to the expansion of services and new products
There Are Interesting offered in the super apps because payment solutions usually generate
a lot of data on transactions and consumer behavior.
Cross-Reads for Brazilian  Some banks have already benefited from partnerships with super
apps to offer loans to merchants and customers, most of whom are
Contenders. underbanked and do not have bank accounts.
 Tencent and Alibaba have been connecting their e-wallets (WeChat
Pay and Alipay, respectively) to high-frequency businesses, such as
O2O food-delivery platforms, to boost their payment services.
There is No Clear Super-App Winner at This Point, but
There Are Many Laps to Go in This Race
 Apart from WeChat, Grab and Go-Jek seem advanced in the path to
becoming a super app, given their rapid expansion to a multi-service
platform – though there is no clear winner at this point.
 Meituan-Dianping and Ele.me have yet to express interest in
becoming a super app, focusing instead on winning in the O2O food-
delivery segment. Both companies could be connected to the Tencent
and Alibaba platforms, given that food delivery seems to be a
cornerstone in their new retail strategies.

Source: Itaú BBA.

12
Successful Super-App Case Studies in Asia

The Super-App Story and Asian Contenders

The Super-App Story: Successful Cases in Asia as a Reference for Potential Contenders in Brazil
 Super-app story in Asia: successful case studies and Brazilian contenders. Following our report The Chinese Digital Experience: The Story Behind the Super Apps, published on March 21, we present other
successful super-app case studies in Asia and delve deeper into the potential contenders emerging in Brazil (Rappi, iFood, and Mercado Libre, for example). The super-app story surged in Asia, with WeChat
in China. Following the WeChat experience, Asia has seen new super-app candidates pop up, which we discuss in this section of the report.
 Super app: one app to rule them all. To quote Blackberry founder Mike Lazaridis, “Super Apps represent a new class of mobile applications that make you wonder how you ever lived without them, it is a
closed ecosystem of many apps that people would use every day.” The super app’s operational system generally functions at the intersection of logistics/local delivery, e-commerce, payments and social
media. Classification as a super app requires at least two of these functions under operation. Super apps have a large, high-frequency user base.

The Super-App Path: Starting as a Single Service and Moving to a Multi-Task Platform
 The Asian super-app journey: a clear path through different verticals. Super apps in Asia were born as single-service apps that added services as they grew their user base. With payment services being a
must in the Super-App platform (to gather data and unlock other customer services), contenders in Asia started providing services to customers across the different verticals to grow their user base along
the way. Apart from WeChat and Alipay, detailed in our previous report (The Chinese Digital Experience: The Story Behind the Super Apps), the service verticals and contenders discussed in this section are:
i) Ride-Hailing (Grab and Go-Jek); and ii) Food-Delivery (Meituan-Dianping and Ele.me).

Asian Super-App Contenders: Division by Primary Vertical/Service Offered

Messaging / Ride-Hailing Payment Food-Delivery

Social Media

Source: Itaú BBA and Gojek Engineering.

13
Successful Super-App Case Studies in Asia

Grab and Go-Jek: The Super App Race in Southeast Asia

The Ride-Hailing Race and Super-App Contenders in Southeast Asia
 Grab and Go-Jek: initially established as mobile-transportation solutions. With growing smartphone penetration and worsening traffic jams, Grab and Go-Jek were initially established to provide an
option to the oversaturated public transportation in Malaysia and Indonesia, respectively, where taxis and motorbikes (ojeks) were considered unsafe, unreliable and usually unavailable during peak traffic
hours. Grab and Go-Jek currently operate in eight and four countries, respectively, including Vietnam, Singapore, Thailand and Philippines.
 The ride-hailing race: Grab as the front-runner, at least for now. Grab and Go-Jek have stayed out of each other’s lane for some time, but they have entered a collision course as their business models and
target market converge. In many of the cities in which they operate, Grab and Go-Jek have been engaged in a no-holds-barred price war, slashing fees for car rides, motorcycle trips and other services. Grab
seems to be the front-runner because it operates in more markets than Go-Jek and has e-payment licenses in Southeast Asia’s six largest markets (Go-Jek offers these services only in Indonesia and
Philippines). With its acquisition of Uber, Grab has the ride-hailing leading market share in Singapore, Malaysia, Philippines and Vietnam. In Indonesia, Grab has a market share of 62% in the ride-hailing
business.
 From ride-hailing to super app: Grab and Go-Jek are the new super-app contenders. With exponential user-base growth in the ride-hailing segment, through the addition of new services over time (Grab
Car and Go-Car, for example) and acquisitions (Grab merged with Uber’s operation in Southeast Asia in 2018), Grab and Go-Jek have both gradually evolved into apps that offer other services centered
around payments and are now considered Asia’s new super-app contenders. This also explains the companies’ growing funding needs, with Didi Chuxing and Tencent as investors.

Grab and Go-Jek Started as Ride-Hailing Apps, Then Evolved to a Multi-Service Platform Focused on Payments... …Via Equity Rounds From Didi Chuxing and Tencent

Series A/B/C/D Funding Rounds (USD m)

funding (USD Didi Chuxing 2,900
USD 500 million 2,700
Founded as 340mm) with joined in a Grab merges with Founded as Series A with Series C funding investment-plan to
“My Teski” Vertex, GGV Capital Series E Uber’s Southeast “O-Jek” in Sequoia Capital (USD 150 m) with expand in Singapore
in Malaysia and SoftBank Group funding Asian Operation Indonesia India Tencent Holdings and other markets
1,460
1,535
750 1,100
2012 2013 2014 2015 2016 2018 2019 2010 2015 2016 2017 2018 2019
340 350
550
150
Expansion to Launched Launches Series H financing Go-Jek app is 10 new functionalities Series F funding (USD 1 2014 2015 2016 2017 2018 2019
Philippines/ GrabCar & GrabPay (USD 1.5 bi), implied launched are added, including bi) with Google and JD,
Singapore/Thailand GrabBike valuation of USD 14 bi Go-Car, Go-Auto and implied valuation of Grab GO-JEK
Go-Pay USD 9-10 bi
Source: Itaú BBA, Bloomberg, Fortune, Grab, Go-Jek and CB Insights.

14
Successful Super-App Case Studies in Asia

Grab and Go-Jek: The Super-App Race in Southeast Asia

Ride-Hailing Market Size in Southeast Asia; Indonesia in the Spotlight
 Ride-hailing to post one of the strongest market growths in SEA: a fundamental driver
for Grab and Go-Jek apps. Ride-hailing is expected to post one of the strongest market- Both Grab and Go-Jek Have Been Increasing Downloads, but Grab is in the Lead
size gains in Southeast Asia until 2025, when it is estimated to reach USD 25 billion (from USD
8 billion in 2018), which is key for the expansion of the Grab and Go-Jek user base and daily # of Downloads (in millions) 3.5
3.3
active users (DAU).
2.9 2.8
 Inside the Grab and Go-Jek battle: Indonesia is still the main battlefield. Indonesia, Go- 2.7 2.6
Jek’s founding country and the one with the highest GDP in SEA, is the most relevant market
for Grab and Go-Jek in terms of DAU. Go-Jek’s app is more mature in the country than 2.2 2.8 2.7
Grab’s, when comparing downloads and DAUs, but Grab has been slowly increasing its 2.4 2.5
downloads, likely due to its acquisition of Uber’s SEA operation. 2.2

nov/18

jan/19

mar/19
dez/18

fev/19

abr/19
 Geographical expansion: a many-lap race. Grab has a stronger footprint in other SEA
countries, with one million DAUs outside Indonesia, due to its first-mover advantage.
However, Go-Jek’s new funding rounds will increase the competition in other SEA countries. Grab Go-Jek

