Study - Id128160 - Digital Economy Compass 2022

DIGITAL
ECONOMY
COMPASS
2022
Conflict, inflation, food supply and energy
crises, as well as the long tail of the pandemic
caused shockwaves across the world in 2022
As 2021 was about to end, there was a broad sense of optimism for the year ahead, a Chapter 1 - “From frenzy to fall: is eCommerce back to normal?” (released in August 2022),
"back to normal" after the pandemic. In fact, the second half of 2022 saw a gradual lifting shows what happened to many digital industries in 2022 after the unparalleled COVID-19
of most limitations put in place to stop the spread of COVID-19. However, there is little boom in the years before. In 2022 eCommerce finds itself at a turning point. Dramatic
question that the Russian invasion of Ukraine was the event that had the greatest impact developments on a global scale, such as the Russia-Ukraine war, inflation, and supply
on the year. In addition, the unexpected war had a significant effect on the world chain shocks, are pointing at a global recession and have led to a performance slowdown
economy, leading to substantial rises in the cost of food and energy as well as an overall of many major players.
global surge in inflation rates, which led to aggressive monetary tightening and
Chapter 2 - “The ascent of the crypto economy” (released in May 2022), debates the
uncertainties triggering a global cost-of-living crisis. Because of these new uncertainties,
turbulent development of cryptocurrencies with its many advances and setbacks. The
some topics related to the digital economy need to be re-evaluated.
industry has moved on from concepts and whitepapers to real-life applications, adding
In this context, we decided to publish the sixth edition of the Digital Economy Compass. It over 10,000 different cryptocurrencies, several novel ideas and features such as smart
aggregates and makes sense of data from both our own models as well as the most contracts, which unlocked a plethora of possibilities and given rise to an entire crypto
relevant third-party sources out there. Data shown is structured around five topics we ecosystem. Despite significant advancements, cryptocurrencies remain highly
want to highlight: eCommerce facing the global recession and resetting expectations, the controversial due to high volatility, increasing numbers of cyberattacks, and issues related
ascent of the crypto economy, gaming and the Metaverse with the hype around immersive to energy consumption and scalability.
digital worlds, growing cybersecurity challenges, and the future of smart mobility.
2
Chapter 3 – “Gaming and the Metaverse: Will the evolution of gaming give rise to a new The Digital Economy Compass is published every year by Statista and focuses on finding
digital economy?” (released in December 2022), discusses the hype surrounding the answers and, in doing so, new questions with the most relevant and recent data out there.
Metaverse, betting on a future of an immersive virtual world that does not yet exist. Many Our own research and market analyses are accessible outside the Digital Economy
are contributing to this flurry of activity by freely experimenting in this space. As the Compass in even greater depth and are bundled into a targeted product family. The
gaming industry expands, technology and gaming experiences follow suit. There are many Statista Market Outlooks provide 700,000+ data stats on 2,200+ markets, 700+ reports,
unanswered questions surrounding the Metaverse: who will control it, what it will and cover 150+ countries. The Statista Global Consumer Survey contains data from
encompass, and how much of an impact it will have on our lives. In its current state, the 1,700,000+ interviews, covering 56 countries and 50+ industries as well as 14,500+ brands.
Metaverse is only a set of potentials and not a reality. The eCommerceDB.com collects revenue data and 40+ KPIs of 20,000+ online stores in
50+ countries and generates 270+ reports. The Statista CompanyDB provides data about
Chapter 4 - “Cybersecurity: fighting the formidable foes of the internet” (released in
1.7 million companies, which is clustered into 80+ industries and condensed into 1,000+
November 2022), tells how a relentless rise in cyber threats, which were created to some
reports depicting 28+ different KPIs.
extent by the pandemic, is putting cybersecurity on everyone's agenda. Additionally,
dramatic developments on a global scale, such as the Russia-Ukraine war, also continue to For the Digital Economy Compass 2022, we are proud to have compiled more than 200
accelerate cybersecurity spending and the priorities of organizations. slides with the most insightful and exciting data. We hope you find them to be both
informative and enjoyable.
Chapter 5 - “Smart Mobility – The future is digital, greener, and more efficient” (released in
October 2022), undertakes an expedition in our way of moving people in the 21st century.
The topic of smart mobility comes with discussions about cleaner, safer, and more
efficient mobility. Heated debates about topics centering around global greenhouse gas
emissions, the consequences of air pollution, road traffic accidents, and traffic congestion
indicate that mobility in the 21st century is not smart yet.
Dr. Friedrich Schwandt (CEO)
3
Table of contents (1/2)
Chapter 1 - From frenzy to fall: is eCommerce back to normal? (August 2022)..................................................... ......................................................................................................... 6
A post-pandemic hangover is ending the celebration of eCommerce growth…………………………………………………………………………………………………………………………………………………….. 8
Rising prices, dwindling revenues: eCommerce is facing the global arrival of stagflation……………………………………………………………………………………………………………………………...……. 17
Over-stocked, over-hired, over-built? Are eCommerce companies resetting expectations?………………………………………………………………………………………………………………………….…….. 31
Frictionless social and metaverse commerce: the future of eCommerce?…………………………………………………………………………………………………………………………………………………….…….. 49
Chapter 2 - The ascent of the crypto economy (May 2022)………………………….………………………………………………………………………………………………………………………………………………. 57
Cryptocurrencies with their disruptive potential have gone mainstream……………………………………………………………………………………………………………………………………………………………. 59
How blockchain technology is reimagining the world of internet, money, and finance………………………………………………………………………………………………………………………….……………. 92
Chapter 3 - Gaming and the Metaverse: Will the evolution of gaming give rise to a new digital economy? (December 2022)................................................................................. 114
Gaming isn’t only for nerds anymore – with full speed towards a mainstream audience………………………………………………………………………………………………….………………………………… 116
AR & VR spawned a game revolution and forged a path to the Metaverse………………………………………………………………………………………………………………………………..………………………… 139
Will the Metaverse change the way humans interact in both the physical & digital worlds?………………………………………………………………………………………………………..………………………. 147
Chapter 4 - Cybersecurity: fighting the formidable foes of the internet (November 2022)……………………………………………………………………………..………………………………..…………. 176
Cyber-resilience: the need of doing the ordinary extraordinarily well……………………………………………………………………………………………………………………………………………………………..….. 178
Growing cybermarket challenges and unsolved opportunities are shaping an industry on the rise…………………………………………………………………………………………................……….….. 192
Modern warfare is moving from land, sea, and air into a new cyberspace arena……………………………………………………………………………………………………………………………………………….. 201
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Table of contents (2/2)
Chapter 5 - Smart Mobility – The future is digital, greener, and more efficient (October 2022)……………………………………………………………………………………..……………….……………. 206
Smart Mobility: Its pressing challenge of reducing emissions remains………………………………………………………………………………………………………………………………………………………………… 208
The Future of Mobility: Smart mobility in the 21st century will lift citizens off the ground or transport them beneath it…………………………………………………………………………………….. 221
The City of Tomorrow: It revolves around efficiency and modern technology…………………………………………………………………………………………………………………………………………………….. 229
Appendix……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………. 234
Product Overview……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….. 234
Authors………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………. 244
Contact……………………………………………………………………………………………………………………………………………………………………………..………………………………………………………………………………… 246
5
CHAPTER 1
From frenzy to fall:

is eCommerce back to normal?
Originally released in August 2022 (as Chapter 2)
Table of contents
From frenzy to fall: is eCommerce back to normal?
A post-pandemic hangover is ending the celebration of eCommerce growth 8

Rising prices, dwindling revenues: eCommerce is facing the global
arrival of stagflation 17
Over-stocked, over-hired, over-built? Are eCommerce companies
resetting expectations? 31
Frictionless social and metaverse commerce: the future
of eCommerce? 49
7
A post-pandemic hangover placeholder
is ending the celebration

of eCommerce growth
The eCommerce rollercoaster is in full swing, and nobody
knows where it is going. After an unparalleled boom set in
motion by the global COVID-19 crisis, eCommerce finds itself at
a turning point. Dramatic developments on a global scale such
as the Russia-Ukraine war, inflation, and supply chain shocks
are pointing at a global recession and are forcing a
performance slowdown of many major eCommerce players.
2022 will be the first time in its long history that the market will
see negative revenue growth. Of course, this always has to be
seen in perspective, and many industry experts contest the
comparison of today's growth figures with pre-COVID-19 data.
Nevertheless, the market is now compelled to tackle
substantial questions and how to go forward. Even if there is a
lot of headwind at the moment, we still believe online shares
will eventually increase and revenue growth will get back on
track.
8
Despite turbulent developments on a global scale in 2022, eCommerce still
accounts by far for the largest chunk of the digital economy
Revenue of selected markets of the digital economy in billion US$ in 2022(1) Users of selected markets of the digital economy in million
4,500
4,115
4,000 3,799
eCommerce
3,450
3,500
3,150
3,000
2,612
2,421 Video Games 2,462
2,500
2,050
2,000 1,807
1,659
Food Delivery
1,500 1,386
998 Streaming
1,000 682
Smart
565 Learning
651
Home
670
500 468 513 543
429 Dating
Event 405 176 Events 242 697
Tickets
2019 2020 2021 2022
9 Notes: (1) Preliminary forecast, June 2022 (not published in the Digital Market Outlook so far)
Sources: Statista Digital Market Outlook, June 2022

Dramatic developments pointing at a global recession are leading to an extreme
slowdown in performance on the stock market for many eCommerce players
Stock prices of selected eCommerce key players in US$ Stock price change from July 2021 to 2022 for selected eCommerce key players
400 -88%
Average % change
-87%
from 07/01/2021
350 -84%
till 07/12/2022 -81%
-55.2% -81%
-80%
300 -78%
-74%
-73%
250 -71%
-64%
-64%
-64%
200
-58%
-57%
150 -57%
-55%
-51%
-50%
100 -47%
-39%
-38%
50 -38%
-35%
-21%
-9%
07/01/2021 09/01/2021 11/01/2021 01/01/2022 03/01/2022 05/01/2022 07/12/2022
10
Sources: Yahoo Finance; Company information

For the first time in its long history, eCommerce growth will be negative in 2022
Global eCommerce revenue forecast in billion US$(1)
+10.1% Growth +1.4% Weakening

+17.6% old factors -3.3% factors
4,229
forecast
+24.1% 3,843 481 before +3.2%
July 2022 +0.5%
3,266 -2.9%
-2.5%
2,632
+5.0%
-3.9%
∑
new forecast 3,748
July 2022
-2.5% -2.5%
Online Increased Friction COVID- Inflation Consumer Supply- Recession Total

shift consumer re- 19(4) confidence(5) chain (Unemploy-
2019 2020 2021 2022e spending(2) duction(3) issues ment)
11 Notes: (1) Preliminary forecast as of June 2022 (not published in the Digital Market Outlook so far) (2) Wealthier consumer not much affected by macroeconomic developments (3) E.g., by bigger inventory, improving discovery,
individualization, payment and shopping systems, optimized logistics etc. (3) Lockdowns and other government restrictions that drive online consumption (4) Consumer budget shift and shaken consumer confidence
While discretionary segments such as Electronics have been hit hard, others
serving essential needs such as Food & Beverages are still performing well
Worldwide eCommerce revenue by category in billion US$ in 2022(1) Growth rates of eCommerce categories in %(1)
852 834 638 415 371 257 225 157
40 36
34
52 46
88 Beauty
249 Bedroom
Care
30
Accessories 24
255 53 95 21 21 13 12
DIY, Garden & 30 Household Alkoholic
20 18
Pets Floor Covering Care
51 Drinks 17 15 15
14 15 14
45 53 12 12 12
616 Kitchen 11
10 9
Consumer Health Care
21 6
Electronics
71 3 1
Lamps & 26 35
lighting Hot Drinks 0
488 217 16
Apparel Hobby & -1 -2
Stationery 22 -10 -5 -6
105 213
Living & Dining- -10
Personal
Room 31 91
71 Care
Non- 2021 2022 2023
Sports & Outdoor
5 2 Alcoholic
218 10 Beverages
Household 69 Fashion Furniture Beverages

115 95 Other
Footwear
Appliances
Toys & Baby Plastic 27 Other
6 3 Electronics Beauty, Health, Media
Fashion Electronics Toys, Furniture Food Media Personal & Household Care
Hobby & DIY Beverages
Beauty, Health, Toys, Hobby & DIY Food Total
Personal & Household Care

As the incidence rates of COVID-19 decline in 2022, the growth of retail done
online is more in line with pre-pandemic trends
Growth rates of retail online shares(1) Internet retail sales in comparison to new COVID-19 cases in the UK
35% 35% Average weekly value for Daily new confirmed
Internet retail sales in £ COVID-19 cases 4,000,000
United States Brazil 3,400
30% 30% million
3,200 3,500,000
25% 25%
3,000
3,000,000
20% 20% 2,800
2,500,000
2,600
15% 15%
2,400 2,000,000
10% 10% 2,200
1,500,000
5% 5% 2,000
1,800 1,000,000
0% 0%
1,600 500,000
2018 2020 2022 2024 2026 2018 2020 2022 2024 2026
1,400
Retail online share growth Pre-pandemic retail online share growth
01/20 07/20 01/21 07/21 01/22 04/22
Sources: Statista Digital Market Outlook, June 2022; UK retail sales index; Oxford COVID-19 Government Response Tracker
What was once spent on eCommerce during the pandemic is now being
budgeted for offline, travel, and event items
Offline sales revenue of selected brands in bn US$ Global revenue of Travel & Tourism in bn US$ Global revenue of Live Music Ticket Sales in bn US$
+46%
776
717
+5%
521
487 494 491
346
+18% +14%
+358%
13 15 17 15 16 18 24 4 5 24
2019 2020 2021 2022 2019 2020 2021 2022
2020 2021 2022e
14 An average exchange rates for respective year have been applied to the findings from the financial report based on the IRS website.
Sources: Company Information; eCommerceDB; Statista Market Outlook 2022

