1

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Deborah Weinswig

Managing Director,

Fung Global Retail & Technology

deborahweinswig@fung1937.com

US: 917.655.6790

HK: 852.6119.1779

CN: 86.186.1420.3016

KeyTakeaways:

1) TheFungGlobalRetail&TechnologyteamtraveledtoBarcelonatoattendtheMobileWorldCongress2017andgaininsightsintothelatestcutting-edgetechnologiesthatareexpectedtotransformtheretailindustry.

2) Inthiswrapupnote,wehighlightthetechnologiesthatstoodout:artificialintelligence(AI),virtualreality(VR),augmentedreality(AR)andconversationalcommerce.

3) WebelieveAIwillbethecenterofthenextdisruptivetechnology,whilechatbotsinmessagingarelikelytobethefrontendofthewave.VRandAR,onthehand,havesofarfailedtogenerateincentivesfornewbusinessdevelopment,despitecreatingalotofbuzzatthisyear’sshow.

2

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

TableofContents

ExecutiveSummary.........................................................................................................................................3

AIApplicationsatMWC...................................................................................................................................4

VirtualRealityandAugmentedReality............................................................................................................6

CaseStudy:HardwarechallengesofVRadoption...........................................................................................10

ConversationalCommerce.............................................................................................................................12

Otherhighlightsfromtheshow......................................................................................................................14

NoticeableStart-ups.......................................................................................................................................18

KeyTakeaways...............................................................................................................................................22

3

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

ExecutiveSummaryTheFungGlobalRetail&TechnologyteamtraveledtoBarcelonatoattendtheMobileWorldCongress2017andgaininsightsintothelatestcutting-edgetechnologiesthatareexpectedtotransformtheretailindustry.

Thisyear’sMWCpresentedanamplenumberoftechnologiesandnewideasthatattimesbewilderedtheaudience.Inthisreport,wetakeacloserlookintothreetechnologies―AI,VR/ARandconversationalcommerce―whichwebelievearethegamechangersoftheretailspace.

• AI―isheavilyinvested;chatbotsmaybethefirsttobloom:Whetherthecompanyisane-commerceorabrick-and-mortarretailer,itisinvestingheavilyintoAI.Ononehand,AIcanserveasapersonalassistanttoconsumers,helpingthemperformdailytasks,suchasshopping(i.e.,Alexa,Clove,GoogleAssistant).Ontheotherhand,AIwillsoonlikelyreplacestoreassistantsandprovideshopperswithamoreseamlessexperience.ThesamebenefitsofAIchatbotsalsoapplytoonlineretailerswhenconsumersnavigatethroughtheirwebsite.

• VRandAR―bothholdgreatpromise,butstillneedtimetoexcite:MostcompaniesappearedtobeshowcasingVRorARcontentatMWC,yetthequalityofthecontentvariedgreatlydependingonthehardware.WebelievethisyearmostconsumerswillactuallyexperienceVR/ARforthefirsttime―atlowercostsandwithbetteraccessibility.

• Conversationalcommerce―canturncustomerserviceintoloyalty:Retailersareengagingtheircustomersnotonlythroughtheirwebsites,butalsoontheirsocialmediaaccounts.Inthefuture,productsearcheswilllikelyexpandfromparametric-basedonestoincludedialogue-basedones,whichmeansproductofferingcanbeincreasinglypersonalized.

ThetriptoBarcelonaalsopresentedourteamwithnumerousopportunitiestomeetwithstartupsandseeproductdemosfirsthand.Inthisreport,wehaveselectedanumberofstartupsthatwebelievearegoingtohaveanimpactonretail―eitherintermsofproductofferings,customerengagementorpayments.

4

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

AIApplicationsatMWCAIwaseverywhereatthisyear’sMWC.MasayoshiSon,FounderandCEOofSoftbank,deliveredakeynote,whichtouchedonthephilosophicalquestionoftheroleofAIoverthenext30years.SonbelievesthatwewillseeSingularityinthenext30years―i.e.,thepointatwhichAIbecomesmoreintelligentthanhumans.InSon’swords,“AIwillhaveanIQof10,000,”andeveniftheimplicationsofthisarestillunknown,weknowforsurethataworldwithAIwillbeevermoreconnected.

