Investors 200dpi

Powerful e-commerce

cost-cutting tool

1

Resume

Ricotio today:

Cross-border transaction platform providing drop shipping service to e-tailers and remote

brick-and-mortar stores;

Operational subsidiaries in Estonia, Germany and Russia;

Professional team in programming, commerce, business development and strategy;

30'000 SKUs in catalogue, 8 suppliers, 3 e-tailers;

Mid-term goals:

International holding with 15 local subsidiaries (EU, Turkey, Gulf states, Russia and CIS)

E-tailers integrated: 7'800+

SKUs in catalogue: 1'000'000

EBIT: $7'000'000

In a long-term Ricotio is going to become a full-scope distance retail infrastructure

provider:

Wholesale aggregator

Warehousing and fulfillment service provider

Cross-border and local logistics operator

Shopping cart and СRM SaaS renderer

Payment system

2

Wholesale

aggregator

Cross-border

and local

logistics

operator

Warehousing

and

fulfillment

service

provider

Shopping

cart and

СRM SaaS

renderer

Payment

system

Our role model is the Standard Oil Company as founded by John D. Rockefeller. It initially owned and controlled

the logistics of the oil traffic routes to the refineries and later developed itself into the vertically integrated company

controlling the entire value chain.

Ricotio is going to become the best in goods traffic routes and cloud retail infrastructure.

Ricotio’s development logic:

Stage 1: We start as a wholesale aggregator.

Stage 2: Using defined at a Stage 1 most profitable traffic routes we build a logistics operator.

Stage 3: Having built the logistics operator we develop our own warehousing and fulfillment network.

Stage 4: Along with logistics business development, we start building a web-based retail platform, including

CRM and shopping cart solutions among other features.

Stage 5: When we control retailer's assortment and order processing tools, it is relatively easy to motivate him/her

to use our own payment processing system, which will be duly developed and implemented in a right time.

Ricotio: full scope e-commerce infrastructure

3

Corporate structure

Ricotio OÜ

RicoRus LLC

RicoDe UG

Mr. Belinskiy

chairman

Mr. Meshalkin

CEOMr. Boas

CEO

Mr. Boas

Mr.

Belinskiy

Mr.

Meshalkin

10%

90%

100%

90%

10%

Rico--

Mr. X

Mr. Y

Existing legal entities

Future legal entities

Shareholders and their

shares10%

Executives

4

E-commerce market: key indicators

Russian e-commerce market growth rate is

20%-40% per year.

Nowadays e-commerce sales is about 2%-

3% of total Russian retail turnover.

“Datainsight”* agency forecasts that market

will grow by 50% to 2015, and Russian

annual e-tail turnover will reach $20 bn.

3,8 5,4 7,1 10,312,7

Russian e-commerce market growth, $ bn

RUSSIA EU

Rate of increase of EU e-commerce market

is 17%-19% per year**.

Online retail has a 5% share in the

European retail market**.

**http://www.retailgazette.co.uk/articles/44043-european-ecommerce-market-valued-at-198-billion

http://www.retailresearch.org/onlineretailing.php

2008 2009 2010 2011 2012*

128150

175

2010 2011 2012*

European e-commerce market growth, $ bn

Russia is a relatively small, but rapidly growing market.

Europe has the largest e-commerce market in the world with a 17% annual growth rate.

International drop-shipping service Ricotio has a potential to be the major provider for goods and

modern e-commerce technologies from EU to the growing Russian market.

* http://www.datainsight.ru5

E-commerce in Russia

213

153

123

83

80

utkonos.ru*

ozon.ru

komus.ru

quelle.ru

svyaznoy

Russian e-commerce in figures:

Total amount of e-stores is about 25 000.

Top-50 e-tailers have only 16% of annual e-

tail turnover

Total turnover of TOP-5 Russian e-tailers in 2011, m. USD

* Ricotio has the agreement with Utkonos on joint project for non-

food assortment.

Russian e-customers in facts:

Russia has a largest Internet population in

Europe (70 m.)

Total population is 141 m. people

Internet penetration is about 50%

High level of population before 30 yrs old,

having active consumer behavior (29.2%)

38.3% 14.7% 29.2% 17.7%

100%

0 – 29 yrs.

30 – 40 yrs.

41 – 59 yrs.