Although there is a current tendency to return to retail offline sales, online
shares are projected to increase on a global scale until 2025
Worldwide offline and online share of total retail revenue(1) and online share of selected categories(2)
2025 50%
Offline Consumer Electronics +21%
60%
revenue share
35%
Apparel +23%
43%
32%
Household Appliances +37%
2021 44%
30%
Beauty & Personal Care +21%
Online 36%
78% 84% Total retail market 16% 22%
revenue share
28%
+26% Furniture +29%
36%
13%
Toys & Hobby +26%
16%
5%
Food & Beverages +49%
7%
2021 2025
15 Notes: (1) Total retail revenue is defined by all categories covered by the Statista Consumer Market Outlook (2) Preliminary forecast, June 2022 (not published in the Digital Market Outlook so far)

Although 2022 will be a tough year for eCommerce, revenue growth is expected
to bounce back next year
Global eCommerce revenue in billion US$ and growth rates(1)

24%
18%
14%
13% 12%
8% 9%
5,422
4,837
-2% 4,284
3,843 3,748
3,266
2,632
2,420
2,240
2017 2018 2019 2020 2021 2022 2023 2024 2025
16 Notes: 1) Preliminary forecast, June 2022 (not published in the Digital Market Outlook so far)

Rising prices, dwindling
revenues: eCommerce is
facing the global arrival of
stagflation
Russia’s invasion of Ukraine and its effects on commodity
markets, supply chains, inflation, and financial conditions have
aggravated the slowdown in global growth. Preexisting
deglobalization pressures will likely be exacerbated, with
countries seeking a higher degree of self-reliance and
companies rebalancing supply chains. Supply chain shocks,
which are the key drivers behind congestions in global trade,
have dramatically delayed delivery times by suppliers this year.
Consumers will notice this most when purchasing durable
goods but less so in the areas of staples and services. In
general, they will see their budgets squeezed by higher food
and fuel prices, which will crowd out other spending.
Additional pressure comes in the form of reduced incomes
caused by unemployment. Considering all these
developments, eCommerce companies are facing substantial
challenges, for which, after the golden years of the pandemic,
perhaps not everyone was prepared.
17
Major economic institutions adjusted their global GDP projections in 2022
Global GDP projection revision by selected institutions Projected real GDP growth rate
6.1% 6.1%
Conference Board -0.4%
The Economist -0.5%

4.9%
NIESR -0.5%
Moody’s Analytics -0.6% 3.6% 3.6%

3.1%
IMF -0.8%
Fitch Ratings -0.7%
Oxford Economics -1.0%
UNCTAD -1.0%
Kiel Institute -1.0%

2021 2022 2023
OECD -1.1% Baseline(1) Updated forecast(2)
18 Notes: (1) “Baseline” reflects the IMF’s World Economic Outlook, October 2021; baselines of respective forecasters differ (2) IMF World Economic Outlook April 2022
Sources: IMF; Conference Board; The Economist; NIESR; Moody’s Analytics; Fitch Ratings; Oxford Economics; UNCTAD; Kiel Institute; OECD; Statista
Declining economic growth in 2022 has been affected by a wide array of
ongoing global disruptions
Magnitude of disruptions, frequency, and ability to anticipate Disruptions the economy is facing in 2022
Magnitude of estimated cost of shock in US$ COVID-19 Acute climate events

Meteorid strike Pandemic due to global warming
Extreme pandemic
Solar storm Supervolcano Pandemic
10s of Extreme terrorism Global military conflict
US$ trillions Systemic cyberattack Financial crisis
Terrorism Local military conflict Financial challenges
US$ trillions Acute climate event (e.g. hurricane) Russia-Ukraine War and trade disputes
Major geophysical Trade dispute
100s of Man-made disaster

Common cyberattack Regulation Local military conflict
US$ billions
Acute climate event (e.g. heat wave)
Idiosyncratic (e.g. dirty bomb) contributing to
10s of
US$ billions Counterfeit
Theft Supply chain
Inflation
disruption
US$ millions
None Days Weeks Months or more
Ability to anticipate (lead time) More frequent not (yet) occurred
19
Sources: McKinsey Global Institute analysis

In some countries, stringent government policies related to COVID-19 continue
to affect the global economy in diverse ways
COVID-19 stringency index for selected countries(1)

100 China 100 Brazil 100 India
79
80 80 80
61
60 60 60
37
40 40 40
20 20 20
0 0 0
2020 2021 2022 07/22 2020 2021 2022 07/22 2020 2021 2022 07/22
100 100 100
Japan United States Germany
80 80 80
60 60 60
40 39
40 40 40
18
20 20 20
0 0 0
2020 2021 2022 07/22 2020 2021 2022 07/22 2020 2021 2022 07/22
20 Notes: (1) The stringency index is a composite measure based on nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest)
Sources: Oxford COVID-19 Government Response Tracker

The Russia-Ukraine war is expected to cause severe pressure on both supply
chains and consumer budgets, and effects are likely to last long-term
Starting point Expected immediate impact Possible long-term consequences
• Consumer markets are still recovering from the • The war will have long-term, severe consequences: • Due to disrupted crop cycles and increased risk
pandemic-induced recession, with spending on global growth could decrease by 1 to 2 percentage perception, a COVID-like V-shape recovery of food
services still being subdued as compared to pre- points as compared to prewar forecasts. supply is not in the cards, and there is likely to be
crisis levels and spending on physical consumer long-term scarring.
• Although Russia and Ukraine make up only around
goods having heightened.
2% of global trade, they are key suppliers for some • Globally, preexisting deglobalization pressures will
• Fiscal measures have stabilized and boosted mineral and agricultural commodities, so the war will likely be exacerbated, with countries seeking a
household incomes, leading to many households trigger additional supply chain pressures. higher degree of self-reliance and companies
having excess savings. Additionally, lockdowns and rebalancing supply chains.
• Energy-intensive industries as well as industries
social distancing have resulted in reduced out-of-
reliant on affected commodities are most exposed. • As in classic recessions, the most affected areas will
home spending on services.
be durable consumer goods and vehicles, versus
• Consumers will see their budgets squeezed by
• Excess savings and limited supply (supply chain consumer staples and services.
higher food and fuel prices, which will crowd out
issues) have led to inflationary pressures, which
other spending. Discretionary consumer goods • Due to inflationary pressures, fiscal stabilizing
were originally expected to ease once economies
spending will be most affected. measures are expected to be more limited than
reopened.
those in response to the COVID-19 recession.
• Additionally, consumers might be affected by a
possible recession in the form of reduced incomes
caused by unemployment.
21

After the pandemic pressure seemed to ease, the Russia-Ukraine war has again
thrown global supply chains into disarray
Cargo and tanker vessels jammed on the North Sea on June 9, 2022(1) Global Supply Chain Pressure Index (GSCPI)(2)
5.0
4.4 4.5
4.5
3.9 4.0
4.0 3.7 3.8
3.4 3.5
3.5 3.3 3.3
3.1 3.2
3.0 3.0
3.0 2.8 2.9
2.7
2.6
2.5 2.2
6
2.0
2.0
4 1.5
1.5
2
1.0
0
2020.0 2020.1 0.5
0.0
Cargo Tanker Anchored Moving 01/2020 01/2021 04/2022
22 Notes: (1) 9-10am CET (2) Measured in standard deviations from average; values of +1 or higher indicate significant stress. The GSCPI, from Federal Reserve Bank of New York, uses data from shipping, purchasing managers' index
surveys and manufacturing to chart disruption across the globe
Sources: FleetMon, New York Federal Reserve
Supply chain shocks have dramatically delayed delivery times
Manufacturing PMI suppliers’ delivery times(1) Factors exacerbating supply chain disruptions
55 Supply-side factors
Delivery times decrease
50 • COVID-19 lockdowns, shutdowns of factories and ports
Delivery times increase
45 • Shortages of intermediate inputs such as chemicals and chips
40 • Labor shortages, particularly in the US and Europe
35 • Extreme weather events
30 • Industrial accidents
25 • Aging or insufficient logistic infrastructure (e.g., congested ports and canals)

Europe
• Ripple effects of Russia-Ukraine war (e.g., energy supply insecurity)
20
U.S.
15
Demand-side factors
10
• Weaker demand for services such as tourism and recreational activities
5
• Stronger demand for manufactured goods
0
07/2018 01/19 07/19 01/20 07/20 01/21 07/21 01/2022
23 Notes: (1) PMI = Purchasing Manager’s Index; an index of over 50 indicates that delivery times are getting shorter, while and index of less than 50 indicates a decrease in delivery times
Sources: International Monetary Fund (IMF), IHS Markit

Demand and supply chain shocks are the key drivers behind congestions in
global trade
PMI supplier delivery times deviation from mean, percent contribution of economic factors (demand) and supply shocks(1)
2 1 2
1 0 0 0
0 0 0 0 0
-1 0 -1 -1 -1 -1
-1
-2 -1 0 0 -3 -3 -4 -2
-1 -2 -4 -5
-5 -2 -2 -5
-1 -5 -6 -6
-5 -6 -6 -7
-4 -7
-4 -8 -3 -2 -4
-2
-5 -5 -2 -2
-6 -5 -2 -6
-6 -6 -2
-6
-7 -7 -3 -3 -3
-8 -7 -3 -2 -8
-8 -3
-9 -9 -9 -9
-10 -9 -10
-10
-12 -12
01/20 02/20 03/20 04/20 05/20 06/20 07/20 08/20 09/20 10/20 11/20 12/20 01/21 02/21 03/21 04/21 05/21 06/21 07/21 08/21 09/21 10/21 11/21
PMI STD(2) Economic Factors Supply Chain Factors
24 Notes: (1) Region: Global ex. Europe; percentage point contributions determined using Bayesian VAR model (2) PMI (Purchasing Manager’s Index) STD denotes the deviation of the long-term mean of the Purchasing Managers’ Index
Supplier Delivery Times
Sources: European Central Bank; IHS Markit
Industries reliant on energy and other key commodities are most affected by the
Russia-Ukraine war, with collateral damage inflicted on domestic consumption
Expected impact by industry (ISIC(1))
Agriculture(2) Banking, Finance & Insurance Accommodation, Restaurants & Nightlife
Mining & Quarrying(3) Manufacturing Real Estate
Energy Supply Transportation & Storage Professional, Scientific & Technical Activities
Wholesale, Retail Trade & Car Dealers Construction Administrative & Support Services
Water Supply, Sewerage & Waste Management Information & Communication Other
Strong negative impact Medium negative impact Slightly negative impact No or positive impact
25 Notes: (1) ISIC = International Standard Industrial Classification of All Economic Activities (2) Negative impact on supply from Ukraine and increased cost of fertilizers, feed, and fuel; crop producers outside the conflict zone might
benefit from higher prices for their produce (3) Negative impact on companies operating in Russia or Ukraine; companies active in other regions might benefit from higher commodity prices
Sources: Statista Digital Market Outlook, May 2022
Due to the war, the global economy is also facing substantial inflationary
consequences
Global inflation revision by selected institutions in percentage points YoY inflation rate in 2022(1)
15.6%
IMF 3.6% 13.3% 13.3%
11.1% 10.8%
10.3%
9.2% 8.8%
8.1%
Kiel Institute 3.3% 7.2%
6.2% 5.9%
NIESR 2.9% LT LV EE PL SK HU NL GB ES DE FI US
OECD 2.5%
+12.4 +8.4 +7.3 +4.9 +6.7 +4.3 +6.1 +4.4 +4.9 +4.4 +4.3 +1.5
Oxford
2.3%
Economics YoY inflation rate Jun‘ 2022 % change since December 2021
26 Notes: (1) Projections as of June 2022
Sources: OECD, IMF, Kiel Institute, NIESR, Oxford Economics

A significant price increase of commodity products became apparent in mid-
2022 and is expected to remain high in the medium term
YoY consumer price index(1) change 12-month change consumer price index by category in the U.S. in May 2022
72%
76%
60%
49%
49%
20% 32%
16% 14% 13% 12% 11% 10% 8% 10%
7% 5% 5% 5% 7% 16%
3% 4% 5%
12% 10% 9% 8%
TR AR RU BG CZ RO PL HU BR US
Fuels Gasoline Eggs Electricity Dairy Beef Fruit Sweets
YoY 2021 YoY 2022
27 Notes: (1) Based on yearly average
Sources: OECD; U.S. Bureau of Labor Statistics

