1 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGYDEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

JUNE27,2015

D E B O R A H W E I N S W I G

M a n a g i n g D i r e c t o r , F u n g G l o b a l R e t a i l & T e c h n o l o g y d e b o r a h w e i n s w i g @ f u n g 1 9 3 7 . c o m

U S : 6 4 6 . 8 3 9 . 7 0 1 7 H K : 8 5 2 . 6 1 1 9 . 1 7 7 9

C H N : 8 6 . 1 8 6 . 1 4 2 0 . 3 0 1 6

• With six weeks to go before the Summer OlympicGames begin, this week, we take a look at theadvances in wearable technology and advancedtextiles and fabrics that will be used before andduringtheGames.

• Brands like Speedo and Arena work alongsideathletes to create the most advanced swimwearpossible; these suit often mean the differencebetweensilverandgold.

• Visawilldebut itsprototypewearablepayment ringthat will be worn by Visa sponsored athletes. Theringsarecompatiblewiththe4,000newcontactless-enabledmachines the company is installing for theGames.

• Wearable trackingdeviceswillhelpathletesget livedataabouttheirperformancewhiletheyaretrainingfor the competitions through new devices like theSolossmartcyclingglassesthataredesignedtohelpcyclistskeeptheireyesontheroad.

COUNTDOWN TO RIO 2016: SIX

WEEKS LEFT TO GO

2 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGYDEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

JUNE27,2015

Countdown to Rio 2016: Six Weeks Left to Go Fung Global Retail & Technology is countingdown the weeks until the 2016 SummerOlympic Games in Rio de Janeiro, Brazil beginon August 5. The Olympic Games have evolvedinto one of the best-managed global brand-marketingoutlets intheworldduetotheirglobalreach, and they are one of the largest andmostprofitable of all media events. We will trackdevelopmentsandnewsrelatedtobusiness,theeconomy, politics, retail and technology in therun-uptotheGames.

WithsixweekstogobeforetheSummerOlympicsbegin,thisweek,wetakea look at the advances inwearable technology and advanced textiles andfabricsthatwillbeusedduringtheOlympicGames.

CONTEXT

Brazil isthefirstSouthAmericancountryevertohosttheOlympics,andithasfacedbothchallengesandtriumphsasit has undertaken rapid and expansive development inordertosucceedinitsroleashost.

The Summer Olympic Games, taking place August 5–21 inRio, constitute one of the most highly anticipated globalsporting events and are expected to generate record-breaking viewership numbers. According to Nielsen, theBeijingOlympicsattracted4.7billionviewersover17daysin2008. In 2012,NBC’s London SummerOlympics broadcastswere the most-watched television event in US TV history.Thus,alleyesareonBrazilasitpreparestohostmorethan10,000athletesandhundredsofthousandsoftourists.

Source:Reuters,SergioMoraes

3 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGYDEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

JUNE27,2015

MACROECONOMICCONDITIONSINBRAZIL

AccordingtotheInstitutoBrasileirodeGeografíaeEstatística,Braziliscurrentlyfacing:

• Unemploymentof11.2%

• Inflationof9.3%(April2016versusApril2015)

• AnexchangerateofR$1=US$0.29

• A7.0%declineinretailsalesvolumein2016

Figure1.BrazilianGDP:YoY%Change

Source:Bloomberg

Figure2.PriceoftheBrazilianRealinUSD:June2011–May2016

Source:Bloomberg

RIOOLYMPICSBUDGETFIGURES

AccordingtotheInternationalOlympicCommittee(IOC):

• The2007proposedbalancedOlympicbudgetfromtheOrganisingCommitteesfortheOlympicGames(OCOG)wasUS$2.82billion.

• The2007proposednon-OCOGcapitalinvestmentbudgetwasUS$11.1billion.

• ThecurrentoperatingOlympicbudgetisR$7.4billion(US$1.85billion).

• TotalprivateandpublicOlympic-associatedexpenditureshavetotaledUS$10billion.

4.62.5

4.1 3.2

-0.8-3.0

-5.4-8-6-4-20246

Jun11

Sep11

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Jun12

Sep12

Dec12

Mar13

Jun13

Sep13

Dec13

Mar14

Jun14

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0.64

0.30

00.10.20.30.40.50.60.7

Jun11

Oct11

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Jun12

Oct12

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Jun13

Oct13

Feb14

Jun14

Oct14

Feb15

Jun15

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4 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGYDEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

JUNE27,2015

COUNTDOWN:6WEEKSSWIMSUITSMADETOTAKETHEGOLD

Within the $1 billion competitive and fitness swimwear market,competitiontotakeOlympicGoldisfierceasswimwearcompaniesbattleto create the most high-tech swimwear within the strict guidelines ofswimming’sgoverningbody.