60 and more

Russian population structure

6

Our clients and our offers

buye

r

su

pp

lier

manufa

ctu

rer

wholesaler

ability to promote a product

internationally

cheap tool for new product

market test

aggregated fast growing e-

commerce sales channel

safe and quick access to

new markets

growing orders

delivery demand

small or medium e-tailer

starti

ng

e-ente

rpre

neur

auctioneer

up-to-date items prices and q-ty in stock

ability for buy-it-now mode trading

transparent logistics tariffs

full assortment for a new e-store

full logistics service for a new e-store

ready-to-use solutions for sopping carts

freedom to choose assortment and

regional niche

free additional assortment of local or

imported goods

up-to-date items prices and q-ty in

stock

automatic data exchange with Ricotio

custom logistics solutions

logistics companye-s

tore

and shopping

cart develo

per

“Push to…” solutions

“Ready for Ricotio”

solutions

general cargos fulfillment

light bulk shipment

bric

k-a

nd-m

orta

r

sto

res

7

Benchmarking

Ricotio will develop and implement feature till this year

2014

2013

2017

20XX

2015

They have it, but Ricotio believe it’s not good for customer

Feature Ricotio WorldWideBrands Alibaba DOBA

Registration and additional fee no

Additional drop ship fee no no no

Location of suppliers worldwide USA, Canada worldwide USA

Location of buyers worldwide worldwide (50-60%) worldwide USA

Wholesale pricing

Single item and bulk purchasing

Tech support

Buyer sells goods right from dropshipping catalog

Returns according to suppliers' policies

Affilate (referral) program

Integration features (XML, CSV etc.)

Custom integration solutions

API solutions for shopping carts

Own sertification system for suppliers

Buyer is contacting supplier directly and independently

Buyer makes deals on his own with every wholesaler

Instant market research option

Mobile application

Possibility of buyer restriction by supplier

Inspector service

"Request for supplier" service

Own payment service

Multi-currency catalogue

Buyer selects shipping method and tariffs

Affilate e-store application

8

Key features

Simple working environment: catalogue search and filters, 2-click items upload and download,

transparent orders management system, various communication tools (tickets, notifications,

messages).

Automatic data exchange between ricotio.com and client's website or ERP in most popular data

formats (XML and CSV)

Design and implementation of a custom data exchange format and procedure according to any

specific client's need.

Custom legal document formats (invoices, bills, agreements, etc.) according to client's local laws.

Safe transactions: clients pay to Ricotio local branches only. Money-back guarantee in case of

shipment denial.

Fair deals: prior to integration into the system Ricotio carefully selects wholesalers and checks their

ability to drop ship.

Single source procurement solutions for remote brick-and-mortar stores: general cargos fulfillment,

light bulk shipment.

Various ways to pay: wire transfer, PayPal, Visa/Master card.

9

Drop-shipping Ricotio: how it works

Adopting the drop shipping business model makes traditional remote sales scheme easier and cheaper:

E-shop doesn’t need warehouse;

E-shop doesn’t deliver goods to consumer: it means no deals with logistics companies and reduced

demand for own delivery staff;

All the activities of e-store are online (offline operations are reduced dramatically);

Wholesalers and manufacturers deal with big integrator of e-stores, not a single e-store;

Manufacturers and wholesalers open new markets fast and for free;

All the participants have easy-to-use and safe cross-border transaction environment.

Internet

e-store

suppliers and manufacturers

shipping

customers

order order order

10


Supplier Buyer

There are a few simple steps any Client has to perform within his personal account to be able to start earning money with us.

Online activity: fIll In a company's profile (to help Ricotio issue invoices and any other documents correctly).Offline activity: coordinate and sign contracts according to local regulations.Then Ricotio's support arranges scheduled automated data exchange with Client's site or ERP system

Usually only 5 sections in personal account (they are marked above) matter to manage almost all customer's needs. Some auxiliary functions are offered to facilitate Client's work and interaction with Ricotio.com: statistics, communication tools, saved searches, subscriptions, etc. 11

downloads selected items from Ricotio catalogue to Buyer’s site

uploads to Ricotio documents that Buyer wants his Client to receive along with a parcel

places orders in Ricotio

Inserts warehouse address data

Adds items into Ricotio catalogue

Coordinates with Ricotio changes in catalogue’s structure (creates categories and sub-categories for supplier’s goods)

Coordinates with Ricotio commercial terms and conditions, as well as logistics companies able to work with supplier, terms of shipment


Buyer

Supplier

12

Locale:

language+country+Ricotio’s

legal entity

Commodity

group

1 2 3

A

B

C

Partner

Team leader

Managing

partner

Managing

partner

Partner

Team leader

Partner

Team leader

Front office

Locale 2 customer

acquisition

director

Managing director

of

commodity group

C

Finance

Dept.

Managing director

of

commodity group

B

Locale 3 customer

acquisition

director

IT

Dept.