Our projections translate to additional spending of up to US$1.4 trillion on food
and fuel in 2022, which would crowd out other spending
Global projected consumer spending on food and fuel items by impact scenario in trillion US$
15
14
13
! Depending on the
12 scenario, global
consumers might spend
US$0.5, US$0.9, or US$1.4
11
trillion more on food and
fuel items than expected.
10 This corresponds roughly to
1%, 2%, or 3% of all global
consumer spending over
9
the forecast period.
8
2021 2022 2023 2024 2025 2026 2027
original forecast bad worse worst
28 Notes: Private households and NPISHs (= non-private institutions serving households); current US$; in comparison to our March model, mitigation effects across the supply chain were taken into account so that commodity prices
do not drive inflation as severely as originally modelled
Durable consumer goods will likely take a blow because higher food and fuel
bills need to be paid
Modeled impact on forecast by category (COICOP(1))
Housing maintenance Goods for routine Newspapers, books, and

Food Transportation services Social protection
and repairs household maintenance stationery
Water, garbage disposal, Services for routine
Non-alcoholic beverages Postal services Package holidays Insurance
etc. household maintenance
Telephone and telefax
Alcoholic beverages Electricity, gas, etc. Medical products Education Financial services n.e.c.(2)
equipment
Telephone and telefax
Tobacco Furniture Medical services Catering services Other services n.e.c.(2)
services
Audiovisual, photographic,
Clothing Household textiles Purchase of vehicles and information-processing Accommodation services
equipment
Footwear Household appliances Vehicle fuel and oil Major recreational durables Personal care products
Glassware, tableware,
Actual rent Vehicle parts Other recreational items Personal care services
etc.
Tools and equipment for Recreational and cultural
Imputed rent Vehicle services Personal effects n.e.c.(2)
house and garden services
Strong negative impact (-5% or less) Medium negative impact (-3% to -4%) Slightly negative impact (-1% to -2%) Positive impact (0% to 24%)
29 Notes: (1) Based on the Classification of Individual Consumption by Purpose (COICOP) (2) n.e.c. = not elsewhere classified

Total consumer spending is holding up rather well, but significant amounts are
being reallocated from discretionary items to food and fuel
Projected consumer spending worldwide by impact scenario in trillion US$ in 2022

56.1 55.4 54.8 54.1
Food & fuel 11.3 11.8 +4% +8% +12%

12.2 12.6
CG staples
3.7 3.7
(non-food & fuel) -2% 3.6 -3% -5%
3.5
CG discretionary 7.1 6.7 -6% 6.3 -12% 5.9
-17%
Vehicles 2.7 2.6 -3% 2.6 -6% 2.5 -10%
Staple services 22.0 21.7 -1% 21.4 -3% -4%

21.2
Discretionary
9.2 8.9 -3% 8.6 -6% 8.4 -9%
services
Original forecast Bad scenario Worse scenario Worst scenario
30 Notes: Private households and NPISHs (= non-private institutions serving households); current US$; in comparison to our March model, mitigation effects across the supply chain were taken into account so that commodity prices
do not drive inflation as severely as originally modelled
Over-stocked, over-hired,
over-built? Are
eCommerce companies
resetting expectations?
The COVID-19 pandemic and the following restrictions
imposed by governments on the public presented a unique
opportunity for eCommerce businesses and platforms to
thrive. Massive consumer demand in the sector accelerated
the pace and scope of hiring practices, logistics investments,
and digital advertising to bridge the gap. However, this
exaggerated growth led several eCommerce companies to
march into the post-pandemic era with a mindset all too
similar to the one they had during the rapid phase of
expansion. This strategy left these companies overstocked,
overstaffed, and unable to optimize their overhead expenses.
Major players are recalibrating their performance in 2022 from
the pandemic-driven surge by downsizing their human
resources, redirecting advertising budgets, and optimizing
inventory costs. eCommerce companies need to build
resilience, survive the downturn, and thrive in the next cycle.
31
eCommerce growth was overshadowed by sourcing, fulfillment, and advertising
becoming costlier, slower, and less effective
Global container freight rate index in US$ Job openings in the U.S. per industry in thousands Average CPC for Amazon Ads in the U.S. in 2021
in May 2022 $0.94
11,000
Education and $0.67 $0.70 $0.70 $0.72
10,000 Global schedule 2,166 $0.56
reliability in Dec’ 21 health services $0.88
9,000 Trade, transportation, $0.41 $0.71
of 32% was the 2,016 $0.65
and utilities $0.59
8,000 lowest since metric
Professional and
has ever been 2,002 $0.40
business services
7,000 recorded (2011) Leisure and
hospitality 1,570 Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct.Nov.Dec.
6,000
5,000 Government 1,042 Google paid search CPC growth by selected
category YoY in Q3 2021
4,000 Manufacturing 809
3,000 Beauty 41%
Financial activities 501
2,000 Labor Home and garden 33%
Construction 434 shortage for
1,000 warehousing Apparel 24%
Information 238 and logistics
Consumer electronics 21%
01/2019 01/20 01/21 01/22 06/22 (fulfillment)
Mining and
logging 36 Sports and recreation 14%
32
Sources: The Journal of Commerce online; U.S. Department of Labor – Bureau of Labor Statistics; eMarketer; Macarta
At the beginning of 2022, eCommerce funding as well as unicorn growth started
slowing down
Global eCommerce funding in billion US$ and amount of deals Global number of eCommerce unicorns and new unicorns 108
101
462 468
435
402 84
379 390 384 79
365 376
349 352 356 359 73
333 -14.8%
307
288 299 14.9 14.6
12.8 12.8
10.9
5.9 5.9 5.9 5.4 6.1 6.5 6.3

5.1 5.2 19 -52.6%
3.9
2.9 3.6 8 10 12
9
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Deals Funding Total Unicorns New Unicorns
33
Sources: cbinsights
Monthly web traffic of major eCommerce players has been continually declining
in the post-lockdown era
MoM(1) web traffic growth of selected eCommerce key player
Jul 20/21 6% 5% -7% 2% -13%

Aug 20/21 -19% 7% -10% -1% -16%
Sep 20/21 -5% 8% -5% -3% -16%
Oct 20/21 3% 6% -6% -8% -17%
Nov 20/21 -2% -2% -16% -7% -19%
Dec 20/21 20% -7% -15% -7% -22%
Jan 21/22 97% -3% -16% -4% -18%
Feb 21/22 55% -4% -9% -6% -18%
Mar 21/22 -22% -4% -12% -7% -20%
Apr 21/22 -24% -5% -13% -5% -18%
Mar 21/22 -34% -3% -11% -7% -17%
Jun 21/22 -25% -1% -9% -10% -17%
34 Notes: (1) Month-over-Month
Sources: Similarweb
The Salesforce Shopping Index had indicated particularly low performance for
European countries and predicted negative figures as early as Q4 2021
YoY(1) digital commerce (GMV) growth YoY (1) traffic (number of visits) growth YoY (1) order (number of orders placed) growth
Q4 21 7% 0% -3%
Q1 22 -2% -1% -11%
Q2 22 -6% -2% -9%
Q4 21 -2% -2% -1%
Q1 22 -20% -7% -16%
Q2 22 -24% -7% -18%
Q4 21 10% -1% -2%
Q1 22 5% -1% -6%
Q2 22 2% -3% -5%
Global Germany U.S.
35 Notes: (1) Year-over-Year
Sources: Salesforce
YoY(1) performance for Q1 2022 shows figures below expectations for most key
players in contrast to the pandemic-induced growth seen in Q1 2021
Quarterly revenue comparison of selected eCommerce key players for Q1 2021 and Q1 2022 YoY(1)
239%
! Online Stores:
▪ Q1 YoY - 1%
▪ Q2 YoY - 0%
Third-party seller
141% services:
▪ Q1 YoY – 9%
110% ▪ Q2 YoY – 13%
75% 74%
64%
51% 49% 47% 46% 44% 39% 36% 33%
22% 22% 18%
7% 5% 9% 6% 7% 6%
-1% -9% -2% -6%

-11% -14%
-76%
YoY Q1’ 21 YoY Q1’ 22
36 Notes: (1) Year-over-Year
Sources: Company information; Yahoo Finance

Major players forced to reassess in 2022 from pandemic-driven surge as market
capitalization ceased by mid-year for most of them
eCommerce revenue of selected key players in billion US$ Market caps of selected key players on the 1st of June of the respective year
19.6% 0.4% +22.3%
597 600
34.8% 14 957
10 5 19
10 5 -56.2%
21 6 15 724
499 7 820
3 75 76 782
18.9% 9 9 749
(1) 5
36
370
53 594
2 141 149
4 7 4 494
311 1 39 108 -56.4%
9 2 40 -77.4% -27.9%
(2) 37 4 328 -1.3%
-58.0% -52.4%
28 79 241
(3) 125
65 177
105 139 50 28 39 34 61 17 11
325 319 87 90
277 41 39 40 34 12 25 34 13 19 5
(4)
195
166
2018 2019 2020 2021 2022e 2019 2020 2021 2022
37 Notes: (1) Rakuten revenue from domestic eCommerce (2) Alibaba Group revenue from China commerce and international commerce (3) JD.com revenue from JD Retail
(4) Amazon revenue from online stores and third-party seller services
Sources: Statista Digital Market Outlook, July 2022; Company information; Yahoo Finance
More waves of layoffs are taking place in the industry, whose workforce boomed
between 2020 and 2021
Number of employees of selected eCommerce players in thousand Selected layoffs of eCommerce companies in 2022
+102%
layoffs in the broader
1,608 ~ 8000 eCommerce industry so
far in 2022
! Especially
1,298 quick commerce
faces a reckoning,
1st March 190 with other companies
such as Getir, Blinkit or
798 Jiffy having had layoffs
+69% 30th March 350 and closures
+147% in 2022
315 385 +41% +209% +100%
118 251 25th May 300
228
102
20 24 28 10 16 30 5 7 10
12th July 1,500
27th July 1,000

2019 2020 2021
38
Sources: Company information; layoffs.fyi; Reuters

Fintech payment providers strongly connected to eCommerce, particularly BNPL
services, are also witnessing mounting losses with their valuations tumbling
BNPL(1) faces numerous hardships Klarna’s GMV(2) vs. net result in billion US$ Klarna’s valuation development in billion US$
Macroeconomic climate 80
-86%
• Rising costs of borrowing and refinancing due to
53 45.6
surging inflation and ensuing interest rate hikes
35
• Shrinking discretionary spending by consumers
• Fading eCommerce boom
• Looming recession may lead to debt defaults

2019 2020 2021
• BNPL has yet to prove itself profitable
-0,10
Klarna’s outlook for the next years looks bleaker -0,15
10.7
• Various competitors are entering the market, even 6.5
5.5
big players such as Apple, Inc. and PayPal
• After rapidly expanding in 2021, Klarna is now

-0,83 08/19 09/20 06/21 07/22
downsizing and has laid off 10% of its staff
GMV Net Loss
39 Notes: (1) Buy Now, Pay Later (2) Gross Merchandise Value; all figures in US$ billion, annualized net result and GMV based on Q1 2022 financial figures; an average exchange rates for respective year have been applied to the findings from the financial report based on the IRS
website
Sources: Company information; Craft; Crunchbase
Given the current circumstances, eCommerce’s already low margins are under
even more pressure
Average industry net margins in the U.S in 2022(1) Pre-tax profit margins, % Cost margins, % (excluding OGS)
7% 64.3%
32% Financial Services
29% Software (Entertainment)
6%
25% Asset Management 60.9%
21% Tobacco
5%
17% Information Services
15% Real Estate
4%
13% Healthcare Products
13% Insurance
3%
13% Restaurant/Dining
10% Broadcasting
2%
8% Telecom. Services
7% Retail (Online)
1%
7% Education
7% Apparel
0%
3% Retail (General) 2011–2012–2013–2014–2015–2016–2017–2018–2019–
-5% Coal & Related Energy
12 13 14 15 16 17 18 19 20
-8% Air Transport Sale via Amazon Omni-channel
-29% Hotel/Gaming Total Pure online brick-and-mortar
40
Sources: Stern School of Business at New York University; McKinsey; ALVAREZ & MARSAL
Even Amazon’s eCommerce business demonstrates a trend of sinking and
currently negative operating income
Amazon operating income for North America and International in US$ billion
4.8
3.5
0.0
-1.8
-2.4
-2.9
Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022
41
Sources: Company information