NECtheWISE

Source:FungGlobalRetail&Technology

KatsumiEmura,ExecutiveVPandChiefTechnologyOfficer(CTO)ofNEC,hostedasharingsessiononNEC’sproprietaryAI—NECtheWISE.NECtheWISEincludesfacial-,speech-andemotion-recognitiontechnologies,aswellascrowd-behavioranalysisandheterogeneousmixturelearning,amongothers.NECtheWISEishelpingNECclientsdealwithrealworldproblemssuchascrimeprevention,powerdemandforecastingandtheinspectionofdeteriorationinbridges.WhenaskedaboutthebiggestchallengestoAIdevelopment,EmurapointedoutthathardwarehasnotyetfullyleveragedthepowerofAI,addingthattheeffortandtimetoeducatepeopleaboutAIismassive.HealsostressedtheimportanceofqualitydatawhenitcomestoAI,asthisiswhatwilllikelydeterminethequalityoftheAIitselfratherthanfactorssuchascomputationalpower.

Source:FungGlobalRetail&Technology

DifferentapplicationsofAIshowcasedatMWC.

5

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

ConversocialConversocialisaSaaScompanythatprovidessocialcustomerservicesolutions.Thesoftwarehelpscorporatesidentifycustomersthatrequireserviceviascanningsocialmediaplatformsandoffersaseamlesssolutionforserviceagentstoengagewiththem.WemetwithCEOandCo-Founder,JoshuaMarch,whosharedwithusthatthevisionofConversocialistoofferseamlesscustomerserviceonsocialmediausingchatbottechnology.HesaidAIwilllikelyrevamptheentirecustomerserviceindustryinthenext3–5years.Notonlycanchatbotsprovidecost-savingsolutionstoenterprises,buttheyalsoenhanceengagementwithconsumers.MarchsaidthatsolutionproviderssuchasSalesforceandOracledonotfocusoncustomerserviceviamessaging,whichhebelievedisthetrendgoingforward,andhencetheopportunityforConversocial.ThecompanyprovidesaglimpseintothepossibilityofusingAItoturncustomerserviceviasocialmediaintoloyalty.

Olay:ABeautyCompanyonanAIMissionWiththelaunchoftheOlaySkinAdvisor,OlayislookingtoleveragethepowerofAItotransformthewaywomenshopforbeautyproducts.shoppingforbeautyproductshasbecomeincreasinglymorecomplex,withmorebrandsandproductstochoosefrom.Thismeansthatone-thirdofwomenleavethestorewithoutfindingwhattheyarelookingfor,and60%ofbeautyshoppershaveintheircabinetathomethesocalled“skincaregraveyard”ofproductstheyboughtbutdon’tuse,accordingtotheprincipalscientistsatOlayDr.FraukeNeuser.ThepromiseAIhasisthatitcansolvesomeoftheserealpain-pointsforconsumers.

Source:FungGlobalRetail&Technology

TheOlaySkinAdvisorisaweb-basedappthatanalyzestheuser’sskintypeandmakespersonalizedrecommendationsonabeautyregimenandproducts.Howitworksistheuseruploadsaselfieandanswersasetofquestionsdesignedbybeautyscientiststohelpthealgorithmdeterminethe‘visibleskinage.’Theappthenrecommendsproductsbasedonitsfindings.Theapp’stechnologywastrainedonmorethan50,000facesandwillcontinuetolearneverytimeanewselfieisprocessed.

Source:FungGlobalRetail&Technology

6

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

NTTDoCoMoShowcasedAIforForecastingTaxiDemandinRealTimeBycombiningthehistoricaldataoftaxidemandwithlocationandexternaldata,suchaspopulationstaticsandweatherforecasts,NTTDoCoMo’sAIproductforecaststaxidemandinTokyo.TheprojectstartedinJune2016,andhasbeeninfieldtrialssinceDecember2016.TheAIcanpredicttaxidemandovera30-minuteperiodina500squaremeterareawithanaccuracythataveraged92.9%.NTTDoCoMoclaimsthereisa49%increaseinsalesperformancebetweenthosetaxisequippedwiththeforecastingtechnologyandthosewhichdonotmakeuseofit.

