Start-up Stage - E-Commerce - Presentation by Alexander Stelmaszyk, CEO of BettenRiese at the NOAH 2015 Conference in London, Old Billingsgate on the 12th of November 2015.

1. BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
Building the leading destination for mattresses and
everything for a good night's sleep
Alexander Stelmaszyk
(Co-Founder & MD)
Noah Conference London, 12th Nov 2015

3. 2BUILDING BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
Buying a mattress is a painful experience
Mattresses are very important purchases for consumers …
... buying a mattress is a painful experience
> We spend 30% of our lifetime sleeping
> Important purchase decision with impact
on health and emotional well-being
> High-value product
> Almost no product know-how and hardly any brand
awareness
> Unattractive mass market mattress stores
> Inconvenient transportation and trouble of old
mattress disposal

4. 3BUILDING BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
Total
3.2
Online Online
~0.2
3.9
Total
~0.75
Attractive target market in Germany with an increasing online share up
to EUR 750m in 2020 for mattress & frames only
TARGET MARKET BETTENRIESE MATTRESS & FRAMES MARKET AND ONLINE SHARE
Germany 2013, EUR bn Germany, EUR bn
Source: Destatis, BTE, HEIMTEX Branchenverband,
Axel Springer media impact, own analysis
Source: BEVH, Möbelmarkt publication, Google, own analysis
3.2
Bedding
(pillows, blankets)
Matresses & frames
1.5
1.0Boxspring beds
1.5
7.2Total
Hometex
(sheets, covers)
6%
19%
2013 2020

5. 4BUILDING BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
BettenRiese bridges the gap between consumers expectations and reality
Product experts on
phone
Blog
Mattress lexicon
Mattress guidebook
Easy-to-use online mattress
advisor to guide consumers

6. 5BUILDING BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
BettenRiese is already established as online sleeping expert shop
Excellent positioned as expert in the field of sleeping since launch in
January 2014
Successfully launched first easy-to-use mattress advisory tool in
German e-commerce market
Established advisory approach with >200 content pages (e.g.
ratgeber, lexicon and blog)
Built up strong assortment including good relationships with
leading suppliers including lean logistic set up
Key top-line KPIs proven
first order profitability
high average mattress sales price and basket size
cross-selling of frames/bedding products

7. 6BUILDING BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
BettenRiese will launch a Private Label in Q1 2016 and will leverage
business model
We will introduce an innovation in the mattress market
We further increase first-order profitability through higher gross margins
We transfer our customer and product know-how into a best-in-class product
We are independent from other manufacturers (e.g. pricing, logistics)

8. 7BUILDING BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
Transferring best practice e-commerce approach to mattress business
Private label as a trademark combined with branded assortment – Strategy
already successfully proven in other verticals
Established BettenRiese shop as exclusive retailer for private label brand
combined with external private label page
Differentiatior from marketing-only driven “one mattress fits all” concepts
like Casper mattress (US)

9. 8BUILDING BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
Our private label assortment will apply the expert approach and is
complemented by strong brand assortment
Business concept approved already profitable sales of branded
assortment via expert approach
Branded assortment allow us to convert brand traffic into private label orders
Already developed shop features and marketing channels are enabler for private label sales
> Mattress advisory tool shows already strong conversion of co-branded private label
> Product sales via phone
> Cross-selling like topseller comparison offers

10. 9BUILDING BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
Business model is supported by lean logistics setup and smart business
intelligence
WORKING CAPITAL-FRIENDLY LOGISTICS SETUP
> Majority of fulfillment via dropshipping with no inventory
> Low inventory kept for topsellers to reduce delivery times
> Private label 100% dropshipping including return policy
BUILDING UP STRONG BUSINESS INTELLIGENCE
> Huge database of mattress model attributes
> Automated daily reportings
> We get to know our customer: Customer clustering e.g. through mattress
advisory tool

11. 10BUILDING BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
Next step towards internationalization and TV marketing represent
further growth opportunities
TV MARKETING
INTERNATIONALIZATION
> Similar market scenarios in terms of intransparencies, consumer needs and
offline retail oligopolies in Europe
> Entering European markets by adapting the BettenRiese advisory approach
combined with strong and profitable private label assortment
> Underpenetrated TV market allows to rapidly create brand awareness and
gain market share
> Large baskets, high margins and a general product relevance for consumers
make the business model especially suited for TV

12. 11BUILDING BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
E-commerce made easy
Private label as clear differentiator in the market
High margin vertical – low number of orders needed for profitability
Low complexity-category compared to other verticals (e.g., logistics, number of products)
Clear track to break even
Key KPIs are proven

13. 12BUILDING BUILDING THE LEADING DESTINATION FOR MATTRESSES AND EVERYTHING FOR A GOOD NIGHT'S SLEEP
THANK YOU!
Alexander Stelmaszyk
Co-Founder & Managing Director
as@bettenriese.de

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