Ride-Hailing in SEA is Expected to Reach a Market Size of USD 25 billion by 2025 Grab Has Been Increasing User Frequency, While Go-Jek Has Been Losing Momentum

SEA Internet Economy Market Size (GMV, USD bi) Market Exposure (in DAU, %) Sessions per User (x) 3.7
250
CAGR 15-25
3.5
3.4 3.4 3.4
200 Ride-Hailing: 26% 3.3
Online Media: 24%
150 Online Travel: 15% 99%
3.4
E-Commerce: 34% 66%
3.3 3.0
100 3.2
Total: 22%
3.1 3.1
50

Jan-19

Feb-19

Mar-19

Apr-19
Dec-18
Nov-18
Grab Go-Jek
0 Indonesia Malaysia
2015 2018 2025 Singapore Thailand
Ride-Hailing Online Media Online Travel E-Commerce Philippines Vietnam Grab Go-Jek
Source: Itaú BBA, Bloomberg, Fortune, Grab, Go-Jek, Google/Temasek report, and Similar Web.

15
Successful Super-App Case Studies in Asia
Grab and Go-Jek Have Quickly Evolved
Grab and Go-Jek: The Super-App Race in Southeast Asia into Providers of a Wide Array of Services

Ride-Hailing Frequency in Southeast Asia: Way Above Global Peers

 Ride-hailing is a high-frequency service in Southeast Asia: a key factor for user-base growth. Southeast Asian countries have one of the highest global
ride-hailing user penetrations, which helps to explain the success of Grab and Go-Jek. Grab recently moved its headquarters to Singapore (the highest
ride-hailing user penetration in the world), where the company has been battling directly with Go-Jek. Ride-hailing is also a high-frequency service in the Daily Avg.
Users (mm)
2.0 2.8
region, and we believe that the segment was vital to the expansion of Grab’s and Go-Jek’s user base over the last few years.
Ride-
Far Beyond Ride-Hailing: Super-App Services and Data Generated Could Prove More Profitable Hailing
 Not just a ride-hailing battle: the super-app value proposition. Grab’s and Go-Jek’s aspirations of going far beyond the ride-hailing business and Bike
transforming their apps into a multi-service vehicle also has an important underlying reason. Many believe that super-app services and the data Sharing
generated through them will be more stable, more profitable and easier to scale than revenues from ride-hailing – where profits have been elusive
despite exponential growth (Uber’s financial performance, for example). In addition to ride-hailing, Grab and Go-Jek now provide a wide array of services Food
that include Mobile Finance (e-wallet and loans), Mobile Groceries (food and grocery delivery) and Mobile Miscellany (on-demand services). Delivery

Digital
Ride-Hailing Has a High Global User Penetration and is Also a High-Frequency Business in Southeast Asia Wallet

Local
% of Internet Users That Use Ride-Hailing Global Ride-Hailing User Penetration (%) Services
52% Apps at Least Once a Month 32.2%
51% Package
Delivery
48% 20.5% Trip
47%
16.2% Planner
16.0% 15.0%
45%
11.6% Tickets
9.5% Sevice

Rewards
Program

1 2 3 4 5 6 7 Shopping
commerce

Source: Itaú BBA, Bloomberg, Fortune, Grab, Go-Jek and Statista.

16
Successful Super-App Case Studies in Asia

Grab and Go-Jek: The Super-App Race in Southeast Asia

E-Wallets as a Key Strategic Pillar for Grab and Go-Jek
 Southeast Asia: an underbanked region and an opportunity for e-wallets. Southeast Asia is a historically underbanked region, where only 47% of adults have a bank account and only one-third of its
small and medium-sized enterprises (SMEs) have access to loans or credit lines. Companies like Grab and Go-Jek have therefore been expanding beyond ride-hailing to offer financial services to their
customers via e-wallets – by building new products, acquiring existing fintechs and forging relationships with new fintech partners.
 Grab’s and Go-Jek’s e-wallets have been reducing payment-related friction: a strategy to potentially boost user frequency. In 2016, both Grab and Go-Jek ventured into financial technology with the
launch of GrabPay and Go-Pay, respectively. The convenience of using an e-wallet to pay and tip drivers has been reducing payment-related friction in the region, and could therefore potentially boost
user frequency for both companies. As a matter of fact, most mobile-wallet services require bank or credit cards to add funds. Grab, for example, has been overcoming this problem by using its drivers as
collection points for users to purchase mobile-wallet credits. According to Go-Jek, roughly 50% of its 100 million monthly transactions are processed through Go-Pay.
 E-wallets have also played a key role in Grab’s and Go-Jek’s service expansion, with some banks offering products via these super-app contenders. We believe that e-wallets also contributed to the
expansion of services and new products offered through Grab’s and Go-Jek’s apps because payment solutions usually generate a lot of data on transactions and consumer behavior. Case in point, some
banks have already begun to benefit from partnerships with super apps like Grab and Go-Jek. Bank CIMB Niaga has acquired 940,000 new customers (most of whom were previously underbanked) by
opening new accounts for Grab and Go-Jek and it processes two million transactions per month from the drivers. Other banks, such as Bank Tabungan Negara, have been offering mortgage loans through
the Go-Jek app.
Grab and Go-Jek Have Been Expanding Their Financial Services and Taking Advantage of a Historically Underbanked Region
# of Adults w/ a Bank or Mobile Made or Received Digital Payments
Payment Account(%) 87% 90% in the Past Year (%)
100 70%
58% 62%
80
Build 33% 35%
60 22% 20%25% 18%23%
40
Buy 20

Vietnam
Singapore

Indonesia

Philippines
Malaysia

Thailand
2011 2014 2017

Singapore Malaysia Thailand

Partner
Indonesia Philippines Vietnam
2014 2017
Source: Itaú BBA, Bloomberg, Fortune, Grab, Go-Jek, CB Insights, Nikkei Asian Review, Global Findex Database and WorldBank.

17
Successful Super-App Case Studies in Asia

Grab and Go-Jek: The Super-App Race in Southeast Asia

A Brief Look at Ride-Hailing Profitability: Uber Case Study Uber Has Been Steadily Growing Revenues Since 2016; Operational Losses Are Part of the
Strategy to Expand Monthly Active Consumers on the Platform
 Grab and Go-Jek are not listed and do not disclose their financials, but Uber can be a good
proxy for ride-hailing profitability. Eighty-four percent of Uber’s revenues come from ride- Uber’s P&L (in USD millions) Monthly Active Consumers (in millions)
hailing and can be a good proxy for the potential profitability of Grab’s and Go-Jek’s businesses. 15,000 100

 Uber is still far from profitability due to driver incentives and user discounts. Uber has been 10,000 80
growing revenues exponentially through high-frequency ride-hailing and expansion to other 5,000 60
segments such as food delivery. However, it continues to generate net operating losses, mostly 0
due to user discounts and driver incentives to boost user frequency within the app. The same 40
-5,000 2016 2017 2018
seems to be valid for Grab’s and Go-Jek’s platforms, both of which expanded into food delivery. 20
 Competition poses a challenge to profitability. Uber has been facing fiercer competition from 0
Didi and Lyft, as seems to be the case in the price war between Grab and Go-Jek.