By branching out into other sectors and revenue opportunities, established
eCommerce players are attempting to compensate for thin online retail margins
Amazon revenue by segment in billion US$ Alibaba Group revenue by segment in billion US$ Mercado Libre revenue by segment in billion US$
470
2
31
388
62
21 2
32
45 17
282 25
14 1 16 103
233
35 80
10 19
26 17
14
17 54
43 106 1
197 222 0 1 68 6 9 5
51 1
123 141 36
3 6 5 4 7
3 2 4 4 79 2 4 7
28 39 4 52
1 1 3 1 5 2
2018 2019 2020 2021 2018 2019 2020 2021 2019 2020 2021
Online stores AWS China commerce(2) Cloud computing
Third-party seller services Advertising services International commerce(3) Digital media Commerce(4) Fintech
Physical stores Other Cainiao logistics services Innovation initiatives
Subscription services
42 Notes: (1) January 2022 (2) China commerce includes China commerce retail, China commerce wholesale, local consumer services, core commerce – others
(3) International commerce includes international commerce retail, international commerce wholesale (4) Commerce includes ad sales and classified fees as well as logistic fees
Sources: Stern School of Business at New York University; Company information
Many large ecommerce players are therefore moving into the higher margin
advertising business themselves
Global advertising revenue of selected eCommerce players in billion US$ Worldwide print and radio ad spend in billion US$
94.3
1.7 1.9
3.8
78.9 6.0 76.8
1.5 1.3
2.5
5.4
28.1
59.7 1.2 39.0
1.7 0.9
47.6 4.7 31.2
1.1
1.1 0.5
37.2 4.1 19.8
0.9
3.3 0.7 0.3 12.6
9.2 48.7
37.1 41.8
28.3 31.5
22.7
2018 2019 2020 2021 2022e
Print Traditional Radio Total
43
Sources: Statista Advertising and Media Outlook, July 2022; Company information
Amazon not only tripled ad revenues in 2022, but also moved beyond its own ad
inventory by becoming a DSP and attacking linear TV advertising with Freevee
Amazon selected segment revenues in US$ billion Traditional advertising revenue in US$ billion Amazon‘s ad supported streaming offer
278
240 247 243
+210% 65
54 53 49
+4% 24
31 17 19 21
27 28 28
103 107 Amazon has launched its free, ad-supported
80
54 158 143 148 145 streaming channel Freevee in 2022. Originally
31 39
13 20 launched as IMDb TV in the U.S., the UK and Germany
are the second and third country worldwide in which
2019 2020 2021 2022e 2019 2020 2021 2022
Freevee was launched. Freevee offers classic series
Advertising Third-party seller services TV Radio Out-of-Home Print and movies as well as in-house productions.
Commercial breaks interrupt the content, as with
Amazon’s advertising business tripled over the last 3 Even though with all formats in decline, in 2021 30% of linear TV.
years (in 2021 being nearly 8x as large as Snapchat), all ad spending still came from traditional (non-digital)
With this strategy, Amazon is not only giving a cost-
but growth is strongly connected to their own add segments. TV advertising being the biggest one of it,
free opportunity to customers next to prime video, but
ecosystem in their marketplace environment. With a still accounting for a lot of revenues that could be
also eating into the linear TV ad spend ecosystem.
slowdown in growth for third-party seller services, captured from digital players.
revenue opportunities could be limited in the future.
44 Notes: (1) DeDemand-side platform
Sources: Statista Advertising and Media Outlook, as of July 2022; Company information
Besides advertising, direct selling gains global traction during the pandemic
particularly in the APAC region
What are DTC(1) brands? Global distribution on the number of direct selling Number and distribution of eCommerce platforms
independent representatives(2) in millions in the U.S.
DTC brands sell their products or services directly to
consumers without using intermediaries such as third- 72.3 72.7 74.5 800,000
party retailers, wholesalers, and/or agents. Typically, 110,000
sales are conducted online, but pop-up stores or other
physical locations sometimes appear to meet
consumer desire for the omnichannel experience.
! Amounts
to about 13%
The advantages of the DTC route are: of all
690,000 eCommerce
Higher revenue margin per product 14.2 14.5 15.7
18.1 businesses
17.5 14.4 17.5 14.9
13.4 in the U.S.
6.5 7.6 5.5
Direct access to consumer data and
insights for decision making
2019 2020 2021 2022
Asia/Pacific South & Central America DTC businesses
Better customer engagement that
North America Africa/Middle East Traditional eCommerce platforms
establishes brand loyalty
Europe
45 Notes: (1) Direct-to-consumers (2) Independent Representatives have signed an Independent Contractor agreement with a direct selling company enabling them to purchase products at a discount, sell, sponsor, and earn.
Sources: Wfdsa.org; Forbes; The Future of Customer Engagement and Experience; Harvard Business Review; PipeCandy
Being hyper focused on empowered consumers is the mantra for establishing a
successfully DTC(1) brand
Casper: The Sleep Company Care/of: Personalized vitamins is one quiz away BarkBox: Taps into an unmet millennial market
Founded in 2014, this a mattress company achieved Care/of was founded in 2016 aimed to transform the BarkBox was founded in 2011 and targeted the niche
US$100 million in sales in under two years. From the vitamin buying experience into a smooth digital demographic of millennial die-hard dog lovers.
start, Caspar’s magic formula was in its simplicity: it journey. Website visitors take a quiz to provide key BarkBox provides them with a monthly themed box
produced one mattress that was affordable, top health information. With the help of an algorithm, a of toys and treats designed to please and includes a
quality, and delivered to the customer’s doorstep. personalized and clinically based regimen of surprise gift in every shipment. BarkBox achieved a
By doing so, Casper provided a great shopping vitamins is put together and delivered by subscription revenue of US$250 million in 2019.
experience and eliminated confusion by offering a to the customer. In 2020, Bayer acquired a 70% stake
single product to consumers. in the company that was valued at US$225 million.
46 Notes: (1) Direct-to-consumers
Sources: cbinsights; Company Information

By incorporating DTC(1) into their sales channels, retail juggernauts such as Nike
have redefined their company strategy and successfully generated revenues
NIKE DTC sales in billion US$ Nike’s journey from traditional marketing-first retailer to D2C juggernaut
42 Over the years, Nike has generated high revenues from its DTC channel by
! incorporating the design and execution of two key strategies into its business,
37 38.7% of Consumer Direct Offense and Consumer Direct Acceleration.
36
34 total
32 16 Consumer Direct Offense the triple-double strategy is based on three concepts:
30 revenue
12 Double innovation offers an in-depth selection to its franchises, Double speed
10 12
9 minimizes the time incurred between production and selling, and Double direct
8
connection focuses on selling more products via digital channels.
Consumer Direct Acceleration, which is the most recent phase of the Consumer
Direct Offense strategy, focuses on three areas: creating a digital marketplace of
24 25 26 the future, offering its products to all consumer demographics, and assertively
23 23 23
investing in its digital transformation process.
These strategies have not only helped Nike effectively address the changing
consumers behaviors but have also successfully optimized its costs.
2016 2017 2018 2019 2020 2021
Wholesale customers NIKE Direct
47 Notes: (1) Direct-to-consumers
Sources: fabric; SeekingAlpha; Company information

Although many brands are aggressively shifting towards DTC(1) to generate
higher profit margins, its underlying profitability remains questionable
DTC books high revenue per unit, but is the shift profitable for brands? Revenue vs. net results of Casper in US$ million
There are many benefits company would have by shifting to DTC: it has better The success of Casper Sleep, Inc. depended largely on its investment in marketing,
control of its overall brand, able to collect detailed consumer insights and achieves but its path to profitability appeared rocky as a result.
higher revenue per item sold. However, three factors affect its profitability:
Although revenue per item may seem to grow by using the DTC model, 497
439 436
the overall revenue of the company does not because the abandonment
of the wholesale channel leads to a loss in revenue units.
eCommerce platforms generate significant profitability by saving rent

and labor costs. However, ecommerce creates its own set of expenses,
including fulfillment, logistics, heavy marketing, technology, and return
policies.
DTC brands spend on digital advertising in order to acquire customers

but without a physical infrastructure, its goals are not necessarily clear. -93 -90 -80
Customer Lifetime Value CLV(2) is one such matrix often overlooked but 2019 2020 2021 (Sep)
potentially beneficial for DTC brands.
Revenue Net loss
48 Notes: (1) Direct-to-consumers (2) Customer Lifetime Value captures every unique customer’s net value and future potential, reflecting the total cost of post-acquisition experience, including the costs of goods, fulfillment, and delivery incurred across all that customer’s
transactions over time
Sources: Company Information; Fast Company; SGB Media Online
Frictionless social and placeholder
metaverse commerce:
the future of eCommerce?
The eCommerce market is evolving just as quickly as it is
expanding. One consequence of rapid innovation in this space
is the emergence of an ecosystem that reduces friction within
the value chain. These interconnected platforms, which are still
being developed by several companies, continue to generate
interest among VCs. In particular, social commerce and
payment platforms have significant potential to shape the
future of eCommerce. With the line between the physical and
digital world blurring day by day, technologies such as
blockchain, artificial intelligence, augmented and virtual reality,
cryptocurrency payment platforms, and 5G are shaping
consumer shopping into an increasingly seamless experience
in the metaverse.
49
A short-term development of the broader eCommerce ecosystem is increased
connectedness that removes friction along the value chain
Overview of the broader eCommerce marketplace stack

Buy now, Fintech
pay later
D2C banking,
Lending Insurance
trading
Advertising Logistics
Moving into vertical search Fintech

Potentially levelling the playing field by enabling
asset-light players to have full-stack capabilities
Focusing on advertising platform Advertising Marketplace Logistics
stack
Creating marketplaces
Software Software Own

Own Product
Product
Software directly competing SaaS with add-on Competing directly with marketplaces &
with Amazon’s platform marketplace for doctors eCommerce
50
Sources: Speedinvest, Adevinta Ventures, dealroom.co

Several eCommerce connected platforms that can leverage certain aspects of
frictionless commerce continue to gain much attention from investors in 2022
Global top eCommerce equity deals in 2022

Round amount in Q1 2022 in million US$ Valuation
Series Country
in US$ million
1,500 40,000 Series D
1,000 27,000 Series H
510 11,000 Series E
355 5,700 Series E
275 3,000 Series E
250 2,600 Series E
282 2,200 Series C
290 1,700 Series E
51
Sources: CB Insights
In addition to selling classic sports apparel, Fanatics offers sports collectibles,
NFTs, trading cards, and merchandise, as well as sports betting and iGaming
Fanatics, a global leader in licensed sports merchandise, has drawn the attention of investors from various industries. The company transforms the digital sports
experience by becoming a real-time, on-demand platform for a broad array of sports products fans. The company currently has a database of more than 80 million
sports fans, which gives Fanatics the advantage of being able to provide personalized offers and acquire/generate customers for its new businesses.
Fanatics‘s funding from 2018 – 2022 in million US$

1,500
Innovative vertical commerce model that
1,000 distributes and manufactures on-demand
licensed products to fans
645
300 350
225 170
Family of
Manufacturers of trading companies Official NFT ecosystem that
2012 2013 2015 2017 2020 2021 Q1 2022
sport cards, collectibles, buys and trades digital assets
Diversity of Fanatics investors and arts
Entertainment
Financial Institutions Athletic Organizations • Jay-Z
• SoftBank Group • National Football League • Roc Nation
• Thrive Capital • Major League Baseball
• Blackstone Group • Sliver Lake Coming Soon:
• Fidelity Management Betting and Gaming platform
52
Sources: Company information; CNBC; fastcompany; Crunchbase

Checkout.com has become Europe‘s top valuable payment provider with a
US$40 billion valuation in 2022
Checkout.com, a cloud-based payment solution for marketplaces, has raised US$1 billion in a funding round that makes it the UK’s most valuable private tech company.
The company almost tripled its valuation to US$40 billion in a year. The company succeeded in catching up to the online shopping trend after several years of profitability
and expanded its business to over 1700 employees in 19 global offices in just ten years.
Checkout.com timeline Funding amount in million US$

1,000
Authorized as an
Checkout.com electronic money
established institution in the U.K. 450
230
150
2012 2013 2017 2018 2019 2020 2021 2022
Partner with major payment • 200+ employees • 1000+ employees

institutions • 8 global offices • 17 global offices
• 500+ employees
• Authorized as an electronic money • 1700+ employees
institution in France • 19 global offices
53
Sources: Company information; rapyd; techcrunch

Ankorstore, a wholesale marketplace that connects shop owners and specialist
brands with neighborhood retailers, reached unicorn status in three years
Ankorstore, founded in July 2019, is the fastest growing online wholesale marketplace that has reached unicorn status in three years. Ankorstore connects 20,000
authentic brands and 250,000 local retails across 33 countries in Europe. Unlike other major commercial marketplaces, Ankorstore has focused on localization and has
been successful with this strategy.
Comparison of Ankorstore’s and Amazon’s pages in the beer category Ankorstore’s funding amount in US$ million
283
100
30
7
2019 2020 2021 2022
The beginning of
Ankorstore, a European 3 Years Reached unicorn status
wholesale marketplace with a valuation of
for local products US$1.75 billion
54
Sources: Similarweb, ankorstore, amazon, zoominfo

Long-term topics such as social commerce will lead to the next wave in online
shopping: leveraging convenience and network effects of social media
Global social and influencer ad revenue in US$ bn Users purchasing from social networks in 2021 Global social commerce revenue in bn US$
+70% China 46% +249%
385 U.S. 36% 2,620

+86% 226 Australia 30%
51 Canada 26%
28 2,040
Russia 26%
Influencer Advertising Social Media Advertising
Brazil 25% 1,590
2022 2027
UK 24%
1,240
Global number of social media users in million France 23%
964
5,649 5,852 Italy 23%
5,174 5,423 751
4,594 4,898
Spain 22%
Mexico 21%
Germany 18%
Japan 18%
2022 2023 2024 2025 2026 2027 2022 2023 2024 2025 2026 2027
55
Sources: Statista Advertising & Media Outlook, July 2022; eMarketer; Grand View Research
As the line between the physical and digital world becomes increasingly blurry,
the metaverse will reimagine the path to omnichannel shopping experiences
Overview of future next-level commerce
3D assets (NFTs(1)) and virtual try-ons supported In conversational commerce, brands and
by AR(2) and blockchain will pave the way to retailers leverage direct messaging
customized on-demand apparel-making and products platforms to interact on a personal level with shoppers
In Headless Commerce, brands As brands seek ways to improve customer
optimize their approaches for reaching customers engagement, virtual stores in the metaverse
via maximum interfaces such as smartphones, present a unique opportunity for retailers to
smart speakers, apps, and social media provide their shoppers with an immersive experience
Brands that integrate cryptocurrency options into Retailer websites that leverage AI technology
their eCommerce platforms can enable faster can provide individualized recommendations
payments with a broader (global) customer reach to customers based on their shopping profiles
56 Notes: (1) Non-fungible tokens (2) Augmented Reality
Sources: Visual Capitalist; Forbes; SmartHint; cbinsight