Samsung’sNexshopSolutionWesawdemosofSamsung’simpressivein-storeretailsolutionsuiteNexshop.Thecompanyhasdevelopedthreeapplications―NexshopSales,NexshopMarketingandNexshopTraining―whicharefocusedonimprovingin-storeperformancebyprovidingstoreassociatesamobilePOSsolution,amarketingtoolandatrainingappwithitsveryownAIlearningassistant.TheNexshopsolutionprovidesdetailedanalyticsonfootfalltogetherwithheat-mappingvisualizations,which,insomecases,canbebrokendowntotheproductlevel.

Source:FungGlobalRetail&Technology

VirtualRealityandAugmentedRealityInapanelbymoderatedbyDavidMacQueenfromStrategyAnalytics,HugoSwart(Qualcomm),EricTrabold(Avegant)andTonyChao(AppliedVentures)discussedthehardwarechallengesforVRandARadoptionaswellastheirpredictionsforthedevelopmentofthetwotechnologiesgoingforward.

Thepanelistsagreedthatwearelikelytoseestandaloneheadmounteddisplay(HMD)VRdeviceslaterthisyearasthenextstepintheevolutionofmobileVRhardware.However,thetechnologyisstillboundbylimitationsofGPUspeed,displaycapabilitiesandbatterlifepreventingitfrombeingmadeavailablethroughastandalonemobiledevicethatallowsfreedomofmovementanduseoveraprolongedperiodoftime.

EricTraboldfromAvegantdiscussedthescreenlesstechnologybehindAvegant’sfirstproductGlyph,whichisaportablepersonaltheaterdevicethatwaslaunchedatCES,theglobalconsumerelectronicsandconsumertechnologytradeshowinLasVegas.Thetechnologyoffersonewaythe

VRandARarestillthisyear’sbuzzwords.

Source:FungGlobalRetail&Technology

7

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

displayissuecouldbesolvedforVRcontentrendering,asitusesmuchlesspowerthantraditionaldisplays,whileprovidingahigherqualityviewingexperience.

Source:FungGlobalRetail&Technology

HugoSwartdiscussedhisviewthatthefutureofARandVRisforthetechnologiestoconvergefromauserexperiencepointofview―entirescenesofdigitalcontentwillbeaccessedthroughamobiledevicewithaqualitythatwillbenearlyindistinguishablefromreality,whilefullVRimmersionislikelytobecomejustone“mode”ofthetechnologythatwillbeusedoccasionally.Inthissense,VRandARholdgreatpromisetoaugmentrealityasweknowit,however,allexpertsseemedtoagreethatthisfutureisstillalongwayout

Google’sAR:ARetailUseCase

Source:FungGlobalRetail&Technology

8

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

WeexperiencedGoogle’sTangotechnologyinretail:thecustomermakesaproductselectionandthedigitalitemissuperimposedonthephysicalenvironmentinaccurateproportionsandcorrectorientationviaAR.ThetechnologyworkedsmoothlyandtheexperiencebenefitedfromthedisplayqualitiesofGoogle’snewsmartphone.Inthisusecase,ARtechnologyonmobileallowscustomerstobrowse,viewandpurchaseamuchwiderrangeofproductsthanthebusinessphysicallyhasinstock.

WirecardTheGermany-basedpaymentprocessingandITcompany,Wirecard,showcasedaVRshoppingexperienceandnext-generationmobilePOShardwareproductthatcombinesatablet,cardscannerandreceiptprinter.