3Q18
3Q16

3Q17
2Q16

2Q17
1Q16

4Q16

4Q17

2Q18
1Q17

1Q18

4Q18
Revenue Operational Loss

Uber’s Gross Bookings and Revenues Have Been Mostly Offset by Driver Incentives Uber’s IPO Generated the Fifth Weakest One-Day Return for a Company in the Past 24 Years,
and Initiatives to Stimulate Uber Eats, Its Food-Delivery Business Due to U.S. Tariff Tensions With China, but Profitability is Expected to Improve Ahead
Uber: Financials and Operating Model (2018, in USD billions) Uber Stock Price (UBER US Equity) – in USD
46
44 US and China Tariff Tensions
-39.0 42
49.8
40
-0.8 0.9 Uber’s valuation at its IPO
10.8 10.0 -9.1 38
was of USD 82 billion. Self-
Core Platform

Core Platform

Core Platform
Incentives
Driver Incentives

Operating Costs,
Gross Bookings

36
Adjusted Net
Net Revenue

driving cars and new

and Driver and

Marketing…
Excess

Revenue
Restaurant

Revenues,

34 services (Uber Eats) could

Earnings

Profit
Cost of

be alternatives to make the

17-May
19-May
9-May

13-May

27-May

31-May

4-Jun

10-Jun
21-May

25-May

6-Jun
11-May

23-May

29-May

2-Jun

8-Jun
15-May

12-Jun
company profitable ahead

Source: Itaú BBA, Uber Prospectus and Bloomberg.

18
Successful Super-App Case Studies in Asia

Shifting Gears: Meituan-Dianping and Ele.me – The Food-Delivery Battle in China

O2O Food-Delivery Platforms in China: Only One Player Currently Stands Out as a Potential Super App
 Meituan-Dianping: the O2O food-delivery giant in China. Meituan-Dianping is one of the most representative online-to-offline food-delivery platforms in China, with more than 12 million daily orders. Meituan was
founded in 2010 by Xing Wang (also founder of Xiaonei, the Chinese Facebook) as a platform for retail and online group buying. It then expanded to other services via a merger with Dianping (food-review app similar to
Yelp in the U.S.) and the acquisition of Mobike (bike-sharing). It currently offers a wide array of services that include hotel booking, car-hailing and on-demand grocery delivery. The company has Tencent as one of its
main shareholders and, after its IPO in Hong Kong in September 2018 (valued at USD 51 billion), it added 340 million users and 4.7 million merchants to its platform.
 Ele.me: the O2O Chinese food-delivery contender. Ele.me (which means “Are you hungry?” in Mandarin) is the second largest online-to-offline food-delivery platform in China, with more than nine million daily orders.
The company was founded in 2008 by Mark Zhang and Jack Kang as a food-delivery service in Shanghai, and has remained exclusively in the food-delivery segment since then. Ele.me acquired Baidu Waimai (third-
largest food-delivery player in China) in 2017 to gain share, bulk up its consumer data and tie the battle with Meituan-Dianping. The company is backed by Alibaba, China’s tech giant, which acquired control of Ele.me in
2018 for an implied valuation of USD 9.5 billion, following its investment of USD 1.5 billion via Ant Financial in 2016.
 Super-app contenders: Meituan-Dianping is the main candidate at this point. We believe that Meituan-Dianping is currently the main candidate for super-app status at this point, given the rapid expansion of its
platform to other services, while Ele.me has been exclusively concentrated in the food-delivery business. We nonetheless note that neither company has expressed the intention to become a super app, focusing instead
on dominance of the food-delivery segment, which is a key pillar of Tencent’s and Alibaba’s strategy to combine online and offline shopping.

Both Meituan-Dianping and Ele.me Are Focused on Food Delivery... …Only Meituan-Dianping Has Expanded to Other Services
Meituan-Dianping: Expansion of Service Categories
On-demand
food delivery
Founded in and hotel Acquires Founded as a Ant Financial invests Alibaba Group
Beijing as a Group booking services Meituan and Mobike, a bike- food-delivery USD 1.25 billion in acquires Ele.me for Food Attraction Supply Chain Car- Bike-
Buying website are added Dianping merger sharing firm service in Shanghai Ele.me USD 9.5 billion Local Deals Delivery Ticketing Solutions hailing Sharing

2010 2012 2013 2014 2015 2018 2008 2015 2016 2017 2018 2010 2012 2013 2014 2015 2016 2017 2018

GA led a USD 300 Series F (USD 630 MM) Acquires Baidu Movie Hotel Air/Train Payments Grocery
Movie-ticketing Series D IPO at implied Waimai for USD
MM series C funding Ticketing Booking Ticketing and ERP Store
service is added (USD 200 MM), valuation of 800 MM
funding round
including USD 51 billion
Tencent
Source: Itaú BBA, Meituan-Dianping, Ele.me, Hackernoon, Nikkei Asian Review.

19
Successful Super-App Case Studies in Asia

Meituan-Dianping and Ele.me: The Food-Delivery Battle in China

Tencent vs. Alibaba: From Mobile Payments to Food Delivery
 Big-Tech Conflict in the Food-Delivery Business: Tencent vs. Alibaba. The battle between Meituan-Dianping and Ele.me underscores the underlying conflict between Tencent and Alibaba. China’s two
most valuable tech companies have risen to the top in different ways – Tencent rules China’s social media and entertainment world, while Alibaba dominates the country’s e-commerce – but they have
increasingly crossed paths over the past few years. Meituan-Dianping is the market leader, with a 59% share, and has been well-funded through several equity offerings and an IPO by Tencent. However,
Ele.me’s increasing funding rounds via Alibaba have been intensifying competition in the segment, and Ele.me has been trying to attract customers and gain market share via discounts.

Not Just Food Delivery: A Larger Plan Behind China’s O2O Giants
 O2O food delivery: key to boosting payments and the new retail strategy. Tencent’s and Alibaba’s focus on demand services, or online-to-offline (O2O), also depends on their intention to grow payment
services (WeChat Pay and Alipay, respectively), given that food delivery is a high-frequency business. As a matter of fact, Ele.me’s delivery platform currently uses Alipay, the e-wallet developed by
Alibaba affiliate Ant Financial, as its default payment method. More importantly, the food-delivery platforms are meant to be a cornerstone for Tencent’s and Alibaba’s new retail strategies. Meituan-
Dianping and Ele.me have been renovating China’s retail sector by analyzing customer data more efficiently and integrating online and offline shopping (O2O). With their large delivery teams, which are
already delivering meal orders in 30 minutes or less, both can support Tencent’s and Alibaba’s logistics operations with the long-term goal of delivering any item to customers’ homes within 30 minutes.

Tencent and Alibaba Have Been Battling in China; Meituan-Dianping Leads the Way in Funding Rounds, but …Though Ele.me’s Fire Power and Increasing Discount
Food Delivery as a Strategic Pillar in Their O2O Plan Alibaba Has Been Bolstering Ele.me… Policy Have Yet to Boost Market Share
Alibaba vs. Tencent (Market Share, in %) Funding Rounds (USD m) Food-Delivery Market Share (in GTV, %)
4,000 59.1%
56.0%
Food-Delivery 3,300 46.7%

E-commerce 31.7%
35.4% 36.0% 36.0%
1,300 36.8% 9.9%
Digital advertising 850 16.5% 4.9% 3.8%
980 1,000
2 25 3 100 64 15.0%
8.0% 3.1% 1.1%
Mobile payments 25 80
2015A 2016A 2017A 1Q18A

2011
2009

2012
2006

2016
2010

2013

2014

2015
2007

2008

2017
0% 20% 40% 60% 80% Meituan-Dianping Ele.me

Alibaba Tencent Meituan-Dianping Ele.me Baidu Waimai Others

Source: Itaú BBA, Meituan-Dianping prospectus, Hackernoon, Nikkei Asian Review, Forbes and CB Insights.