Legal

Dept.Tech

support

Site

Development

Back office

Managing

partner

Development office

E-commerce

services

integration

New

features

Operational structure

Example: distribution of responsibility among both product categories and geographies

13

Responsibilities within a Ricotio value chain

Development office

Development officeFront office

Back office

Search for a clientClient’s integration

into Ricotio

Contract is

signed

Client is

working

with Ricotio

Order processing Analysis of client service

pro

mo

Le

ga

l

exp

ert

ise

Te

ch

nic

al

rea

liza

tio

n

Co

mm

erc

ial

co

nd

itio

ns

Co

nsu

ltin

g

Customer base

development

Search for 3rd

-party E-

commerce services

integration opportunities

Development and

technological

implementation

Cooperation

terms and

conditions

are approved

Application is

ready to start

Prospective

E-commerce services

demand research

Implementation

effect analysisSite and features

development

Testing with

clients

Le

ga

l e

xp

ert

ise

Te

ch

nic

al so

lutio

n

Te

ch

nic

al so

lutio

n

Ma

rke

t

de

ma

nd

fo

r

tech

no

log

ie

s

Po

ten

tia

l

effe

cts

Co

mm

erc

ial

co

nd

itio

ns

Clie

nt’s

sa

tisfa

ctio

n

Ma

rke

t

effe

cts

Ne

ed

su

rve

y

Co

ntr

ol,

log

istics

Su

pe

rvis

ion

,

tra

nsa

ctio

ns

Sta

tistics,

acco

un

tin

g,

eco

no

mic

s

Co

nsu

ltin

g

Eco

no

mic

effe

cts

CR

M

Co

nsu

ltin

gA

cce

pta

nce

Co

nsu

ltin

g,

tra

inin

gC

on

su

ltin

g,

tech

su

pp

ort

Pro

ject’s e

co

no

mic

,

inve

stm

en

ts

Imp

rove

me

nts

14

Target incentive mechanism

Logistics

Market

innovations

External E-

commerce

services

ricotio.com

Supplier

E-tailer

20%

50%

30%

Back

office

Front

office

Development

office

100%:

Ricotio’s commission fee

Order processing

100%:

Front office funds

Clients and commodity

marketing

Referral bonus (connections

to Ricotio)

E-tailer of

Locale 2

Suplier of

Locale 1 ricotio.com

order order

Case: Supplier and E-tailer belong to different teams of Front office

50%50% Sharing bonus between the teams

Processing of the

order is carried out

by team of supplier’s

locale

Taxes,

transactions,

joint-stock profit

50%

50%

Supplier hunter’s bonus

Buyer hunter’s bonus

10%

40%50%

Local Partner’s

share

15

Financesunits Х yr Х+1 yr Х+2 yr

Basic revenue assumptions

Number of visitors (unic IP's per 24h) visits 300 300 300

E-tailer's conversion rate % 1,5% 1,5% 1,5%

E-tailer's average check (avg order's price), USD $ 100 110 121

Ricotio goods share in e-tailer's turnover % 20% 20% 20%

E-tailer's mark-up for Ricotio goods price/cost 1,25 1,25 1,25

Ricotio average fee % 10% 10% 10%

Ricotio fee per average e-tailer, USD/month $ 216 238 261

Ricotio Revenue

Cold contacts per month done by 1 manager nr 100 100 100

'Cold call' to 'integration' conversion rate % 5% 7% 9%

Number of E-tailers integrated per month by 1 manager nr 5 7 9

Overall number of sales managers in regions nr 7 22 52

Russia 3 6 10

Germany 1 3 6

Ukraine 1 3 6

Poland 1 3 6

Turkey 1 3 6

Gulf States 1 3

France 1 3

Italy 1 3

Swiss 1 3

UK 1

Netherlands 1

Spain 1

Portugal 1

Czech Republic 1

Austria 1

Number of countries in the network 5 9 15

E-tailer integrations into Ricotio within a year 420 1 848 5 616

Overall E-tailers integrated nr 420 2 268 7 884

Ricotio sales (total gross fee) $ 1 088 640 6 466 522 24 726 747

Costs

Back-office $ (162 000) (273 600) (412 200)

Local offices $ (254 000) (446 000) (741 000)

Earnings before sales and marketing expences 1 504 640 7 186 122 25 879 947

Front office and marketing $ (1 182 032) (5 081 226) (16 704 698)

Total costs $ (1 598 032) (5 800 826) (17 857 898)

EBIT $ (509 392) 665 696 6 868 849

16

Contacts

Alexey Belinskiy

Christian Boas

Alexey

Meshalkin

Ricotio OU, Estonia

+372 602 7307

RicoDe UG, Germany

+49 (0) 1522 434 0996

RicoRus Ltd., Russia

+7 921 723 6418

[email protected]

[email protected]

[email protected]

Skype: Ricotio

English

Russian

Español

English

Deutsch

English

Russian

17

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