Source:FungGlobalRetail&Technology

PredictionsonfuturedevelopmentofVRandARadoptionInapanelmoderatedbyDavidMacQueenfromStrategyAnalytics,HugoSwart(Qualcomm),EricTrabold(Avegant)andTonyChao(AppliedVentures)discussedthehardwarechallengesforVRandARadoptionaswellastheirpredictionsonthedevelopmentofthetwotechnologiesgoingforward.

Thepanelistsagreedthatwearelikelytoseestandaloneheadmounteddisplay(HMD)VRdeviceslaterthisyearasthenextstepintheevolutionofmobileVRhardware.However,thetechnologyisstillboundbythelimitationsofGPUspeed,displaycapabilitiesandbatterlifebeforeitcanbemadeavailablethroughastandalonemobiledevicethatallowsfreedomofmovementanduseoveraprolongedperiodoftime.

9

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

TraboldfromAvegantdiscussedthescreenlesstechnologybehindAvegant’sfirstproductGlyph,whichisaportablepersonaltheaterdevicethatwaslaunchedattheConsumerElectronicsShow(CES).ThetechnologyoffersonewaythedisplayissuecouldbesolvedforVRcontentrendering,asitusesmuchlesspowerthantraditionaldisplays,whileprovidingahigher-qualityviewingexperience.

Source:FungGlobalRetail&Technology

SwartfromQualcommdiscussedhisbeliefthatthefutureofARandVRisforthetechnologiestoconvergefromauserexperienceviewpoint—entirescenesofdigitalcontentwillbeaccessedthroughamobiledevicewithaqualitythatwillbenearlyindistinguishablefromreality,whilefullVRimmersionislikelytobecomejustone“mode”ofthetechnologythatisusedoccasionally.Inthissense,VRandARholdgreatpromisetoaugmentrealityasweknowit,however,alltheexpertsseemedtoagreethatthisfutureisstillalongwayout.

10

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

CASESTU

DY

HardwarechallengesofVRadoptionInordertoachieveahighlyimmersiveVRexperience,theVRheadsetneedstoachievethefollowing:highresolution,highpixeldensityandhighframerate.ThereisanissuewithcurrentlyavailableVRheadsetscalledthescreen-dooreffect,whichmeansthepixelsareactuallyvisibletousersbecausethelensmagnifiesthemacrossawiderfieldofview.

Source:Shutterstock

HigherPPIresultsinhighersystemmemoryconsumptionTosolvethescreendooreffect,onesimplesolutionistoincreasepixels-per-inch(PPI).Mostoftoday’sflagshipswithaVR-enabledfeaturehavePPIupto600pixels.Sharprecentlyannounceda1,000PPIIGZOdisplay.However,higherhardwarerequirementsareneededtopowerhighPPIdisplays.

Figure1.RelationshipBetweenPhonePixelDensityandSystemMemory

Source:Micron

HigherPPIcangreatlyincreasethequalityoftheVRexperience,butitislimitedbycurrenttechnologylevels.

11

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

CASESTU

DY

Theoretically,A1,000PPIdisplaywitha90HzrefreshratewillbesufficienttodeliveraseamlessVRexperience.AccordingtoMicronestimates,inordertoruna1,000PPIdisplay,atotalof12GBDRAMisneeded(comparedto2GBDRAMintheiPhone7and4GBDRAMintheGalaxyNote7).Obviously,alongwithhighersystemmemory,thesystemwillalsoneedbetterprocessingpower,batterycapacity,andthelistgoeson.

Source:Shutterstock

VRremainsthecenterhubofinnovativeapplicationsofmanysectorsinthefuture,yet,thereisstillalotofimprovementneededtodeliveratrueVRexperience.

12

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

ConversationalCommerceConversationalcommercereferstoamessagingapplicationthatenablesshopping,customerserviceorinquiries.Tobettercopewithchangingcustomerbehaviorandcreatebetterdigitalengagement,Chatbot,afront-endtoolinconversationalcommerce,integratesthefunctionofadvancedmessagingwithplugins.

ThroughAIandnaturallanguageprocessing,achatbotcanmimichumaninteractionstogiveconsumersaccesstoserviceprovidersandbrandsattheirconvenience.