20
Successful Super-App Case Studies in Asia

Meituan-Dianping and Ele.me: The Food-Delivery Battle in China

Food Delivery: A Fast-Growing, High-Frequency Segment
 Food delivery has been vital in generating recurrence in the app. Meituan-Dianping and Food Delivery is One of the Highest-Frequency Businesses Among Service Apps
Ele.me highlight the fact that exposure to a high-frequency business is an important step
Usage of Mobile Service App (%) Food Delivery Frequency (%)
toward the development of a super app. Food delivery is one of the most representative
segments in terms of mobile-service-app usage and user frequency in China. And the 79% 77%
71% 2-3 times a month 15.1%
segment is expected to be one of the fastest-growing consumer services in China until 2022. 60%
 Food-delivery data was crucial in Meituan-Dianping’s strategy to expand its platform to
other services. Meituan-Dianping has the best data on where consumers are, the location of 1-2 times a week 32.4%
25% 25%
restaurants and the best routes based on delivery. That said, Meituan-Dianping understood
that compiled data on local traffic and transportation would make its ride-sharing service 3-5 times a week 33.7%
extremely efficient. In 2017, the company launched ride-hailing in a few selected cities in
China and, in the following year, it acquired Mobike (bike-sharing), giving Meituan a greater Food Ride Cashless Grocery Bike Car
+1 times a day 13.1%
advantage over its competitors Didi Chuxing and Ele.me/Alibaba in terms of scale, dimension Delivery Sharing Payment Service Sharing Rental
and granularity.

Food to be One of the Fastest-Growing, Consumer-Service Segments in China Ele.me’s Discount Policy Seems to be Affecting Meituan’s App Frequency
4,000 E-Commerce Market Size Breakdown # of Downloads (in million) Sessions per User (x)
in GMV (RMB in billions) 10.9
3,000 9.6 3.5
8.4 8.8
7.9 3.0
2,000
5.7 8.8 2.5 2.5 2.4
7.3 7.1 2.2
1,000 6.6 6.7 2.7 2.7
2.5 2.4
2.2
0 3.5 2.0
2016a 2017a 2018e 2019e 2020e 2021e 2022e nov/18 dez/18 jan/19 fev/19 mar/19 abr/19 nov/18 dez/18 jan/19 fev/19 mar/19 abr/19
Food Consumption Hotel Booking Travel-related Services
Local Transportation Other Services Meituan-Dianping Ele.me Meituan-Dianping Ele.me

Source: Itaú BBA, Meituan-Dianping prospectus, iResearch, Lightspeed (Usage of Mobile Service App - Australia, China, Hong Kong, India, Singapore, Thailand and Indonesia), Daxue Consulting and Similar Web.

21
Successful Super-App Case Studies in Asia

Meituan-Dianping and Ele.me: The Food-Delivery Battle in China

A Glance at Meituan-Dianping’s Financials: Still a Bumpy Road Ahead Revenues Have Been Growing Exponentially, but Costs Have Been Expanding at a Stronger
Pace Due to Merchant Incentives and New Initiatives Like Ride- and Bike-Hailing
 Food delivery is a competitive market in China; as such, incentives and discounts are key
to retaining purchase frequency within the app. Meituan-Dianping’s exponential growth in 80,000 55% 58% 89%
the number of transactions has been offset by merchant subsidies and customer incentives
through discounts and coupon packages. Given Ele.me’s aggressive discount strategy to 60,000 45% 24%
attract customers, Meituan-Dianping seems far from profitability. Customer loyalty is hard to 17%
come by in the food-delivery business, with the majority of customers often opting for the 40,000 35% 14%
platform that offers the cheapest meals.
20,000 25%
 Food delivery seems profitable, but the new initiatives are lowering margins. Meituan- Food delivery In-store, hotel & New initiatives
Dianping has reported margin growth in the food-delivery segment, but new initiatives (such 0 15% travel
as car- and bike-hailing) have hurt profitability, especially given the company’s price battle 2016A 2017A 2018A -38%
with Didi Chuxing in China. Revenues (RMB, in th) Gross Margin (%) Gross Margin (%) % of Revenues

Incentives and Discounts to Sustain User Frequency Have Been Burning the Meituan-Dianping’s Stock Price Has Been Suffering Since Its IPO Due to Rising Net Losses,
Company’s Gross Profit, Leaving Meituan-Dianping Far From Profitability Headwinds in the Ride-Sharing Segment and the Ongoing Price War With Ele.me

Meituan-Dianping P&L Breakdown (2018, in RMB thousands) Meituan-Dianping Stock Price (HKG: 3690) – in RMB
75
Incentives, discounts, coupon packages 70 Scales back its ride-
50,122 to increase purchase frequency hailing business
65,227 65 “Customers will
15,105 -15,871.9 60 always go to the
-7,072 1,836.4 748.4
-5,832 -11,086 55 platform that has the
50 best discounts”
Costs

G&A expenses

Others
Gross Profit

FV Changes
Revenues

Operating Loss
R&D Expenses
Selling expenses

45
Pricing war
40 Operating Wang Lei (Ele.me CEO)
with Ele.me
losses widen
35
Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19

Source: Itaú BBA, Meituan-Dianping prospectus, Forbes and Bloomberg.

22
Section 3
The Super-App Race in Brazil:
Market Potential and Contenders
The Super-App Race in Brazil: Market Potential and Contenders
What we Learned From Super Apps Elsewhere Shed Light on the Brazilian Experience So Far
How is Brazil Different From China?
Privacy is More important to Brazilians Than to the Chinese
 Brazil is not as far from China in terms of privacy concerns as
developed countries, but trust issues in Brazil exist nonetheless. Even
now, Brazilians are a bit skeptical of providing credit-card information
digitally. Moreover, news of private-data leakage (e.g., Facebook with
Cambridge Analytics) did not help to build confidence.
Mobile Internet Still Below Levels in China
 Even now, the relevance of mobile in total e-commerce in Brazil is
42.8%¹, way below current levels in China, at above 70%. Additionally,
the market share of mobile internet usage in Brazil is currently at 26%,
significantly below China’s 54%.
Brazil is in a similar stage of
Government is a Sponsor, but at a Different Stage
super-app development as  The Brazilian Central Bank has been recently supporting competition,
outlining the next steps in open-banking regulations. That said, e-
Southeast Asia, not China, wallets face significant restrictions in Brazil for the time being. Digital
accounts cannot yet be attached directly to a bank account, for
as most of the key factors example.
that helped boost super Cash is Much Less Predominant in Brazil
 In 2010, cash was the payment method used in over 60% of total retail
apps in China are not transactions in China. In 2009, the figure in Brazil was only 31.5%.
There is consequently less payment-related friction on the consumer
present in Brazil. end of transactions, which could hinder the development of e-wallets
in Brazil.
Source: Itau BBA, IBGE, ABECS, eMarketer. 1) eBit dat for Jan-2019.
24
Super Apps in Brazil vs. Southeast Asia
Super Apps Start in High-Frequency-Usage Verticals
 In Brazil, we see five main verticals with the potential to start a super
app: Messaging, E-Commerce, Ride-Hailing, Food Delivery and
Payments.
Payments Could Help Increase Recurrence in the App and Expand
Services Offered
 Although the profitability of e-wallets is still questionable on a stand-
alone basis, they are a means for consumers to start using apps for
different purposes and to provide more flexibility for connecting with
different players at different verticals. Most super-app candidates in
Brazil have been adding payment features to their apps. Furthermore,
the possibility of a merger between these super apps and a finance
player cannot be ruled out.
Most Super Apps Are Still Far From Profitability
 Super-app candidates are still far from generating cash because
incentives for merchants and customers are a good way to increase
penetration and frequency. Funding, which will be essential to their
survival, is a key competitive advantage because it allows companies
to add more consumers and larger merchants and has a positive
network effect.
No Clear Super-App Winner at This Point
 It is still a many-lap race, and we only scratch the surface of this
discussion in the following pages.
The Super-App Race in Brazil: Market Potential and Contenders