CHAPTER 2
The ascent of the crypto

economy
Originally released in May 2022 (as Chapter 1)
Table of contents
The ascent of the crypto economy
Cryptocurrencies with their disruptive potential have gone mainstream 59

How blockchain technology is reimagining the world of internet, money,
and finance 92
58
Cryptocurrencies with their
disruptive potential have
gone mainstream
The ascent of cryptocurrencies has been turbulent,
accompanied by many advances and setbacks. In 2009, the
first Bitcoin block was mined; in 2015, Ethereum introduced
the first programmable blockchain; in 2018, 80% of the market
was erased by a speculative bubble; and most recently, Bitcoin
has even become a legal tender in some countries. The
industry has moved on from concepts and whitepapers to real-
life applications, adding over 10,000 different cryptocurrencies
with a market capitalization of over US$2 trillion (end of 2021),
creating an entire ecosystem of use cases. Despite significant
advancements, cryptocurrencies remain highly controversial
due to high volatility, increasing numbers of cyberattacks, and
issues related to energy consumption and scalability.
Nevertheless, many startups and companies are entering the
sector, and more and more governments, investment funds,
and corporations are formulating their crypto strategies,
transforming the sector into a mainstream industry.
59
A cryptocurrency is a tradable and decentralized digital asset built on blockchain
technology
Simplified explanation of how cryptocurrencies work(1)
What is a cryptocurrency?
Someone initiates a The transaction is broadcasted to Nodes attempt to validate the A cryptocurrency is a digital currency.
transaction. all nodes of a peer-to-peer transactions based on embedded Each coin consists of cryptographic
network. algorithms (PoW, PoS(2)). signatures definitively proving
individual ownership.
What is a blockchain?
A blockchain is a distributed ledger
that records all transactions by
gathering them in blocks, which are
The validated transactions are then immutably chained together.
The transaction is verified! Nodes Once validated, the signed block is
continue to work on the next block. broadcast to the other network bundled as a block and added to
nodes, which then accept it. the blockchain.
60 Notes: (1) Based on Bitcoin network; some differences may apply to other cryptocurrencies and blockchains utilizing a different architecture (2) Proof of work and proof of stake – they are the two major consensus mechanisms
used by most cryptocurrencies today (see slide 35 for explanation)
Sources: Statista Digital Market Outlook 2022
The ascent of cryptocurrencies has been turbulent, accompanied by many
advances and setbacks
Timeline of selected events leading to the rise of cryptocurrencies
▪ Litecoin and Namecoin ▪ Ethereum introduces the first ▪ The speculative bubble surrounding ▪ El Salvador is the first country to adopt
emerge as forks of the programmable blockchain, which can be cryptocurrencies and ICOs(1) bursts, Bitcoin as legal tender whereas China
original Bitcoin project. used for creating tokens. erasing 80% of market cap. bans cryptocurrency transactions entirely.
▪ Hacker steals US$50 million from The DAO, ▪ Cryptocurrencies surpass a market cap of
leading to the hard fork of the Ethereum US$2 trillion, NFT(2) sales increase by a
blockchain. factor of 262.
2008/2009 2012/2013 2017 2020 2022

2011 2015/2016 2018 2021
▪ Satoshi Nakamoto ▪ Proof of Stake is developed as an ▪ Various startups, research groups, ▪ PayPal begins to offer ▪ Bitcoin becomes legal tender in
releases Bitcoin alternative consensus mechanism and corporations found Enterprise cryptocurrencies to U.S. Central African Republic & Panama.
whitepaper; first block ▪ Coinbase is launched and becomes Ethereum Alliance. customers for buying, ▪ Donations are made to Ukraine in
is mined in 2009. one of the major exchanges. ▪ The hype surrounding holding, and selling. cryptocurrencies; speculation arises
▪ Dogecoin becomes the first meme cryptocurrencies leads to explosive that cryptocurrencies could be used
coin(3). increases in price. by Russia to evade sanctions.
61 Notes: (1) Initial Coin Offerings (2) Non-Fungible Token (3) A meme coin is a cryptocurrency that originated from an Internet meme or has some other humorous characteristic
Sources: Company information, VentureBeat, Business Insider, Enterprise Ethereum Alliance, Salvadoran Legislative Assembly, BBC, Reuters, Euronews
Today, there are just over 10,000 cryptocurrencies, indicating a dramatic
increase from just a handful of digital coins in 2013
Global number of cryptocurrencies

+15,523%
10,311
8,554
A bull run
reinvigorates
the crypto
The bubble landscape
around ICOs(1)
bursts, leading to
receding interest in
Cryptocurrencies cryptocurrencies
4,118
first gain notable
traction
2,388
2,073
1,353
506 562 644
66
2013 2014 2015 2016 2017 2018 2019 2020 2021 Apr 2022
62 Notes: (1) Initial Coin Offerings
Sources: CoinmarketCap, GP Bullhound, The Motley Fool, Investing.com

Cryptocurrencies from its infancy in 2009 have evolved into an entire ecosystem
with several use cases
Selected categories of cryptocurrencies based on their use cases
Cryptocurrencies are establishing its Gaming & Entertainment Store of Value Bitcoin is an asset that is intended to
prominence in the virtual games and

Store Store
maintains its value from the effects of
world, by tokenizing in-game assets. inflation by its scarcity.

AXS MANA SAND BTC
Stablecoins are digital currencies that Stablecoins Smart Contracts Cryptocurrencies that come with a self-
are pegged to a less volatile reserve

Crypto executing contract between two parties
asset such as the U.S. dollar or gold.

Universe being directly written into lines of code.
USDT USDC DAI ETH ADA DOT
Decentralized finance (DeFi), uses Decentralized Finance Virtual Currency Cryptocurrencies that are specifically
cryptocurrency and blockchain created for transaction purpose.
technology to provide financial services..

UNI AAVE YFI XRP BCH LTC
Exchange tokens are issued with the Exchange Tokens Utility Tokens Utility tokens provide token holders with
purpose to raise funding to maintain privileged services used as promotional
and improve infrastructure. tools by the issuing company.
BNB HT KCS FIL MATIC BAT
63 Notes: (1) Exchange tokens are issued by crypto exchanges with the purpose to raise funding for the platform to helps it maintain and improve its infrastructure
(2) Utility tokens serves some use case within a specific ecosystem where these tokens allow users to perform some action on a certain network
Sources: MVIS
The crypto segment reached an average market capitalization of US$2 trillion in
2021 with Bitcoin and Ethereum constituting more than half the entire sector
Average market capitalization of the crypto segment in US$ billion in 2021
Other 420
325
Terra 9
LUNA(1)
USD-
39 8 7 Coin 12
Avalanche
Polygon
27 23 27
9
890 XRP 48 61 33 Binance Shiba-Inu 6
Cryptocurrencies Smart contract platforms Exchange tokens Stablecoins Memecoins Other
64 Notes: Terra Classic (LUNC, or LUNA 1.0)
Sources: CoinMarketCap, TradingView, CoinGecko

Compared to other popular asset classes, cryptocurrencies are still small in
terms of market capitalization
Market capitalization of different asset classes in comparison in US$ billion

16%
42%
56%
289%
616 2,396 9,038 14,091 87,488 124,100 280,600 326,500
Cryptocurrencies Precious Metals Equities Real Estate
2017 2021
65 Notes: The market capitalization considered for the assets is the last date of the respective year
Sources: Statista Digital Market Outlook 2022, Statistics.world-exchanges.org, National Minerals Information Center, U.S. Geological Survey, Savills Impacts
The pandemic triggered a significant increase in revenues made in the crypto
sector with growth of 481% from 2019 to 2020
Global cryptocurrencies revenue forecast in US$ billion
After an initial
shock, the crypto 75.3
market rebounded
to record highs 67.1
during the
58.5
pandemic +51% (1)
49.3
39.3
+481% 31.1
21.8
1.8 3.7 3.7
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
66 Notes: (1) CAGR: Compound Annual Growth Rate / average growth rate per year
Sources: Statista Digital Market Outlook 2022, CoinGecko, BitInfoCharts

As cryptocurrencies grow in value, transaction volumes have also increased,
nearly catching up to network volumes to that of Visa and Mastercard
Total transaction volume for 2021 in US$ trillion

11
US$10.8tn
10
8
US$7.7tn
7
5
US$4.6tn
4
US$3.6tn
3
0
Jan ’21 Jun ’21 Oct ’21 Dec ’21
Ethereum(1) Bitcoin(1) MasterCard(2) Visa(2)
67 Notes: (1) Ethereum and Bitcoin payment volume corrected to account for non-meaningful transactions (2) VISA and MasterCard payment volume extrapolated from quarterly reports
Sources: Company information, CoinMetrics

Notably, the total transaction volume is still limited due to transaction delays and
scalability issues with cryptocurrencies
Transaction finality(1) of different cryptocurrencies in minutes in January 2022(2)
40
Dogecoin 40
Cardano 10
Shiba Inu 5
Polkadot 2
Avalanche 1
near-instant
Solana near-instant
near-instant
68 Notes: (1) Transaction finality refers to the moment when parties involved in a transaction can consider the transaction to be completed (2) All times listed are approximate and can vary depending on network conditions
Sources: Kraken.com
Because all cryptocurrencies inevitably experience huge fluctuations in their
valuation, they remain a high-risk investment
Annualized and average daily price volatility of top eight coins by market capitalization in 2021
421%
162% 153% 148% 148%

131%
107%
81%
22%
8% 8% 8% 8% 7% 6% 4%
Dogecoin Solana XRP bnb Polkadot Cardano Ethereum Bitcoin
Annualized Price Volatility Avg. Daily Volatility
69 Notes: (1) Annualized price volatility is daily volatile of each coin scaled for a one-year period based on the period from January 1, 2021 through December 31, 2021
(2) Daily Volatility is the average difference between the price on a given day and the average price over the time period
Sources: Statista Digital Market Outlook 2022, CoinMarketCap
Volatility and risks are becoming significantly evident since beginning of 2022
when a market-wide extreme loose in value started
Cryptocurrencies total market capitalization in US$ trillion Bitcoin price in US$

2.5 70,000 67,567
2.25 63,503
2.14
2.04 60,000
2.0 -16%
-24%
1.71 1.70
1.63 50,000
-53%
1.5 -58% -72%
1.23 40,000
1.22
0.92
1.0 30,000 29,807
0.83
17,430 19,107 19,018
20,000
13,016
0.5 24th Jul’
8,424 -81%
10,000 5,014 -60% 22
3,584
Jan’ Feb’ Mar’ Apr’ May’ Jun’ 24th Jan’ Jun’ Jan’ Jun’ Jan’ Jun’ Jan’ Jun’ Jan’ Jun’
22 22 22 22 22 22 Jul’ 18 18 19 19 20 20 21 21 22 22
22
70
Sources: Coinmarketcap, Coingeko

Stablecoins are one way to deal with the volatility problem of cryptocurrencies
because they are designed to preserve the value of digital assets
How Stablecoins work? Top-5 coins by market capitalization(1) in US$ billion in 2022
A Stablecoin is a digital currency that is pegged to a less volatile reserve asset such
as the U.S. dollar or gold. Stablecoins were introduced to minimize volatility relative Bitcoin 754
to unpegged cryptocurrencies like Bitcoin.
Ethereum 354
Sender Receiver
Miners validate the transfer of bitcoin
Tether 83
Sender buys Receiver exchanges

Bitcoin with fiat(2) Bitcoin with Stablecoin BNB 65
Exchange
facilitates
Bank trading
Crypto company issues USD Coin 49
Stablecoins pegged to US$
Stablecoins Other Cryptocurrencies
71 Notes: (1) 05.05.2022 (2) Fiat money is a type of currency that is not backed by any commodity such as gold or silver, and typically declared by a decree from a government (e.g. Euro, USD, Yen)
Sources: Fintech Futures, Investopedia, Coinmarketcap

Terra fails to establish the working concept of algorithmic Stablecoins with the
prices of LUNA(1) nose-diving and UST(2) losing its peg in May 2022
What are the different types of Stablecoins? The collapse of the Terra protocol
Collateralized Stablecoins Algorithmic Stablecoins Terraform Labs designed the Terra protocol that issued the first algorithmic
Stablecoin UST and LUNA(1), the latter of which algorithmically backs the former
Erased total market
capitalization of about
LUNA(1) price (US$) US$31bn (LUNA)(1) and UST price (US$)
Collateralized Stablecoins are minted Algorithmic Stablecoins do not use the US$16bn (UST)
1.00
or burned when assets such as fiat concept of depositing collaterals. They 100 1.0
86.17
currencies, gold or cryptocurrencies leverage algorithms and smart contracts to 0.80
80 0.8
are deposited to or withdrawn from manage supply and demand of tokens, In attempts to
maintain the peg of
their reserves thereby, maintaining their price stability 60 UST, the supply of 0.6
LUNA tokens sky-
rocketed to >25bn
40 0.4
causing it to reach a
rock-bottom price
When Stablecoins (UST) price is <US$1, the 20 and the UST peg 0.13 0.2
To maintain the stability of the further falling
protocol incentivizes users to burn Stablecoins 0.00 0.00
Stablecoins peg there is a need for 0 0.0
large volumes of liquid reserves and mint the linked cryptocurrency (LUNA)(1) in 4/18/22 5/2/22 5/12/22 5/17/22
the protocol
UST LUNA(1)
72 Notes: (1) Version 1.0 Terra Luna - Native token - since 28th of May LUNA actually refers to the “new” 2.0 version of the coin called Terra (LUNA). The “old” coin is now being referred to as Terra Classic (LUNC)
(2) Terra USD - Stablecoin
Sources: Coindesk, Coinmarketcap, Sila, Gemini, Bitcoinist
Despite significant advancements, cryptocurrencies remain highly controversial
due to increasing cyberattacks within the past few years
The biggest crypto heists of all time in US$ million
(2022) 625
(2021) 610
(2018) 532
(2014) 470
(2021) 326
(2020) 275
(2021) 200
(2018) 170
(2016) 72
(2017) 64
(2018) 62
73
Sources: Tech Monitor, Cointelegraph