Source:business2community

TheFutureofChatbotsisVoiceJohnPulverdeliveredasessiononchatbotsandthefutureofcommunication.PulveristheInternetpioneerwhoismostfamousfor“thePulverOrder,”whichisarulingbytheFederalCommunicationsCommission(FCC)regardingInternetProtocol(IP).Theorderruledthatcomputer-to-computerVoIPisnotatelecommunicationsserviceandsoisnotsubjecttotraditionalvoicetelecommunicationsregulation.Hecommentedthat63%ofpeopleengagewithcompaniesthroughtextormessagingandoutofthoseinteractions,50%arehandledbybots.ForPulver,thefuturebelongstothefurtherautomationoftheseinteractions.However,theevolutionheisexpectingisthatratherthanusingtext,peoplewillmoveontousevoicetoconversewithmachines.Infact,hecommentedthatGenZwillseethemovebacktovoicecommunicationfromthecurrenttextualnorm,andthatAItechnology,suchasAmazon’svirtualassistantAlexa,willplayabigroleinthat.

TheFutureofMessaging:Engagement,E-CommerceandBotsWeattendedapanelorganizedbyOvum,whichdiscussedthefutureofmessaging.ThepanelwasmoderatedbyPamelaClark-DicksonfromOvumandfeaturedMattAsay,VPofMobileatAdobe,MitaliDhar,DirectorofGlobalProductPartnershipatGoogle,BeerudSheth,Co-FounderandCEOofGupshup,HarperReed,SeniorDirectorofSoftwareDevelopmentatPaypal,andRyanSullivan,VPofProductEngineering&DevelopmentatSprint.

13

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Thepanelistsbeganbydiscussingthescaleofglobalinstantmessaging(IM)—thecombineduserbaseofWhatsapp,WeChatandMessengerisunder5billionandthetrafficisover68trillionmessagesperyear.DiscussionthencontinuedaroundwhyChinaandKoreaareseeingmoresuccessinmonetizingIM.BeerudShethcommentedthatAsianIMappsareacombinationofsocialmediaportalandcommunicationtool.MitaliDharaddedthereisaneedtointegrateintooneapp,whichincludeschatbotsinthefuture.Messagingappsnowincludecorporate/brandaccounts,ads,browsers,chatbotsandpaymentfunctions.Companiesandbrandsarelookingatmessagingplatformsastheirprimaryengagementplatformfortheirnow24/7customerrelationships.Onthedevelopmentofchatbotswithinmessagingapps,Dharmentionedthatinteractingwithbotsisstilldifferentfromchattingwithfriends,andsheexpectsthiswillbewillbethenextphasechatbotsneedtoadvancetoinordertoestablishamorenaturalwayofcommunication.

Source:FungGlobalRetail&Technology

Customerserviceandcommerceviamessagingappscreatesauniqueopportunitytosimplifyhowbusinessesandconsumersinteract.Consumershaveadoptedthisnewplatform,butmostcompaniesstillneedtotakethesteptomessagingandconversationalcommerce.MattAsayexpressedconcernaboutthenegativeimpactofinformationsilosonmessaging—itwillbehardtoachievemonetizationorevenimplementchatbotsinthecurrentmessagingecosystemduethefragmentationofdatabecauseofsilos.

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March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Otherhighlightsfromtheshow

TheDisruptiveImpactofBlockchainsBrockPierce,ManagingPartnerandChairmanofBlockchainCapital,discussedhisviewontheopportunitiesthatblockchaintechnologiespresentforentrepreneursandcorporates.Inhisview,blockchaintechnologyisprobablythemostimportanttechnologyaftertheInternet,asitwilldemocratizeaccesstofinancialservicestoalargedemographicinthecurrentlyunderserveddevelopingandemergingmarkets.Furthermore,blockchainsand,morespecifically,thetokensusedtotransactonblockchaininfrastructure,arelikelytorevolutionizethewaybusinessesgetstartedandhowtheyraisecapital.In2016,therewere64ICOs(InitialTokenOfferings),whichraisedover$103million,and,insomecases,fundingroundswereraisedinminutes—forexample,Golemraised$8.5millionbysellingtokensin19minutesandSingularDTVraised$7.7millionin17minutes.