Who Are the Key Contenders in the Most Promising Verticals for Super Apps?
 Players focused on developing a super app from the start are still a minority. Rappi is the only current example of this, after Glovo left the country a few months ago due to a lack of resources to grow. It
therefore seems that when venture capital funds pick an asset in Brazil, they are not guessing which player will lead the super-app race, but creating them. Most of Rappi’s competitors come from other
verticals, and they are racing to acquire customers and to invest a lot of growth capital.

 Local players from specific verticals have the advantage of a loyal customer base and a core area of expertise. Marketplace, ride-hailing and even food-delivery players are currently shifting their
businesses to include other services on their platform and to increase consumer engagement as they grow the top line through cross-selling. Uber is the best global example of such a move; Uber Eats
already ranks second in the U.S. food-delivery market, only three years after launching.

 International players pose a real threat to local players, given their developed global expertise, deep pockets and potential local and frequent-user base. Those that best fit this description are Facebook
and Uber. Although Amazon has not developed a substantial user base yet, recent SimilarWeb data suggest that a sizeable growth rate and expertise developed abroad could help to build a key, local
competitive advantage (as discussed on page 5).

Messaging Payment

Ride-Hailing Food-Delivery

Ecommerce
Source: Itaú BBA

25
Which Vertical Seems More Promising?
Social media and messaging are clearly the apps that attract the most consumers, but they are not in the vertical with the best potential for market size (yet).

Messaging Ecommerce Ride-Hailing Food-Delivery Payment

Market Sizes (R$ bn)

174
91
Digital

19 2 11

Digital Media Ecommerce Ride Hailing Food Delivery Digital Payments

4,392
1,715
Omni

32 206 524

Media Retail Public Transportation Food Retail & Food Service Payments (Including Cash)

# 1 App in DAU:
Penetration

(thousands)

63,666
DAU

3,449 2,729 769 406

Whatsapp MELI Uber Ifood Mercado Pago

Apps KPIs¹

80%
16% 9% 8% 8%
Open
Rate
Frequency

Whatsapp MELI Uber Ifood Mercado Pago

18.8x
Sessions
per User

2.9x 2.9x 3.2x 2.8x

Whatsapp MELI Uber Ifood Mercado Pago

Source: Itaú BBA, IBGE, Central Bank, ABIA, ABRASEL, EBIT, MELI, Statista, CENP, IAB, Similarweb. 1) Similarweb data (average between October and April).
26
Brazilian Contenders: International Players
Facebook is in the most promising vertical in terms of usage, Uber is most advanced in terms of products and service offerings, and Amazon is still incipient in Brazil.

Overview Globally, Amazon Rules But in Brazil, Amazon is Still Incipient

 Founded in 2004, Facebook runs the leading messaging apps in over USD billions² DAUs Brazil (millions) Open Rate in Brazil
200 countries¹, including Brazil.
Market Cap 499
Facebook

 It has started to move toward super-app status. The company is Facebook Uber Amazon
expanding into payments, marketplace and redesigning the user Whatsapp 63.7 80%
experience to focus on interactions with users outside of its apps GMV nm
through their home screen. Cryptocurrency is also in Facebook’s
pipeline for 2020 and should help in its payment endeavor. On the Ads
Facebook 35.5 54%
other hand, the company recently discontinued its P2P transaction Sales 56
payments in Europe without much explanation, which could mean Payments
either a complete shutdown in those geographies or the start of a
Instagram 27.4 54%
revamping process.

 Uber was founded in the U.S. in 2010 and is currently present in 63

countries and over 700 cities, totaling 17 million daily trips. The Market Cap 72 Messenger 19.2 37%
company began operating in Brazil in 2014 and is the leader in the
Uber

Rides
ride-hailing vertical.
GMV 50 Facebook
 Uber has been investing in payments and loyalty through Instant 5.2 55%
Uber Eats Lite
Pay (a digital wallet for drivers) and Uber Cash (a loyalty platform
through which consumers can purchase its services or those of other Sales 11
partners). Uber added to its platform food delivery (Uber Eats) and Uber 2.7 9%
bike trips (through the acquisition of JUMP Bikes).
Messenger
 Amazon is the largest of all three global players in Brazil with a 2.5 38%
Lite
potential claim in the super-app race. Although the company was
Amazon

founded in 1994, it started its operations in Brazil in 2012 with a less- Market Cap 916
than 1% share in e-commerce, according to our estimates. Uber Eats 0.1 3%
 In 2017, the app expanded to other categories in Brazil through the GMV 1P 3P 277
marketplace; it did the same with its 1P business earlier this year,
driving a recent increase in traffic data, according to SimilarWeb. Amazon 0.1 2%
DAUs in the app more than doubled in May 2019, relative to one year Sales 233
ago.
Source: Itau BBA, Google Finance as of June 10th 2019, SimilarWeb, 1) Hootsuite, only in the Andorid platform; 2) GMV and sales data are relative to 2018 and market cap, relative to 10-Jun-2019.

27
Is Winter Coming?
Facebook clearly regrets not having taken WeChat’s steps before, based on its CEO’s response to a journalist’s report – but it may not be too late.

Growing Social-Commerce Adoption

% Social Commerce Adoption of Retailers
in North America¹
33%

17%

2017 2018

Facebook Leads the Messaging Vertical on Android Phones in Over 200 Countries
Top Messenger Apps by Country²

Whatsapp (133)
Facebook Messenger (75)
Viber (10)
Imo (3)
Line (3)
Telegram (3)
Wechat (3)
Google Messages (1)
Hangouts (1)
Kakaotalk (1)
Zalo (1)
Unknown (11)
Source: Itau BBA, Facebook, Hootsuite, eMarketeer. 1) Survey conducted with 107 retailers by Retail TouchPoints wiith the question “Which channels do you currently conduct business in?”; 2) Similarweb, January 2018, based on the Google Play app store rank for 2018. figures in
parentheses in the legend represent the number of countries / territories in which each platform is the top-ranked messenger app.
28
Food delivery: The addressable market is huge and disruption is helping new players grow rapidly

