Leveraging new McKinsey research, Ludwig will provide a look into the delivery future. o How fast? Is next-day enough or will we see same-day or even instant delivery as the new normal? o Through classical parcel delivery services or through UBER-like couriers? And what technology features and services that delight us will become reality? o At which location? Doorstep, locker, shop, office, car trunk? o By man or machine? Drones, druids, autonomous vehicles with built-in locker? o From local stores, domestic fulfillment centers, or as direct parcel from China? Will cross­ border e-commerce really pick-up and be sustainable? What does this mean for the way the goods get shipped? Learn more about MetaPack's The Delivery Conference 2018 (#TDC18) at the event website https://www.thedeliveryconference.com.

1. Leaders &
Heroes
THE DELIVERY
CONFERENCE
DR LUDWIG HAUSMANN
Partner
Dismantling myths in
eCommerce logistics
Leaders & Heroes

2. London, January 30, 2018
Dismantling myths in
e-commerce logistics –
In 2025, how will we receive the goods we shop for online?
THE DELIVERY CONFERENCE
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission is strictly prohibited

3. 2
USD
130bn
USD
110bn
Domestic B2C deliveries
USD
23bn
Cross-border
B2C deliveries
E-commerce ware-
housing and fulfillment

4. 3
E-commerce relevant parcel penetration
24
17
1112
7
9
77
1
43
23
18
16
1111
98
6
55
22
39
<1<1<1 >1<10.1 <1 0.1
Low-penetrated markets
~1-2 parcels/capita
~20 parcels/capita
Medium-sized,
mature markets
Large-sized,
mature markets
Parcels per capita p.a. (2013 vs. 2016)
~8 parcels/capita
China
(tier 1)
Nor-
way
Nether-
lands
Switzer-
land
Ger-
many
UKAustria USSwe-
den
BelgiumIndia Singa-
pore
ItalyIndo-
nesia
Thai-
land
Malay-
sia
2016
2013

5. 4
Domestic B2C deliveries
Percent
USD 55 bn
32
5
52
11
2011
Rest of World
Western Europe
2021
USD 213 bn
34
17
40
9
Asia-Pacific
North America

6. 5
How fast?
Traditional employed couriers or Uber-like
freelancers?
What technology features?
At which location?
Delivered by people or machines?
From local stores, domestic warehouses, or
direct from China?questions

7. 6
B2C customer demand for instant and same-day delivery
20252016
Market share, percent
Same day
Instant
<1
3
22
+43% p.a

8. 7
+4 % points
willing to pay EUR 3 extra for
same-day delivery
Urban
+3 % points
willing to pay EUR 3 or 5 extra for
same-day delivery
High income
+13 % points
base delivery choice mainly on
speed and reliability
Younger
(aged 18-34)
+5 % points
willing to pay EUR 3 or 5 extra for
same-day delivery
More time
constrained
Adopters of fast-delivery options

9. 8
USD billions, 2016E
Estimated net sales of US urban delivery start-ups
Immediacy of
use/“urgency”
Perishable in
minutes/hours
Non-
perishable
Average gross margin
USD/transaction
Perishable within
days
Postmates
~ 20%
instacart
~ 10-20%
40
20
0
≤0.3
~1.0
Prepared food
Nonfood
retail
Groceries
+0.5

10. 9
USD/order
Consumer prices for instant delivery
Consumer willing-
ness to pay
6
Estimated
delivery costs
7
10
3.99
13.00
6.70
2.95 Virtually
none

11. 10
Example: payment flow Instacart
USD 30.00USD 36.00
USD 2.00
USD 1.50
USD 8.50

12. 11
Example: payment flow Instacart
USD 30.00USD 36.00
USD 2.00
USD 1.50
USD 8.50
3.00+ Delivery fee
+ Discretionary tipping ~10% 3.00
Customer pays
36.00
30.00Groceries
9.50
3.00Delivery fee
2.00+ Merchant commission
8.50./. Crowdsourced courier
1.00Urban delivery startup earns
Urban delivery start-up collects
+ Discretionary tipping 3.00
1.50+ 3rd party promotion

13. 12
Example: urban delivery start-ups
8
90
4
75
12
50
Employment
Share of utilized capacity
Percent of total paid working time
Crowdsourcing
Total pay per delivery
USD

14. 13
Catalogued
inventory for
previously offline
merchants
Live adjustment,
e.g., to delivery
address or
ordered items
End-to-end live
GPS tracking and
dynamic ETA
updates Driver ratings
Push notifications
and in-app driver
communication
In-app
customer
service
Narrow time
windows to
choose from and
precise ETA at
checkout
In-app payment
and tipping
1 common user-
friendly interface
across retailers
Substitution
recommender for
out-of-stock items
10 magical moments

15. 14
Preferred delivery locations
Percent
Similar delivery conditions
6
4
8
82
Differing delivery conditions
9
43
5
43

16. 15
Overview of delivery technologies
Unmanned aerial
vehicle (UAV) for
single parcels
Small electric AV
travelling ~4 mph
on curbside
AV with parcel
locker on top
Advanced robot fulfilling
current delivery driver job
incl. parcel handover

17. 16
2025: delivery forms by geography and type
Low-density cities
>10,000-100,000
Rural
<10,000
High-density cities
>200,000
Medium-density cities
>100,000-200,000
Same day
Time definite
Deferred
Instant

18. 17
2030 and beyond: a long-term view
Low-density cities
>10,000-100,000
Rural
<10,000
High-density cities
>200,000
Medium-density cities
>100,000-200,000
Same day
Time definite
Deferred
Instant

19. 18
Reasons for cross-border shopping
Number of customers (out of 10)
Product availability
"The only way of getting
this rugby gear to Australia
is to ship it in from the UK"
Lower prices
"Buying this camera gear
straight from Japan saved
me EUR 250"
Greater selection
"The only way to get the
full lineup of my favorite
cosmetics brand is to buy
it directly from the US"
Product quality
"By buying this handbag
straight from Italy, I could
be sure I get the best
product quality"

20. 19
Share of e-tailers expecting growth of cross-border revenue share
Percent
62
78
66
67
73
78
Ø 71
Fashion e-tailers
Non-fashion e-tailers
E-commerce giants
Brick and mortars
High-value manufacturers
Low-value manufacturers

21. 20
Where will the goods come
from – stores, warehouses,
perhaps even factories in
China?
Will same-day or even instant
deliveries ever seem normal?
Will couriers be contractors
or employees?
Where will consumers
pick up parcels?
Are they going to be delivered
autonomously and, if so, by
drones, by droids, or by self-
driving trucks?
Will cross-border deliveries
become even more
significant?
Traditional incumbents
and home deliveries
Same day
Innovations go
mainstream
Couriers will be employees
Still at home
Discounts
Drones
Cross-border delivery
Local fulfillment
Parcel shops

22. 21
Huge opportunity,
but extremely hard to chart
the strategic course until 2025

23. 22
The sky is the limit in
e-commerce logistics

24. 23