Source:FungGlobalRetail&Technology

E-Commerce=Content,Community,MarketplaceUriLevanon,FounderandCEOofHasteMedia,deliveredapracticalguidetotheevolutionofthee-commercebusinessmodelthatincorporatescontent,communityandcommerce.HelookedatexamplessuchasHouzz,PolyvoreandTicTailwhichallleveragethepowerofcontentandcommunitiestodrivetrafficandengagement,whichleadtomonetization.Oneexampleforasuccessfulengagementstrategyisthenow-globalplatformforinteriordesign,Houzz,whichgenerates25millionmonthlyuniqueviews.AccordingtoLevanon,successfule-commercebusinessesfallalongthe“trifecta,”whichisdefinedasthecontent,communityandmarketplacesegmentsofthebusinessmodel.

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March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Source:FungGlobalRetail&Technology

Hefurtherpointedoutthatthereareplentyofopportunitiestocreatebusinessesfollowingthismodel,andhighlightedexamplessuchasGoopandBrit+Co,whichwerecreatedbyGwynethPaltrowandBritMorin,respectively.Bothbusinessesofferuserslifestyleguidelinesthroughanauthenticvoice,lotsofcontent,curatedbrandsand,eventually,privateones.

EthereumEnterpriseApplicationsandHowOrganizationsShouldThinkaboutDataThesessionweattendedat4YFNofferedakeynotefromJPRangaswami,ChiefDataOfficeratDeutscheBank,andadiscussiononEthereum,thegeneralpurposeblockchain,withtheFoundationCouncilPresidentoftheEthereumFoundation,VitalikButerin.

Source:FungGlobalRetail&Technology

Rangaswamicommentedonthe“digitaltransformation”resultingfromtheexponentialgrowthofdataandsomeofthechallengesassociatedwithit.AccordingtoRangaswami,therehasbeenafundamentalshiftfromsellers’markets,wheremarkettransactionsaredefinedbyasingleprovidertomanyagents,todistributed,ornetwork,models,wheretheagencyisinthe

16

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

handsofconsumers.Oneexampleistheblockchain,whichoffersanalternativetocentralizedbook-keepingandverificationofvirtualtransactionsandassets.Thispowershiftfromcentralizedorganizationstoconsumersnecessitatesthatorganizationsbreakthroughsilostructuresinordertoadapttothenewmarketparadigm.

Oneofthemostimportantaspectsofthefutureroleoforganizationsishowtheycollect,filterandusedata.Withtheincreasingspeedandvolumeofdata,theneedtoverifyitsaccuracyandguaranteeitsprovenancebecomesparamount.Themainissuestemsfromthefactthat,atpresent,thetimeittakessystemstoveritythetruthfulnessofdatais,insomecases,longerthanthetimeittakesforthetruestateofthedatatochange.Inaddition,thesheervolumeofdatacreatesafilteringproblem,ifthedataisnotlabeledandorganizedfromthesource.Asaresult,theorganizationofdatahasbecomeapriorityforbusinessesacrossindustries,togetherwiththeabilitytoexplainwhyapieceofdataistrue;inotherwords,tounderwritetheimmutabilityofdatathroughoutitsjourney,fromitssourcetoitsenduse.

Source:FungGlobalRetail&Technology

TherewasadiscussionbetweenButerinandMontserratGuardiaGüell,DigitalChallengeDirectorofBancoSabadell.WiththeannouncementoftheformationoftheEthereumAlliance,whichincludescompaniessuchasIntel,MircosoftandJ.P.MorganChase,thebigquestiononpeople’smindswashowfarawaywearefromseeingscalableenterprise-levelapplicationsrunonEthereum.ButerinwasquicktopointoutthatEthereumisstillfacingchallengeswhenitcomestoovercomingthecurrenttechnologicallimitationsaroundthenumberoftransactionsandusersonitsblockchain,butthatovercomingtheseisontheroadmapforthedevelopmentofEthereumoverthenextthreetofiveyears.Healsopointedoutthattherearemultiplepilotsandprojectsalreadydevelopedontheblockchain,suchasapplicationsgovernanceandvotingmechanisms,supply-chainsolutionsthattargetprovenanceandapplicationsinhealthcare.