Rappi Has Been Successful While Food Retailers’ Apps Are Losing Momentum
 Food service is still a very fragmented market in which iFood, the leader in food
delivery, has a less-than 6% market share. App Downloads (thousands) Daily App Users (thousands)
1,026 1,119 163 163
 However, a much improved service level (driven by several tech-related changes), could 903
150
yield a share gain in deliveries where scale is a key competitive advantage. New players 114 110
will improve in usability and logistics as they grow. 95
107
91
98
458 90
 As delivery becomes more convenient and accessible, these players may gain share of 339 348 369 368
64
52 57 77
pocket from food retailers, given that the share of food cooked at home could decrease 219 177 208 244 255
47
41
31 35 36 34
141 42
relative to deliveries. Rappi might be the player best positioned to gain share in this 135 120 32
25 30
38 39
22 21
market because it delivers ready-made meals as well as food-retailers’ orders. 78 60 62 64 62 86 96 89 17 17 17 16

Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19

Rappi Clube Extra Carrefour Pão de Açucar Mais

Addressable Market for Delivery Players is Huge iFood is the Leader in Brazil, but Uber Grew Very Rapidly Elsewhere

Estimated Market Sizes and Growth Rates Market Share in Brazilian Food Service¹ Market Share U.S. Food Delivery
524 6% 0.4%
109% 0.4%
26% 25% 20%
2% 2% 2%
12%
10% 12%
352 7% 8%
9%
3% 13% 24%
172
52%
40% 34%
10 11.5% 10.1%

Ifood Food Service Food Retail + Food Service 2016 2017 2018
94%
Grubhub Uber Eats Postmates
Market Size (BRL billion) Growth YoY 2018
Ifood Rappi Uber Eats Others DoorDash Caviar Other

Source: Itaú BBA, ABIA, ABRASEL, Newsrusn. 1) Ifood revenues based on data based on BRL 370mm in revenues released in an Exame’s news, a net take rate of 8% and the yearly orders growth rate released by e-commercebrasil. Data or Uber Eats and Rappi was based on their relative DAUs shares as per Similarweb.

29
Brazilian Contenders: Food Delivery as a Core
It seems that capturing daily active users on the consumer end is a much harder competitive advantage to beat than on the drivers’ end.

Rappi is the Most Complete Platform iFood is Losing Momentum but is Still 7x Larger Rappi is Catching Up Fast in its Delivery App

Other Verticals per Player Daily Active Users (thousands) Delivery Team’s Daily Active Users (thousands)
1000
40
800
30
600
20
400
# of Cities
20  70 635 15  0 41 10
in Brazil 200

Ride- 0 0
Hailing Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
Food Rappi Ifood Glovo Uber Eats
Delivery
Soy Rappi Ifood (Delivery Men) Loggi (Delivery Men)
Digital
Wallet
Frequency Indicators are Also in iFood’s Favor¹ Ratio Consumers’ DAUs / Delivery Team’s DAUs
Local 100.0x
Services* 2.8x
8.0% 80.0x
Package 2.2x 2.2x
Delivery 60.0x
5.1% 1.6x
Trip 40.0x
3.9% 3.3%
Planner
20.0x
Shopping
commerce 0.0x
Ifood Rappi Glovo Uber Eats Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
Rappi Ifood
Open Rate Sessions per User

Source: Itau BBA, Crunchbase, Abrasel, Techcrunch, Valor, Companies’ platforms. 1) SImlarWeb Data, Average since Sep-18; 2) Glovo considers only the average between Nov-18 and Feb-19.

30
iFood Profile: The First Mover and Leader in the Online Food-Delivery Space

Company Overview iFood’s DAU Doubled in Just a Few Months Frequency is Also Growing
 iFood in Brazil was founded in 2011 by Movile, a VC that Consumers’ App Consumers’ App
invested in the company in 2011. Movile also functions as a
group and tries to explore synergies among its invested 804 915 870 4.1x
780 8%
companies. With iFood’s help, Movile wants to reach 3,000 717 721
3.2x 3.2x 3.2x
restaurants in 2019 with its acquiring business, Movile Pay. 574 3,300 9%
535 2.7x
 With revenues of ~BRL 370 million in 2017 (estimated GMV of 2,873 8% 3.4x
BRL 10 billion in 2018), iFood is the largest delivery platform in 8% 8%
2,300 2.8x 8%
Brazil, reaching over 600 cities and three countries. Through 2,100
1,857 1,700 1,700
the years, i-Food also grew by acquiring competitors like 1,600 7%
7%
SpoonRocket.

KPIs Evolution (000) Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
390 580
187 Downloads (000) Daily Active Users (000) Open Rate (%) Sessions per user
63 120 27 50 66

Daily Orders Delivery Men Restaurants in the Delivery Team Base is Also Growing Rising Competition, Declining Usage
Platform
2017 2018 Mar-19
Delivery Team’s Exclusive App Delivery Team’s Exclusive App
Capital Raised 27 26
24 28.1x
 iFood has raised less than half the capital of its competitor, 11%
12% 10% 10% 10%
Rappi, until now. 18 177 161
 Movile participated in most investment rounds. In the last 155 8%
and larger round, Napsters was also a key investor. 11 130
592 9
11.4x 11.3x
92 500 57 9.7x
1.6 4.2 6.2 12 62 47
30 6.4x 6.1x
1.6 2.6 2 5.7 50
Aug-11 Feb-13 Feb-14 Sep-14 Jun-15 Jul-16 Nov-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19

Capital Raised (USD million) Downloads (000) Daily Active Users (000) Open Rate (%) Sessions per user

Source: Itau BBA, Crunchbase, Abrasel, Techcrunch, Valor, Companies’ platforms, Similarweb, e-commercebrasil.

31
Rappi’s Profile: Poised to Grow After a Record Capital Raise

Company Overview Users Have Been Accelerating (2.5x) in 2019… …Leading to a Slight Decline in Frequency
 Founded in 2015 in Colombia, Rappi is currently present in seven Consumers’ App Consumers’ App
LatAm countries.
1,026 1,119 2.9x 2.7x
 The Brazilian operation, which started in 2016, is growing in 903 2.6x 2.7x 2.7x
importance. It currently accounts for 25% of sales and will soon
surpass Mexico (~40% of sales) as the leading country for the 98 6% 2.3x
90 6%
company.
458 77 6%
 In the last 12 months¹, Rappi has delivered 70 million orders 369 368 5% 5%
339 348 5%
to 6.5 million customers.
42 47 1.9x
 Rappi just raised USD 1.2 billion in a new capital increase. The 38 39
32 4%
proceeds will be used to expand from 20 to 70 cities in Brazil 3%
over the next few years (40 by the end of this year) and to invest
in technology to pursue the super-app track. Targeted cities are Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
those with a population of more than 400,000. Downloads (000) Daily Active Users (000) Open Rate (%) Sessions per user
 Partnerships with national retailers, like Carrefour, will help
Rappi to expand and engage with their customers.
Soy Rappi’s Delivery Team is Growing… …but Frequency is Volatile
SoftBank’s Investment in 2019 was a Game-Changer²
 The company’s Series B investment round in January 2018 was a Delivery Team’s Exclusive App Delivery Team’s Exclusive App
record for a LatAm-based company. With the Series C in August 132 138 16%
2018, Rappi became the region’s third unicorn. The series C was 16.7x 15%
valued at USD 3 billion by SoftBank and former investors, and 98
became the most valuable private tech company in the region.
30 13% 13%
1,692 63
24 12.9x
39 22
34
9.0x 7.3x
392 1,300
62 192 13
0.1 0.1 0.2 0.2 9.2 200 10 10 10% 3.7x
130 10% 3.2x
0.1 0.1 9.0 52.8
Jan-15 Mar-16 Mar-16 May-16 Nov-16 Dec-16 Jan-18 Aug-18 Apr-19 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
Capital Raised (USD million) Downloads (000) Daily Active Users (000) Open Rate (%) Sessions per user

Source: Itau BBA, Crunchbase, Abrasel, Techcrunch, Valor, Companies’ platforms an meetings, Similarweb. 1)Previous to May-19; 2Raise of 2019 was adjusted from USD1 billion, as per Crunchbase, to USD 1.3 billion, as per newsrun.