Although Bitcoin received its fair share of negative attention, early-stage
investments would have yielded an extremely high return
US$100 of investment in shares of Bitcoin and Ether compared to mega corporations' stocks in 2012 and its respective yield in 2021 in US$(1)
1,000,000 557,719
Bitcoin
100,000
31,301
Ethereum
Telsa
10,000 19,059
1,566 Microsoft
1,000 1,344 Amazon

1,230
Meta
347 Johnson & Johnson
100
143 Alibaba
10
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
74 Notes: (1) Initial value as of 03/01/2012 or earliest available. Because of the huge difference in size, the data is shown as logarithmic scale in this chart.
Sources: Yahoo finance, Coindesk, Investing.com

While Bitcoin is often described as an alternative to gold, its historical price
action suggests it is more closely related to stocks
52-week rolling correlation between Bitcoin (BTC) with S&P500, NASDAQ and Gold
Correlation coefficient [r](1)
1.0
28th April
2022
0.5
0.0
07/17 01/18 07/18 01/19 07/19 01/20 07/20 01/21 07/21 01/22
-0.5
-1.0
S&P500 - BTC NASDAQ - BTC Gold - BTC
75 Notes: (1) 1.0 = very strong relation two each other; 0 = no relation to each other; -1.0 = strong negative relation to each other - Chart shows correlation in 52-week sliding window preceding the date; the correlation coefficient
changes as market conditions change
Sources: Yahoo Finance
So far, there is a high rate of consumer adoption for cryptocurrencies in the US
as well as in emerging economies
Top ten countries by cryptocurrency users in 2021 Cryptocurrency user penetration rate(1) in 2021
Country Users (millions)
India
107.0 Russia
United States
26.3
Russia 7.87%
11.4
Indonesia USA South Korea
7.4
Nigeria
6.6 India
7.91% 6.03%
Brazil
6.5
Kenya 7.68%
Vietnam
4.2
Japan
4.0 6.22%
Thailand
4.0
Pakistan not data available
3.7 0.98% 8%
76 Notes: (1) The penetration R/rate is the share of active paying customers (or accounts) from the total population of the selected market (market segment, region) for each year

Based on the off-chain activities of the exchange locations, Asia-Pacific and
Europe are heavily involved in the trading of cryptocurrencies
Share of transaction type based on the off-chain activities(1)
6%
24% 28%
25% 38%
47%
24%
27%
17%
20%
69%
52%
45% 45%
33%
Asia-Pacific Europe Latin America North America Middle East &

Africa
Open market(2) Internal account(3) External wallet(4)
77 Notes: (1) Off-chain transactions refer to those transactions occurring on a cryptocurrency network that move the value outside of the blockchain (2) Engage in an open market buy/sell order on the exchange’s order book
(3) Internal transfer on the exchange’s recordkeeping system to another user account in the exchange (4) On-boarded exchange balance to a wallet external to the exchange
Sources: Cambridge Centre for Alternative Finance
In rare cases, Bitcoin made its way to the national treasury of some countries
because of new regulations, crackdowns on cybercrime and donations
Bitcoin equivalent in US$ million held by governments of different countries

8,847
Bulgaria has more bitcoins than gold in its treasury. The country holds
213,519 Bitcoins, which is US$8.8 billion compared to its US$2.5 billion
gold reserve. This staggering number of Bitcoins was confiscated by
Bulgarian authorities as part of a law enforcement operation in 2017.
Ukraine’s government is raising donations via cryptocurrencies and

using them to aid purchases of critical supplies. As of April 05, 2022,
Ukraine has raised more than US$60 million through digital coin
donations, of which US$41 million has been spent on acquiring
bulletproof vests, helmets, and medical supplies.
1,920
El Salvador officially made Bitcoin legal tender in September 2021 as
394 an attempt to reduce costs in international remittances, lower the
82 3 percentage of underbanked people, and minimize the reliance on the
Bulgaria Ukraine El Salvador Finland Georgia U.S. dollar. Bitcoin was declared as legal tender in Central African
Republic & Panama in April 2022.
78
Sources: Bitcoin Treasuries: 59 Biggest Companies Holding, Bloomberg, PwC, CEIC Data
In addition to adopting regular cryptocurrencies, some countries have taken the
initiative to create their own central bank digital currencies (CBDCs)
How do CBDCs work? State of selected CBDCs(1)
Central bank digital currencies are digital tokens that

are very similar to cryptocurrencies but are issued by EU Sweden Bahamas
a centralized authority (central banks and government In July 2021, the European The Swedish Central Bank, Project Sand Dollar was
Central Bank (ECB) decided has undertaken a digital launched in October 2020 to
institutions). They are pegged to the value of that
to develop a digital euro. A currency piloting project. It support access to financial
country's fiat currency. digital euro would not focuses on issuing e-krona services in the Bahamas,
replace cash, but rather as a digital currency by the whose archipelago of 700
complement it and thus Riksbank. Like bills and islands makes cash
Sender Receiver
would give consumers an coins, e-krona would be distribution difficult.
2. Banks validate the transfer additional payment option. guaranteed by the state.
China Canada South Korea

The People’s Bank of China The Canadian project In May 2021, the Bank of
is in the test phase of the Jasper started in 2017 and Korea (BOK) stated its intent
1. Sender 3. Receiver digital yuan, also known as marks a milestone in the to select a technology
transfers fiat to exchanges the e-CYN. China has already payments industry. It is the supplier through an open
distributed 200 million first time that a central bidding process to research
digital currency digital currency to yuan (US$30.7 million) in bank cooperates with the the practicalities of a CBDC.
Bank issues,
local fiat digital currency as part of private sector to realize a The first pilot phase has
validates &
pilot projects across the distributed ledger been successfully completed
redeems country. A digital yuan app technology (DLT) and the second phase will
was also launched in 2022. experiment. continue until June 2022.
79 Notes: (1) March 2022
Sources: CNBC, European Central Bank, Bank of Canada, Library of Congress, Reuters, Atlantic Council, Fintech Futures, Investopedia, IMF
Mainstream companies across multiple industries took interest and have a
positive stance on cryptocurrencies
What can organizations do with cryptocurrencies? Selected companies having a positive stance on cryptocurrencies(2)
Gartner predicts that by 2024, at least 20% of large enterprises will use digital
currencies for payment, stored value or collateral.(1)
▪ Management reporting
▪ Treasury and accounting
Value ▪ Security wallet and custody services
▪ Stablecoins and other cryptocurrencies for payments

▪ Cooperation with payment processors offering
Payments cryptocurrencies such as Square, PayPal, BitPay, and Coinbase
Positive stance:
▪ Cryptocurrency and stablecoin holdings as collateral for income
generation (e.g., lending, liquidity provision) ▪ Accepting crypto as payment method
▪ Cooperation with companies that bridge centralized and ▪ Offering cryptocurrency-related products or services
decentralized finance ▪ Hiring for crypto products or services
Leverage
▪ Having cryptocurrencies in treasury
80 Notes: (1) 84% of surveyed finance executives also say that, due to its volatility, holding Bitcoin poses a financial risk (2) 32 out of the top 100 public companies (only 7 have a negative stance on crypto) surveyed in October 2021
Sources: Gartner, BlockData

In 2021 investments into the cryptocurrency and blockchain sector skyrocketed
to over US$25 billion
Venture and private investment into crypto and blockchain sub verticals in US$ billion
+710%
25.1
5.8
3.0 3.1
0.6 0.9 1.1
2015 2016 2017 2018 2019 2020 2021
81 Notes: Includes some Data Management, SaaS and Business Intelligence Platforms
Sources: The Block Research, Pitchbook, Crunchbase

Some companies take an active approach by buying or accepting direct crypto
payments, predominantly with Bitcoin
Public companies with highest number of Bitcoins on their balance sheet

129,218 Global Bitcoin supply distribution
Circulating Bitcoin supply: 19,008,825 US$751bn(1) in total value

Amounts to
Supply limit: 21,000,000(2)
US$
5,348,087,506(1)
Non-institutional held: 17,512,482 92% of total(1)
ETPs(3): 877,051
Private companies: 341,384
8% of total(1)
Publicly traded companies: 229,875
43,200 Government holdings: 48,1084
8,133 8,027 5,243 5,242 4,487 4,464 4,032 4,000 3,673 2,317 1,717 1,170 941
Bitcoin Argo
Marathon Group Blockchain Seetee
Digital
82 Notes: (1) 11.04.2022 (2) Bitcoin is edging closer to reaching its finite, maximum level of supply, which is pushing up its price and making it more difficult to mine. The last of which was forecasted to be mined around the year 2140
back in 2017 - with the assumption that the rate of mining is reduced by half every four years. (3) Exchange-traded products are types of securities that track underlying security, index, or financial instrument
Sources: btcdirect.eu, bitcointreasuries.net, bitiinfocharts.com, coinmarketcap.com
After prices hit an all-time high for Bitcoin and institutions invested heavily in
crypto at the end of 2021, prices and inflows have leveled off
Average weekly Bitcoin price compared to net crypto asset institutional inflow and outflow
Average Bitcoin price per week in US$ Net crypto asset inflows/outflows per week in US$ million
65,000 400
60,881 306
60,000 300
56,819
184 180 200
55,000 151 154 55,532
109 127
88 85 75 100
49,334 49,183
50,000 14 19
0
47,870
45,000 42,778 43,326
42,050 -47 -100
44,360 -97
-110 42,904
40,000 -142 -200
37,186 40,437 40,799
-207 38,949 39,198
38,293
35,000 -300
Week 46 47 48 49 50 51 2 4 5 6 7 8 10 11 12 14 16
(Nov’21) (Nov’21) (Dec’21) (Dec’21) (Dec’21) (Dec’21) (Jan’22) (Jan’22) (Feb’22) (Feb’22) (Feb’22) (Feb’22) (Mar’22) (Mar’22) (Mar’22) (Apr’22) (Apr’22)
83
Sources: Coingeko, CoinShares, ETCGroup

Many startups and companies are entering the crypto sector to make money
with all kinds of new solutions, resulting in the creation of a diverse ecosystem
Selected key players per segment in the crypto space
Exchanges Institutional Trading Asset Management Tokenization Infrastructure Crypto Banking Retail Wallets (Execution)
CeFi DeFi
OnX
Miners NFT Solutions Tax Solutions Data Borrowing/Lending Payments

CeFi DeFi
Crypto ATMs
84
Sources: Company information, FT Partners Research

Crypto exchanges such as Binance that enable users to buy, sell, or trade
cryptocurrencies are one of the most prominent examples in the sector
Largest cryptocurrency exchanges based on 24- Selected cryptocurrency exchanges and company figures
hour volume in US$ billion in 2022
24.1
7.0
6.8
6.6 Founded 2017 2012 2016
6.0
5.6
Employees 4000+ 3700+ 3000+
5.3
4.8
TOKENCAN 4.0 Cryptocurrencies 500+ 40+ 200+
3.8 offered cryptocurrencies
cryptocxasxasaurren cryptocxasxasaurren
3.4
cie cie
3.4
Users 29m 89m 10m
2.9
2.8
2.8 Revenue (2021) ~US$14.6bn US$7.8bn ~US$1bn
85
Sources: Company information, earthweb.com, businessofapps.com, Financial Times

With a seven-fold increase from 2020, crypto exchanges earned US$24bn from
trading fee revenues in 2021 and overtook earnings from traditional exchanges
Global crypto spot exchanges share of annual trading volume(1) Global revenues from trading fees(2) in US$ billion
7x
Other 24
4% 1%
2%
2%
3%
4%
Other
14 15
4% 13
9%
3% 5%
49% 4% 8%
11%
22%
3
1
Q3 2020 Total Trading Volume 69%
US$1.6tn
2019 2020 2021
Crypto Exchanges Traditional Exchanges

Q3 2021 Total Trading Volume
US$13.3tn
86 Notes: (1) Bubble size only indicative (2) Also included are clearing fees
Sources: Nomics, Opimas