Sevenyearsago,theFédérationInternationaledeNatation(InternationalFederation of Swimming—FINA) placed strict regulations on the type ofswimwearthatcouldbeutilizedduringcompetitiveswimmingasawaytostop “technical doping.” At the time, some of the swimsuits introducedwere compared to “second skin” or even “spacesuits,” particularly thepolyurethane-based swimsuit introduced by Speedo. FINA now requiresthatswimsuitsbemadeoftextiles,andplasticsarecompletelybanned.

Source:apparelnews.net

SwimmingisnotoriousfordifferentiatingbetweenOlympicgoldandsilverbyonlya fractionofasecond.Therefore,creating thetypeofswimwearthatcanmakethedifference,whileabidingwiththestrictFINAguidelines,hasbeenachallengeforcompanieslikeSpeedo,TYRandArena.

Speedo has the highest share of the men’s swimwear market at 2.0%,followedbyNikeat1.7%andArenaat1.7%accordingtoEuromonitor.

InMay,Speedounveiledtheswimsuitsitssponsoredswimmerswillwearwhile competing. According to Jamie Cornforth, the company’s VP, “TheSpeedo federationsuits looksoeye-catching,dynamicandpowerful thatour athletes will no doubt hit the blocks with confidence, empoweringthemtolook,feelandperformtheirbest.”

5 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGYDEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

JUNE27,2015

Source:Speedo

Arena,inresponsetotheFINAguidelines,releaseditsPowerskinCarbon-Ultra suit,whichuses carbon fibers inplaceofplastics.Arenaclaims theamount of research and technological advances the company has beenable to incorporate into its swimsuits allows the company to helpmoreathletesreachforgold.

Figure3.Arenavs.SpeedoMedals

Source:Arena

MichaelPhelps,18-timegoldmedalwinner,announcedthisyearhewouldpart ways with Speedo, the brand he donned during all of his Olympicwins,infavorofabrandlaunchedbyPhelpshimself,calledMP.

VISASAYSOLYMPICGAMESAREAN“INCREDIBLEOPPORTUNITY”FORNEWPAYMENTWEARBLES

Visadebutedanewwearable ring inpreparation for theGames:anear-field-communication-basedpaymentring thatsyncsdirectly to theuser’screditcardaccount.Althoughitisstillaprototype,theringwillbeusedbya fewselectVisa-sponsoredathletes.TheringusesthesameplatformasApplePay,SamsungPayorAndroidPay,althoughitdoesnotneedtobechargedanditiswaterresistant,thusitdoesnotneedtobetakenoff.

14 19 23 18 25 19

4656

67

51

73

56

0102030405060708090100

Arena Speedo Arena Speedo Arena Speedo

Shanghai2011 Barcelona2013 Kazan2015

TotalMedals

GoldMedals

6 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGYDEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

JUNE27,2015

Source:DigitalTrends

VisaalsocreatedanewoperatingsysteminfrastructurefortheOlympicsthatwillbe implemented inall venues includingstadiums,presscenters,point-of-sale (POS), the Olympic Village and Olympic Superstores, withapproximately 4,000POS terminals expected to be ready for the games,and an additional 11 ATMs in partnershipwith Bradesco. All of the POSterminalswill be contactless-enabled.Visa spokespersonAndyGerit saidVisa is actively “using its sport sponsorships to introduce, highlight andtestemergingpaymenttechnology.”

WEARABLETECHNOLOGYGIVESATHLETICCOMPETITIVEEDGE

TheDirectorofTechnologyandInnovationfortheUSOlympicCommittee,Mounir Zok, predicted wearable sensors will someday be equally asimportant as the types of shoes or other athletic gear Olympic athletesuse. This year, they’ll play an important role in sports like diving andgymnastics, in which the wearables track performance metrics, and incycling, in which glasses that track cadence, speed and heart rate candisplay the information directly into the cyclists field of view. TheParalympicGameswillalsofeatureanewwheelchairdevelopedbyBMWthattracksmilestraveledandfrequencyofarmstrokes.

7 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGYDEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

JUNE27,2015

Source:Kopin

TheUStrackcyclists’glassesareknownasSolossmartcyclingglasses,byKopin Corporation, and they display personalized data in their line ofvision. These glasses are usually utilized along with heart rate monitorsthat are strapped around the athletes’ chests or wrists. Although theglasses have been used in training andwill be used up until the games,theyarenotcurrentlyallowedtobeusedduringOlympiccompetition inRio.

CONCLUSION

Aswearable technology continues to advance and rules surrounding thedevices continue to change, athletes will become increasingly accurateandefficientwhileexertingthemselves.Thiswillrevolutionizethesportingworld.Until then, fans and touristswill be able to see someof thenewtechnologyinactioninpaymentsandcompetitivesportswear.

8 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGYDEBORAHWEINSWIG@FUNG1937.COMUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

JUNE27,2015

DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comRachaelDimitResearchAssociateHONGKONG:10thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223002470LONDON:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NEWYORK:1359Broadway,9thFloorNewYork,NY10018Tel:6468397017FBICGROUP.COM