32
Other Player Profiles: A Newcomer and the One Who Left the Race

Uber Eats: Company Overview Like Rappi, Uber Eats Accelerated in 2019 Uber Eats Has Stable Frequency Indicators
 Uber Eats was launched by Uber in 2016 and gained share Uber Eats Uber Eats
fast in the U.S., where it currently has a 24% market share 2.7x 2.7x
and is the second-largest player in online food delivery. 1,450 2.8x 2.5x 2.3x
2.4x 2.3x
 After growing 58% YoY, this vertical made up 27% of GMV in 1,160
1Q19, up from only 7% in 1Q17. Consumers who use both 1,038 120 4% 4%
Personal Mobility and Uber Eats services had 11.5 trips per 3% 4%
527 91 3% 3%
month relative to 4.9 for those not engaged in food delivery. 569
551 506 398 74 3%
2%
 Uber Eats accounts for 220,000 restaurants (from over 500
cities using its platform), and it recently launched an 61 44 49
42
“aggregator” feature in which restaurants use their own 33
couriers.
 Uber entered the food vertical in Brazil in 2016. This Brazilian Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
player is larger than Rappi in DAU and has comparable Downloads (000) Daily Active Users (000) Open Rate (%) Sessions per user
frequency indicators.

Glovo Has Raised Way Less Capital Than Rappi… …So it Decided to Leave Brazil
Glovo: Company Overview
 Glovo was founded in Spain in 2015 and entered the Brazilian Glovo Glovo
market in 2018 in the hopes of making Brazil its largest 1,692 331
market, but it opted out in March 2019. 289
253 261
 Glovo has so far raised only USD 0.3 billion globally, 52
considerably less than the USD 1.7 billion raised by Rappi.
The company therefore decided that the Brazilian
market is too competitive and decided to opt out. 33
27 28 77
 Glovo is also investing in the physical segment to sustain 338
169 32
growth. At least seven dark kitchens and four mini 0.1 2.3 2.3 7.9 41 169
supermarkets have opened in Europe so far. 128 8 3
0 2 6 33
 70% of Glovo’s business is food, followed by groceries, Rappi Mar-15 Nov-15 Dec-15 Aug-16 Sep-17 Jul-18 Apr-19 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
courier and pharmacy.
Capital Raised (USD million) Downloads (000) Daily Active Users (000)

Source: Itau BBA, Crunchbase, Abrasel, Techcrunch, Valor, Companies’ platforms, Similarweb, Uber filings.

33
Brazilian Contenders: Ride-Hailing as a Core
Transportation is a huge market and a great platform from which to grow other verticals.
Bus, Private Cars and Walking are the Preferred Means of Transportation in
Market Overview
Brazil
 Although ride-hailing could remain out of reach for the lower-income and rural
45% Most Used Transport Mean (Survey in 2017)¹
population, the addressable market is huge. Moreover, as ride-hailing becomes
cheaper and more user friendly, it could even create new markets. Walking, for
instance, is still the key means of transportation for 22% of the population, but it is 22% 22%
obviously not accounted for in any market-sizing analysis. If Uber’s autonomous car
endeavor is successful, it could lower transportation costs and help substitute walks.
That said, scooters and bike-sharing may be the plays to disrupt this segment, given 5.1% 4.6% 4.1% 2.6% 2.5% 1.5% 1.4% 1.0% 0.9% 0.5%
that they are often cheaper and more convenient.
 The high frequency of this kind of service makes it an excellent platform from which to

Collective

Taxi
Private Bicicle
Walk

(Uber Cabify...)

Mototaxi
Metro
Motorbike

Carpooling
Private Car
Bus (public

Train
transport)

Employer-
Private
Private

Owned
grow other verticals. Uber Eats is growing even faster than Uber’s core ride-sharing

Apps
business globally. Ride-sharing grew 32% YoY in 2018, while food delivery multiplied by
1.7 times.

Ride-Hailing is an Excellent Platform Through Which to Start Growing Other

Total Transportation Market Businesses
Estimated Market Sizes (BRL billion) Uber’s Gross Bookings (USD millions) 14
810 13
12 0.1
10 11 0.1 2.6
9 0.1 2.1
8 1.8
1.1 1.5
75% 7 0.8
0.6
206 0.4
10.2 10.5 11.5
8% 9.2 9.4
30% 7.5 8.2
62% 25% 6.5
1.8
Ride-Hail Public Transportation Total Market
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Other Long Distance Taxi Public Transportation Private Transportation²
Ridesharing Uber Eats Other Bets
Source: Itaú BBA, IBGE, Second Measure, CNT. 1) Survey made by CNT with over 6500 people; 2) Calculated as total private consumption times the weight in IPCA (which simulates the weight in the consumption basket) of fuels and private vehicle.

34
The Unit Economics of Ride-Hailing vs Food-Delivery: Uber’s Case Study
Although food delivery charges a take-rate for all deliveries, it converts less GMV into revenues due to the cost of delivery relative to its delivery fees.
 Excess driver incentives are any amount paid to a driver that exceeds the revenue earned on any given trip (USD 2 in the example below). This expense increased by about USD 300
million in 2018, driven by the growth of Uber Eats, where drivers’ earnings exceed the delivery fees. In 1Q19 alone, food delivery converted 12.5% from GMV to adjusted gross revenues, vs.
22.5% for ride-hailing. In short, the take-rate charged for products sold (~25%) did not make up for the higher delivery costs relative to fees.
 However, if competition in the ride-hailing business increases, excess incentives in this vertical could become more frequent and further limit GMV conversion into adjusted net revenues.

Example of Uber’s Unit Economics for Both Businesses Suggests That Fewer Driver Incentives Could Help Uber Eats Convert More GMV into Revenues

Unit Economics Uber Trips (USD) Unit Economics Uber Eats (USD)
Without Excess Driver
Incentives
With Excess Driver
Incentives

Increase Decrease Total

Source: Itaú BBA,Uber’s registration statement.