Coinbase, with its hyped IPO in 2021, achieved strong revenue growth over time
but plunging share prices in 2022 raise question marks for the future
Revenue per segment in US$ million Total verified users vs. monthly transacting users Market Cap development in US$ billion from IPO to
(MTU) in million April 2022
89
-57%
7,838
89.8 ATH(1)
517
484
73.5
+283% 68.4
63.6 65.0 63.7
60.2
52.9 51.0
43 48.1
41.9
32 38.6
6,837
1,277
11
534 45 136
1,096 1 3
51 20
463
2019 2020 2021 2019 2020 2021 16. 14. 30. 13. 10. 16. 13. 18. 15. 12. 14. 16.
Apr May Jun Aug Sep Oct Nov Dec Jan Feb Mar Apr
Transaction Other Subscription and Verified Users MTU
2021
2022202120212021 2022
20212021202120212022202220222022
services
87 Notes: (1) All-time high
Sources: Company information, companiesmarketcap.com, Yahoo Finance

Another revenue stream lies within cryptocurrency mining, which has increased
over the years and yielded a US$71 million payout on a single day in 2021
How does crypto mining work? Total value of block rewards and transaction fees paid to miners every day in
US$ million
Cryptocurrency mining is the method of verifying transactions on a digital ledger
for a blockchain using machines with extensive computing power. Cryptocurrency 90 Total mining
mining can be done by any individual or organization with adequate hardware and revenues in US$ billion
software resources. Mining is essential to keep the Bitcoin network running. 80 15.3 16.5
71
Transactions in the network are verified by miners; as a reward they get newly 68
70
7.3
minted units. Miners compete against each other to solve mathematical tasks.
60 2.4
50
50 2020 2021
1 2
Bitcoin Ethereum
40
Someone initiates a transaction. The transaction request is bundled The block is broadcasted to all
30
into a block with other transactions. mining nodes in the network. 26
20
3 4
20
10
The network of nodes validates The first miner to validate a new The block is added to the 0
the transaction using algorithms. block for the blockchain receives a blockchain and is then permanent 2017 2018 2019 2020 2021
part of the Bitcoin as reward. and cannot be modified.
88
Sources: Blockchain.com, The Block Research, Bitpanda

After the crackdown on cryptocurrency was announced in May 2021, China lost
its position as the dominating force in Bitcoin mining
Global distribution of bitcoin mining hashrate(1)
100%
Other Germany(2)
90%
80% China Malaysia
70% Ireland(2)
60% Canada
50% Russia
40% Kazakhstan
30%
20% United States

10%
0%
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2022
89 Notes: (1) The hash rate measures the total computing power in PoW networks like Bitcoin (2) Ireland and Germany are unlikely to have any major mining operations, figures may be inflated due to VPN and proxy use
Sources: Cambridge Centre for Alternative Finance, BTC.com, Poolin, ViaBTC

Because mining with PoW(1) consensus is very energy intensive, the energy
consumption of cryptocurrencies is at the level of individual countries
Energy consumption by country including Bitcoin and Ether in TWh per year Energy consumption by cryptocurrency including NFT in kWh per transaction
530 1,173.0 Amounts to

460 1219 kg CO2
Comparable to the carbon
footprint of
331 2,702,094 VISA
312 304 290 transactions or
259 203,194 hours of
watching YouTube
340.0
87.2
18.5 0.5 0.1
Brazil France UK Bitcoin Italy Saudi Mexico Bitcoin 1 NFT Ether Litecoin Cardano Dogecoin
+Ether Arabia
90 Notes: (1) Proof-of-Work is the consensus mechanism popularized for permissionless blockchains and cryptocurrencies through the Bitcoin network. PoW miners are incentivized to add more and more computational power to the
network, consuming more and more energy.
Sources: Digiconomist
The recent PoS(1) consensus addresses key challenges of PoW(2): energy
consumption and cybersecurity concerns
What is the difference between crypto mining and staking? How does crypto staking (PoS(2)) work?
Crypto Mining (PoW(1)) Crypto Staking (PoS(2))
Mining capacity is dependent on Validation capacity is dependent on the Owners lock their Algorithm pseudo- The validator node
computational power. stake in the network. native tokens in randomly elects a proposes a block of
staking pools. validator node. transaction.
The first miner receives a block reward There is no block reward here; the
for solving the cryptographic puzzle. validator earns transaction fees.
Validator earns The block is added to Other validators

In order to override the network, In order to override the network, the blockchain and
transaction fees in verify and approve
hackers require more than 51% of the hackers need to own more than 51% of becomes immutable.
native tokens. transactions.
network’s computational power. the native tokens.
91 Notes: (1) Proof of Stake (2) Proof of Work
Sources: Capital.com, Blockgeeks

How blockchain technology
is reimagining the world of
internet, money, and finance
Since the inception of blockchain technology in 2008,
tremendous advancements have led to the implementation of
several novel ideas and features such as smart contracts. The
introduction of smart contracts has unlocked a plethora of
possibilities and given rise to an entire crypto ecosystem. One
such use case of this technology is decentralized finance,
which is disrupting the financial payment, lending, and
investment industry by offering similar services without the
need for intermediaries. Non-fungible tokens are reshaping
the way retail and art is being sold with NFT marketplaces
improving accessibility and reach among consumers. Web 3.0
intends to shift power from big technology corporations into
the hands of users by offering novel services built on core
concepts of decentralization, openness, and better internet
user utility.
92
Newer iterations of blockchain technology boast improved functionality and
promote a more decentralized financial system
Blockchain 1.0 Blockchain 2.0 Blockchain 3.0
The first iteration of blockchain was conceived to solve The range of features of the first generation of Blockchain technology suffers from a fundamental
technical issues associated with trustless payment blockchains was rather limited, eventually leading to drawback: it is not very scalable. If the network
systems, i.e., those without the need for the development of blockchain technology that could handles a lot of transactions, it slows down
intermediaries. It was first introduced for Bitcoin but do more than just process payments. One major significantly, and transaction fees can become
has since been adapted for a wide variety of use cases. innovation defining the second generation of prohibitively high, therefore reducing the practicability
Still, it remains largely connected to cryptocurrencies. blockchains is the smart contract. They are self- of large-scale networks. Many new blockchain projects
First-generation blockchains only have a rudimentary managed contracts that are triggered by an event, such are attempting to solve this scalability issue, but with
set of features and rely on distributed ledger as the receipt of a payment or achievement of a price varying success. The third generation of blockchain
technology. Transactions are bundled in blocks, which goal and operate independently of external entities therefore remains largely theoretical.
are then immutably chained together. and third parties. a
Examples: Bitcoin, Litecoin Examples: Ethereum, NEO Examples: Cardano, Solana
93
Sources: Dmitry Efanov; Ledger; Investopedia

Various forms of blockchains exist for different use cases, but for all of them,
decentralization is a focal point
Different blockchain types and their use cases
Private Blockchain Consortium Blockchain Hybrid Blockchain Public Blockchain

Private blockchains are permissioned Consortium blockchains are semi- Hybrid blockchains are controlled by a Public blockchains are permissionless,
blockchains controlled by a central decentralized, permissioned single organization. In a hybrid system, thus allowing anyone to join the
authority that can decide which ones blockchains controlled by a group of there are public as well as private network and create, access, and
can function as nodes and which organizations, such as trade groups. features that allow the organization or validate blocks of data. As a result, this
permissions each node has. Not all Distributing authority among several participating nodes to keep certain type of blockchain is entirely
nodes need to have the same organizations allows for broader information either public or private, decentralized.
privileges: some are only allowed to oversight of the information on the depending on the requirements of the
validate transactions but are not blockchain and increases the transaction or application.
permitted to initiate them or access the robustness and security of the
information stored on the blockchain. network.
Use cases: B2B transactions, internal Use cases: Banking, supply chain Use cases: Medical records, medical Use cases: Digital transactions (i.e.,
voting, asset ownership, supply chain management, digital identity research, real estate, supply chain cryptocurrencies), smart contracts,
management management document validation
Examples: Ripple, Hyperledger, Corda Example: R3 CargoSmart Example: IBM Food Trust Examples: Bitcoin, Litecoin, Ethereum
94
Sources: Foley.com; SearchCIO; IBM

The most far-reaching forms of new coordination are coming from public
blockchain infrastructures with revolutionary concepts such as Web 3.0
Overview of public blockchain opportunities
Public Blockchain
Infrastructure
Money Revolution Financial Revolution Internet Revolution

Ever since the 2008 financial crisis, blockchain has Blockchain technology companies powered by smart Blockchain technology is also rewriting the
triggered a gradual shift in the monetary landscape contracts are disrupting the way traditional financial fundamentals on how major technology companies
where value transfer from centralized authorities institutions operate by offering similar services that and media conglomerates have been operating by
(central banks/governments) is slowly moving to a surpass these centralized institutions and do not providing novel services built on core concepts of
more decentralized and autonomous system. require intermediaries. decentralization, openness, and greater user utility.
Cryptocurrency DeFi(1) Web 3.0
Fiat Currencies Decentral Global Currencies Centralized Services Decentralized Services Big tech platforms Interoperable web
95 Notes: (1) Decentralized Finance
Sources: ARK Invest

It is anticipated that Web 3.0 will open massive opportunities by shifting its focus
from consumer to financial markets
The developmental stages of the Internet Web 2.0 vs. Web 3.0 revenue opportunities
US$3.8tn US$22.5tn
Consumer Sales Financial Products
Web 3.0 US$347bn US$2.5tn
Blockchain & AI Gig Economy Banking/Access
US$2.5tn
Web 2.0 Contracts/Trade
Payment
Mobile, Social, Web 2.0 Web 3.0
Cloud 1990s- (+Financialization)
2010s 2020s-2030s+
Web 1.0 US$5tn US$420bn US$27T
Desktop Video/Music/
Games
Hardware
Economy
US$258bn
US$181bn
Asset
Social Networks
Management
US$183bn US$50.5bn
Search Regtech/Identity
1970 1980 1990 2000 2010 2020 2030 2040
96
Sources: Statista Digital Market Outlook 2022, Coin IX, XBTO

The term DeFi(1) encompasses initial applications for financial services in the
Web 3.0 universe that provide permissionless and transparent solutions
Differences between Centralized Finance (CeFi) and Decentralized Finance (DeFi)
CeFi(2) DeFi(1) CeFi(2) DeFi(1)

Organization Companies DAO(3)
Stock exchanges Digital Exchanges
Custody Regulated Custodians Self-Custody
DeFi Lending/
Banks Technology Proprietary Software Open Source on PB(4)
Borrowing
Security Liability umbrella Ownership & DYOR(5)
Classic Issuers DeFi Token Issuers
Management Management decision Community decision
DeFi Asset
Portfolio Manager Regulation Regulated and supervised Unregulated (so far)
Manager
Direct Fiat connection Yes No
Insurance DeFi Insurance
Human manipulation Yes No
Automation <100% 100%
! Similar surface functions… …but very different in the background
97 Notes: (1) Decentralized Finance (2) Centralized Finance (3) Decentralized Autonomous Organization (4) Public Blockchain (5) Do-your-own-research
Sources: PwC, DeFi Llama

Within DeFi(1), DAOs(2) replace centralized corporate structures via smart
contracts executed by decentralized, autonomously run communities
DAO(2) comparison to traditional company Top 20 DAO(2) Tokens(3) by market capitalization in US$ billion in April 2022(4)
Traditional Corporations DAOs(2) ApeCoin 6.2

5.6
Ownership Permissioned Permissionless 2.2
1.6
Curve DAO Token 1.1
Governance Costly Frictionless 1.0
Kyber Network Crystal 0.9
0.8
Accounting Opaque Transparent 0.8
0.7
0.7
Discourse Private Public 0.6
0.4
0.4
Ethereum Name Service 0.4
0.3
▪ Decentralized crypto exchange founded in 2019 Nervos Network 0.3
▪ 60% of genesis supply allocated to early community members
▪ US$5.6 billion in UNI token market cap
Rari Governance Token 0.2
▪ >US$ 884 billion in trade volume inSure DeFi 0.2
▪ >250,000 unique addresses 0.2
98 Notes: (1) Decentralized Finance (2) Decentralized Autonomous Organization (3) Not all DAOs are financed via tokens. Some simply operate as investment funds. However, when a DAO does issue its own DAO token, these tokens
work to both supply funding for the organization and provide voting rights for token holders. Each token holder can vote on certain issues and are granted influence based on the quantity of their holdings. (4) 29.04.2022
Sources: ARK Invest, CoinMarketCap
With over US$200 billion in value, a significant amount of money is already being
moved within DeFi(1) applications
Global TVL(2) across multiple DeFi(1) blockchains in US$ bn Global TVL(2) per segment across DeFi(1) blockchains in US$ bn in March 2022
250 249 Dexes(3) 70.37
Lending 54.81
Bridge 33.78
228 Yield 22.97
200 CDP 22.86
Liquid staking 21.98
165 7.83
Algo-Stables
Yield aggregator 6.93
150 Services 6.19
127 Derivatives 3.81
Insurance 1.29
Staking 1.28
100 Payments 1.26
Cross chain 1.26
Options 1.10
Synthetics 0.97
50
Indexes 0.86
18 Reserve currency 0.84
Privacy 0.59
0 Launchpad 0.07
Dec Jun Dec Jun Dec Mar Farm 0.02
NFT marketplace 0.02
2019 2020 2020 2021 2021 30, Gaming 0.02
2022
99 Notes: (1) Decentralized Finance (2) Total value locked represents the dollar value of all tokens locked in the smart contract of a given DeFi protocol (is widely used as growth tracker in the DeFi ecosystem)
(3) Decentralized exchange (DEX)
Sources: DeFi Llama
Smart contracting platforms such as Ethereum (ETH) are the foundation for
DeFi(1), NFTs(2), Stablecoins, and other connected use cases
Smart contracts as DeFi(1) foundation Examples of Ethereum applications
▪ The backbone of all DeFi(1) protocols and applications is smart contracts (asset Non-Financial Semi-Financial Financial
and settlement layer):
Aggregation layer Aggregator 1 Aggregator 2 Aggregator 3
File Storage Identity & Reputation Sub-Currencies
Application layer With a decentralized storage Systems Token systems can easily be
system, individuals can rent Registration systems are made to represent assets
Technical DeFi(1) such as USD.
Protocol layer Exchange Lending Asset Management … out their hard drives. structured similar to domains.
building blocks
Asset layer Native Fungible tokens: ERC-20 Non-fungible tokens: ERC-721 …
protocol
Settlement layer asset (ETH) (Ethereum) blockchain Wills Financial Derivates
Cloud Computing Instead of a single issuer.
A person’s desire for post-
Users can proof and ask other there is a decentralized
▪ Smart contracts are a collection of code and data that runs on a blockchain. They mortem asset distribution can
users to proof computations. market of speculators.
be reliably documented.
enable the automatic execution of agreements between parties, reduce
counterparty risk, and ensure the trustless exchange (i.e, one without the need
Data Feeds Hedging Contracts
for intermediaries) of value and information. Online Voting Ethereum is held in escrow
Financial contracts are based
Digital assets can be sent to and provides security to both
on differences with
the ICO smart contract.
▪ The Ethereum blockchain is the most significant enabler of smart contract-based decentralized data feeds. contract parties.
services. Unlike Bitcoin, Ethereum contains a scripting language that enables