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

AnotherAmazonEchoCompetitorTheCEOofLine,TakeshiIdezawa,announcedtodaythattheJapanesemessagingcompanywillbepartneringwithSouthKorea’sNavertolaunchthedigitalassistantClova.Inturn,theassistantwillpowertwosmartdevices,theWaveandtheFace,whichwillbelaunchedlaterthisyear.ThestrategyofthenewpartnershipistoleverageNaver’sdominantpositionasaleaderinsearchinSouthKoreanandLine’sdataandchatcapabilitiestodeliverdevicesakintotheAmazonEchoandGoogleHometargetingtheAsianconsumer.

Source:FungGlobalRetail&Technology

PanasonicPanasonicisshowcasingitsconnectedairportconceptatMWC17,and,atthesametime,isalsoexhibitingasuiteofhardwareandsoftwareforretailers:

• Atransparentscreenwhichusesprojectiontocreatewindowdisplaystopullinandengageshoppers.

• Amonitoringandmanagingsystemthattrackstheusageandperformanceofin-storedigitalequipmentsuchasdisplaysandsignagetooptimizemaintenanceandminimizecost.

• AconnecteddisplaycoupledwithfacialrecognitionandRFIDproductidentification.

• ParcelPickingDirector,whichusesbarcodetechnologytomanagekeyparcelinformationforasmoothlogisticsoperation.Itprojectskeyparcelinformationontotheparcelsthemselves,makingitviewablefromadistancebyworkers.

Source:FungGlobalRetail&Technology

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March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

GenesysThecompanydevelopedanomnichannelplatformthathelpsretailersinteractwiththedigitalconsumer.Genesysshowcaseditschatbotandcustomerservicesolutionsaswellasitsplatform’sabilitytomakeuseof360-degreeviewoftheconsumerwithdatacollectedfromdigitalandphysicalcustomertouch-pointsandIoTsensorsinretailenvironments.Marks&Spencer,IKEA,H&M,NikeandFalabellaareamongtheretailersthatusetheGenesystechnology.

Source:FungGlobalRetail&Technology

NTSRetailNTSRetailisanAustriancompanythathasdevelopedanall-in-onetechnologyretailsolutionusedprimarilybymobileoperatorsacrossEurope.TheplatformintegratesPOS,inventorymanagement,aftersalesserviceandretailanalyticstoallowtransactionsinboththephysicalanddigitalenvironments.

Source:Ntsretail.com

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March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

NoticeableStart-ups

Company: AiQSmartClothing

Sector: Apparel

NotableClients: N/A

Website: http://www.aiqsmartclothing.com

AiQSmartClothingisaTaiwanesetechnologyandapparelcompanywitharangeofproducts,includingatextileRFID,textileheating,washableLEDsandhealthtrackingsolutions.

Company: Bitrefill

Sector: Paymentservices

NotableClients: Vodafone,AT&T,Verizon,Orange,T-Mobile

Website: https://en.bitrefill.com

Aservicethatallowsprepaidcardrefills.Thetechnologysupportsover140countriesforinternationalmobilerechargingbyleveragingtheBitcoininfrastructure.

Company: BrandYourShoes

Sector: Footwear

NotableClients: SAP,Allianz,Bioderma

Website: http://brandyourshoes.com

ThestartuphasbuiltaB2Bdigitalplatformforcompaniestobrandandcustomizefootwear.AllproductsareproducedlocallyinSpainandtheminimumorderquantityis30pieces.BrandYourShowshasalreadyproducedfootwearforcompaniessuchasSAP,AllianzandBioderma.