35
99 and Uber Compete Head to Head in the Ride-Hailing Segment in Brazil

99 Company Overview 99 Seems to Still be Growing… …But There is Likely Some Seasonality in Frequency
 Founded in 2012, 99 became the first Brazilian unicorn in 2018, 99 99
when it was acquired by Chinese giant Didi. Didi’s network
1,430 1,450 1,450 3.6x
connects 450 million users with 21 million drivers in over 1,000 3.6x
cities. 99 connects 18 million passengers with 600,000 drivers. 1,340 13%
1,320 3,800 12%
 99 began as a taxi-only service, but it moved to ride-sharing 12%
1,250 3.4x
when Uber entered Brazil. 3,600 3.4x
243 3.4x
1,150 3.3x
143
100 3.3x
43 2,800 10%
3.0 18 100 2,600 2,600 10% 10%
25 10%
3 15 2,300 2,200
Jul-13 Feb-15 Apr-15 Jan-17 May-17 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19

Capital Raised (USD million) Downloads (000) Daily Active Users (000) Open Rate (%) Sessions per user

Uber Company Overview

Uber Has Almost Double the DAU of 99 While Uber’s Frequency is Slightly Below 99’s Levels
 Uber was founded in the U.S. in 2010 and is currently present in
63 countries and over 700 cities, totaling 17 million daily trips. Uber Uber
 Uber has been investing in payments and loyalty:
4,800 11%
 Instant Pay (2016). A digital wallet through which drivers are 3,030
2,910 10%
paid daily, not weekly. Cash-out is available anywhere 2,810 10%
4,700
through a debit card. 2,620 2,630
 Uber Cash (2018). A loyalty program through which 3.1x
2,480
2,620 3.0x 9%
consumers can acquire products and services within Uber’s 9% 9%
4,000 4,000
platform – mainly ride-sharing, Uber Eats deliveries and 3,900 9%
bike trips through the recently-acquired JUMP Bikes. 3,700 2.9x 2.9x
3,500 2.9x 2.9x
 The company has been present in Brazil since 2014. From what 2.8x
we’ve seen, the recent acquisition of Easy Taxi from Cabify has
Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19
not significantly changed its operations. Easy Taxi’s DAU is
around 5-10 thousand, while Cabify’s is 12 to 21 thousand. Downloads (000) Daily Active Users (000) Open Rate (%) Sessions per user
Source: Itau BBA, Crunchbase, Abrasel, Techcrunch, Valor, Companies’ platforms, Similarweb, Uber’s filing, 99 websites.

36
Brazilian Contenders: Payments and Marketplace
 Digital payments and retail operations are still incipient relative to comparable offline segments. The e-commerce market is also very fragmented, whereas payment newcomers are
quickly gaining share.
Growing E-commerce Penetration and a Lot of Potential Penetration of Cards in Brazil Continues to Grow

Estimated Market Sizes (BRL trillion) 4.0 4.2 4.4

1.9 1.9 2.0 2.1
1.8
1.6
1.4 4.4%
1.3 3.7% 35%
32%
3.1% 30%
2.7%
2.1% 2.3%
1.7% 1.8%
1.3 1.4 1.6 1.8 1.8 1.9 1.9 2.0 2016 2017 2018

2011 2012 2013 2014 2015 2016 2017 2018 Other Means of Payment Credit & Debit Transactions

Offline Retail E-commerce E-commerce penetration in Retail Cards Transactions (% of Consumption)

E-Commerce Has Been Growing Rapidly, as Has Mercado Libre’s Share New Entrants Gaining Share From Incumbents as the Market Expands
Estimated Market Share (BRL billion) Estimated Market Share (BRL trillion) 1.5
90.5 1.4 9%
73.4 1.2 5%
8%
7% 3% 5%
60.2 41% 4%
49.6 2%1% 11%
12%
9%
41.4 29% 28%
34.1 8% 32%
8%
44% 17%
5% 49% 46% 41%
14% 27%
22%
15%
2013 2014 2015 2016 2017 2018 2016 2017 2018
Mercado Livre B2W Via Varejo Magazine Luiza Others Cielo Redecard Santander GetNet Stone PagSeguro Others TOTAL

Source: Itaú BBA. EBIT< IBGE, Findix, ABECS, Company Filinings..

37
Mercado Libre: Leadership in Payments and Marketplace, Second Only to Facebook in App Usage

Company Overview Mercado Libre Has Higher DAUs Than Peers The Same Applies to Open-Rate KPI
 Mercado Libre was founded in 1999 by Marcos Galperin and
DAUs (millions) ¹ Open Rate¹
Hernan Kazah in Argentina. Present in 18 countries, with a 27%
share in the Brazilian market, the company leads the e-
3.4
commerce space in its regions of operation. 16%
2.7
 Mercado Libre started as a C2C operation and is growing its 11% 11%
official stores to foment scalability and more formal sellers. 9%
1.3 8% 8%
 Its IPO in 2007 raised USD 0.3 billion, at a valuation of USD 0.8 0.8 0.5 5%
0.4 3% 2% 3% 3% 2%
billion. MELI is currently valued at USD 31 billion and recently 0.07 0.06 0.06 0.03 0.02 0.02
raised USD 1.8 billion to invest in its financial and e-commerce

Amazon
Mercado Pago
Ifood

Uber Eats
MELI

99

MGLU

Rappi

Carrefour
Uber

Ame

Yellow
businesses, particularly financial technology and logistics. PayPal

Mercado Pago

Amazon
Ifood
MELI

99

Uber Eats

Rappi
MGLU
Uber

Carrefour
Ame

Yellow
was a key investor in this round.
 Mercado Pago’s TPV is USD 18.5 billion. Thirty-four percent of
payments in 2018 were made outside of Mercado Libre’s e-
commerce platform, of which 15% were made through e-wallets.
Its off-us operation alone already represents 30% of PagSeguro
and Stone combined, and its potential to grow in the seller- and
consumer-financing arena is huge – 75% of merchants reported Mercado Libre’s Growth in 2018 was Affected by Logistical Setbacks in Brazil and by FX Changes
a financing need, but only 18% had access to traditional bank
Total GMV and TPV (USD billions) Brazil Estimated GMV and TPV (BRL billions)
loans. The company also has a substantial seller base of 6.4
million vendors. 78% 56% 56%
41% 47% 50% 40%
34% 27%
 Regarding logistics, Mercado Libre relied heavily on third-party 18% 6%
providers until the Brazilian Correios started to aggressively 46%
1% 13% 6% 18.5 32.4
increase its fees in 2018. Since then, the company has begun to -3%
13.8 23.2 24.2
invest in its own distribution centers and in start-ups, such as 11.7 12.5
recently-acquired Axado (BRL 26 million). 2,248 17.3
7.3 7.1 7.2 8.0 7.8
5.2 11.1
3.5 5.3 5.6 7.1
1,850 2.5
109 398
8 54 82
8 47 28 28 289
2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018
Nov-99 May-00 Feb-07 Feb-17 Aug-17 Mar-19
GMV TPV GMV YoY (%) TPV YoY (%) GMV TPV GMV YoY (%) TPV YoY (%)
Capital Raised (USD million)
Source: Itau BBA, Crunchbase, Abrasel, Techcrunch, Valor, Companies’ platforms, Similarweb, 1) Does not consider any of Facebook’s platforms; Similarweb average data from Oct-18 to Apr-19.

38
Disclaimer
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39
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Relevant Information – Analysts
Disclosure Items
Analysts
1 2 3 4
Enrico Trotta, CNPI
Gabriel Simões
Alex Ferraz, CNPI
Thiago Macruz, CNPI
Vinicius Figueiredo, CNPI
Marco Calvi, CNPI
1. The securities analyst(s) involved in preparing this report are associated with individuals who work for the issuers addressed herein.
2. The securities analyst(s) spouse(s) or partner(s) hold, either directly or indirectly, on their on behalf or on behalf of third parties, stock and/or
other securities discussed in this report.
3. The securities analyst(s), spouse(s) or partner(s) are directly or indirectly involved in the purchase, sale or intermediation of the securities
discussed in this report.
4. The securities analyst(s), respective spouse(s) or partner(s) hold, either directly or indirectly, any financial interest related to the securities
issuers analyzed in this report.