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March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Company: Combyne

Sector: NFCTechnology

NotableClients: Gucci,Topshop,Mango

Website: http://www.combyne.com/about-us/

Combyneisafashionappthatletsusersstoreanddiscoverstyles.Oncetheycreateanoutfituserscanshareitwiththeirfollowerstogainfeedback.Thestylesavailableontheappcomefromover800brandsandonlinestores,andtheproducthasgottenpositivereviewsontheiOSappstoresinceitslaunchin2016.

Company: CopSonic

Sector: CommunicationTechnology

NotableClients: N/A

Website: http://www.copsonic.com

CopSonicisaFrenchcompanythathasdevelopedanultrasonicalternativetoNFC.Thetechnologyallowsthetransmissionofdatathroughsoundwaves,whichmeansitonlyusesthespeakersandmicrophonesofsmartdevices.Retailusecasesofthetechnologyincludeidentityverification,paymentsandgeofencing.

Company: Lechal

Sector: FootwearComponent

NotableClients: Hi-Tec

Website: http://www.lechal.com

Lechalproducesawearablecomponentthatcanbeintegratedinthesoleoftheshoeorthelaces,whichallowsGPSnavigation(viavibration)andfitnesstracking.Theproductwasoriginallydesignedforpeoplewhoarevisuallyimpaired,buthasnowbeenmadeavailabletoallconsumers.ThecompanyhasalreadypartneredwithshoebrandHi-TecforitsHi-TecNavigatorShoes.

21

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Company: OpenBack

Sector: Apputility

NotableClients: N/A

Website: https://www.openback.com

Atechnologythatmanageshowmobileappnotificationsarepushedtotheuser,redefiningtheappcustomerexperience.

Company: Reply.ai

Sector: Chatbot

NotableClients: Starbucks,Vaio,Hilton

Website: https://www.reply.ai

Aplatformtobuildandmanageyourconversationalstrategy.Thecompanybuildschatbotsthatallowcompaniestohave1:1interactionwiththeconsumer.

Company: Sentio

Sector: Hardware

NotableClients: N/A

Website: http://www.sentio.com

DevelopedtheSuperbook,aUniversalLaptopShellforAndroid,whichtransformstheandroidsmartphoneintoafullPC.

22

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Company: SplitFy

Sector: P2Ppayment

NotableClients: JustEat,RNE,Wallapop

Website: https://www.splitfy.com

AservicethatallowsusersinSpaintomakepeer-to-peermoneytransfers,suchassplittingbills.

Company: Whisbi

Sector: CommunicationService

NotableClients: T-Mobile,Vodafone,Audi,SEAT

Website: http://www.whisbi.com

Thiscompanyshowcasedaone-to-oneandone-to-manyvideochattoolthatintegratesdirectlywitharetailer’swebsite.Thetoolallowscompaniestobroadcastpromotioneventsorprovidelivevideocustomerservicedirectlyontheirwebsite.Thisboostsengagementandthetimeusersspendonthesite,whilea lsoremovingfrictionfromtheuserexperience,sincesitevisitorsdonotneedaseparateapporlog-intoenterthevideochat.ThecompanyisalreadyworkingwithmobileoperatorssuchasT-MobileandVodafoneandautomakerssuchasAudiandSEAT,amongothercompanies.Thesebrandshaveatleastdoubledtheirsalesconversionrateandexperienceda600%increaseincustomerengagement.

KeyTakeawaysThisyear’sthemeismoreabouthowapplicationscantakeadvantageofthewell-establishedmobileecosystem.WebelieveAIisgoingtorevolutionizetheretaillandscapeandbringtoconsumersahighlyconnectedandefficientshoppingexperienceinthecomingyears.TheveryfrontendofAIapplicationsislikelytobethechatbot,andwealreadysawanumberofcompaniesincorporatingchatbotsintheirproducts.VRandARarestillinthespotlight,yetagainwefeelitisnomorethanagimmickatthispoint.

Source:FungGlobalRetail&Technology

23

March23,2017

DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comKirilPopovSeniorAnalyst

SimicChanSeniorResearchAssociate

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