users to build applications with the Ethereum Virtual Machine (EVM)(3). Decentralized Prediction Markets Saving Wallets
Governance Decentralized prediction Funds can be placed in banks
▪ NFTs are minted through smart contracts that assign and manage their Tokens are automatically sent markets have more and banks can grant or deny
to the user’s wallet. transparent odds. the ability to access funds.
ownership and transferability.
100 Notes: (1) Decentralized Finance (2) Non-fungible Token (3) Ethereum has been nicknamed the global computer, as it allows for the global transfer of data and information
Sources: FT Partners Research, Center for Innovative Finance University of Basel

As DeFi(1), NFTs(2), and Stablecoins went mainstream, the value of Ethereum
soared to new heights at the end of 2021
Ethereum (ETH) price in US$

ATH(5)
NFT sales hit US$25bn 4,427
4,500 and increased 265x
4,000 from 2020
3,280 3,384
3,500
2,890
3,000 2,760
2,500 DeFi
Summer(4) 2,604
2,000 2,182
Crypto Winter
1,386
1,500 ICO(3) Washout Stablecoin
1,067
market cap
1,000
hits
381 456 423
500 314 230 US$100bn
50
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr
2016 2017 2018 2019 2020 2021 2022 28.
101 Notes: (1) Decentralized Finance (2) Non-fungible Token (3) Initial Coin Offering (4) DeFi initiative took off in the summer of 2020, when the COMP token was introduced. By rewarding farmers in COMP, yields could be increased, and
token holders were able to participate in governance. In response to other protocols mimicking DeFi’s concept, users piled into DeFi, token prices soared, and DeFi activity increased strongly. (5) All-time high
Source: ARK Invest, CoinGecko
The Blockchain Hype Cycle shows crypto assets as most advanced whereas
DeFi(1) use cases and NFTs(2) are still in a rather early stage of development
Gartner Hype Cycle for Blockchain 2021 DeFi(1) use cases explained
Stablecoins
NFTs(2) Decentralized Identity
▪ CeDeFi/CeDex(3): A combination of
Layer 2 Solution DeFi(1) traditional centralized financial
Blockchain and IoT
Blockchain Interoperability
Smart Contract Oracle organizations with mature DeFi(1)
SMPC
Decentralized Exchanges
Tokenization applications can create CeDeFi(3)
Zero-Knowledge Proofs
DeFi(1) use cases offerings.
Smart Contracts ▪ Decentralized Exchanges: These offer

Decentralized Web NFT(2)
buying and selling of digital assets
Authenticated
Provenance Crypto assets
without an intermediary organization.
▪ Smart Contract Oracle: Smart

contracts are still restricted by their
CeDeFi/ limited capacities. Oracles are data
CeDex(3)
Cryptocurrencies feeds from external systems that feed
Blockchain Platforms
Decentralized Applications vital information into blockchains.
Blockchain Wallets
Blockchain PaaS
▪ Stablecoins: To overcome issues of
Consensus Mechanism
Peak of volatility, their prices are pegged to a
Innovation Trigger inflated Trough of Disillusionment Slope of Enlightenment Plateau of Productivity
Expectations crypto-currency, fiat money, or to
Plateau will be reached: <2years 2-5years 5-10years commodities.
102 Notes: (1) Decentralized Finance (2) Non-fungible Token (3) Centralized Decentralized Finance; Centralized Decentralized exchange
Sources: Gartner, Chainlink, 101 Blockchains

As DeFi(1) revolutionizes the internet-based financial system, NFTs(2) disrupt the
world of art, music, and retail
What is a non-fungible token (NFT)? Global NFTs(2) revenue forecast in US$ million
A non-fungible token is a unique, cryptographically secured identifier that

represents ownership of a digital asset, such as art, music, or a collectible on a
blockchain.
Digital Physical 8,184.4
6,857.2
Fungible
+287%(3)
5,451.8
Solana Fiat Currency
4,091.1
Bitcoin Gold
Assets +9,698% 2,813.3
Non-fungible
1,585.8
Cryptokitties
Concert 0.2 0.7 16.2
Real Tickets
Top Shot Estate 2018 2019 2020 2021 2022 2023 2024 2025 2026
103 Notes: (1) Decentralized Finance (2) Non-fungible Token (3) CAGR: Compound Annual Growth Rate / average growth rate per year

The concept of NFTs(1) emerged in 2012, but its breakthrough year came in 2021
with a market value of US$40 billion
Timeline of events leading to the rise of NFTs(1)

Counterparty: This P2P(2) Force of Will: This popular Immense growth in the NFT(1) Breakthrough year for NFTs(1): Jack
financial platform and trading card game, ranked 4th by ecosystem: More than 100+ Dorsey sells his first-ever tweet minted
distributed, open-source number of sales in North projects are launched. NFT(1) as an NFT(1) for US$2 million. A Kings of
Internet protocol was built America, teamed up with marketplaces such as OpenSea Leon album(4) is released as an NFT(1)
on top of the Bitcoin Counterparty to launch their flourish within these newfound and generated over US$2 million. The
blockchain. The platform digital products on the Bitcoin spaces. Nike enters the NFT(1) NFT(1) market surpassed US$40 billion.
allowed the trading of cards blockchain. Rare Pepes memes space by launching CryptoKicks.
and memes. move to the blockchain.
2012/2013 2015 2017 2020 2022

2014 2016 2018/2019 2021
Colored Coins are NFTs(1) go mainstream: Spells of First NFT(1)-based games and NFT(1) market grows Major players ride the NFT(1)
considered the first NFT(1) Genesis (SoG) launches in-game collectibles: The games Decentraland +299%: NFT market is wave: JP Morgan invests in a
that represented a assets on blockchain via and CryptoKitties were introduced to valued at over US$250 virtual lounge in Decentraland;
multitude of real-world Counterparty. SoG was also among the NFT(1) world. CryptoPunks was million. HSBC offers educational finance
assets on the Bitcoin the first to introduce the concept for also introduced in June 2017. games on Sandbox.
blockchain. ICO(3) and used the raised funds to
develop the in-game token
BitCrystals.
104 Notes: (1) Non-fungible Token (2) Peer to Peer (3) Initial Coin Offering (4) When you see yourself
Sources: Medium; Cointelegraph; Decrypt; Reddit

NFTs(1) are tradable decentralized digital assets minted on the blockchain
network
Creating and purchasing an NFT(1)
Asset Preparation Setup & Storage Price & Token Selection Token Minting Tokenization Complete
NFT(1) Creation
Create the digital Set up MetaMask Establish the number of pieces Mint the token Digital asset is
asset that will be wallet to upload and and, price of the NFT(1), including and pay gas converted to
minted as an store asset on the royalties, and choose an fees in native an NFT(1) and
NFT(1). platform. appropriate token standard. token. ready for sale.
Marketplace & Setup NFT Selection NFT Purchases Change Ownership Transaction Complete
NFT(1) Purchase
Choose NFT(1) marketplace Choose the Submit bid if the NFT(1) Pay gas fees for asset NFT(1) is purchased when the price in
to purchase NFT(1) and set NFT(1) of your is up for auction or purchase and corresponding native tokens is
up MetaMask wallet with choice to simply purchase at transfer of withdrawn from the MetaMask wallet
respective native token. purchase. asking price. ownership. and the NFT(1) is transferred into it.
105 Notes: (1) Non-fungible Token
Sources: Stage-ec.nttdata.com
Attractive prices and better customer reach makes NFT(1) marketplaces a new
haven for popular artists
Top-5 most expensive NFTs(1) sold in US$ million(2)
The Merge is a dynamic NFT(1) collectible created by the famous digital

artist Pak. The asset represents a collection of 'masses' that grew large
The Merge 92 based on the value spent by buyers. The final creation was an
amalgamation of all these masses that was sold at US$91.8 million.
The First This compilation of artworks by Beeple was sold for a record-
69 breaking sum of US$69 million during the first-ever digital art auction
5000 Days by the auction house Christie’s.
Clock was created by Pak and Julian Assange to assist with the
controversial WikiLeaks founder's legal fees. Assange has been
Clock 53 imprisoned in the UK for several years, and the Clock is a simple
counter which displays the number of days he has spent in prison.
This is yet another creation by Beeple. Compared to most NFTs(1) that

are exclusively digital, Human One is a hybrid that combines both
Human One 29
physical (polished aluminum, mahogany wood) and digital elements
(four video screens).
CryptoPunk CryptoPunks were introduced in June 2017 when 10,000 randomly

12 generated punks, which accounted to 127,000 ETH(3), were given
#7523 away.
106 Notes: (1) Non-fungible Token (2) 01.05.2022 (3) Ethereum
Sources: ScreenRant
OpenSea is by far the largest peer-to-peer marketplace for NFTs(1) by volume
Top-10 NFT(1) marketplaces by sales volume in US$ million 2021 OpenSea as NFT(1) marketplace example
13,057
BakerySwap 4,464
4,265 ▪ Founded in 2017 as a peer-to-peer marketplace for NFTs(1), rare digital items, and
Marketplace 2,374 crypto collectibles
Magic Eden 860
▪ Offers platform for users to create their own marketplace for NFTs(1)
826
▪ Its API enables developers to search for assets, collections, users, and more
Solanart 647
▪ In addition to the Ethereum-based exchange, OpenSea offers a gas-free
548
exchange based on the polygon protocol with multi-chain support
Foundation 406
Nifty Gateway 349 Key metrics 2021:
Atomic Hub 307
Revenue: US$326 million
Mobox 263
Users: 900,206
122
Digital Eyes Market ARPU: US$363
118
112
107 Notes: (1) Non-fungible Token
Sources: Company information, FT Partners Research, DappRadar

Ethereum facilitates the majority of all NFT(1) sales; however, its average gas
prices(2) have also been rising over the years
Share of all-time NFT(1) sales volume by blockchains Average gas price(2) of Ethereum (Gwei(3))
240 236
220
200 211
April
180
12%
6,
160 157 2022
140
75%
120
6%
100
3% 142
3% 2% 80
67
60 79
40 30 38 36 34 63
29
23 19 22
20 13
Ethereum Solana Polygon 0
Ronin Flow Other Jan Jun Jan Jun Jan Jun Jan Jun Jan Jun Jan Jun Jan
2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 2022
108 Notes: (1) Non-fungible Token (2) Gas refers to the fee, or pricing value, required to successfully conduct a transaction or execute a contract on the Ethereum blockchain platform
(3) Gwei is a small unit of the Ethereum network's Ether (ETH)
Sources: NonFungible; EtherScan.io; Cryptoslam.io
NFTs(1) are gaining significant traction among certain Asian countries such as
Thailand, China, and Vietnam
Top-10 countries by NFT(1) users in 2021 NFTs(1) user penetration rate(2) in 2021
Country Users (millions)
Thailand 5.65
Brazil 4.99
United States 3.81
China Canada
2.68
Vietnam 2.19 Thailand

3.67%
India 1.50
Brazil 8.08%
Canada 1.40 Vietnam Australia
Indonesia 1.25 2.33%
2.24%
Germany 1.23 2.41%
South Africa 1.23

0.03% 8% not data available
109 Notes: (1) Non-fungible Token (2) The Penetration Rate is the share of active paying customers (or accounts) from the total population of the selected market (market segment, region) for each year.

NFT(1) financialization was brought about by advancements in DeFi(2) services and
the convergence of its concepts in the NFT(1) market
The NFT(1) financialization landscape
NFT(1) Lending NFT(1) Rental

P2P(3) Lending: Borrowers and sellers can negotiate loan terms. Collateral-backed Rental: Renters deposit assets as collateral managed by protocol.
Liquidity Pool-based Lending: This lending model enables NFT(1)
holders to put their Wrapped NFT(1) + Custody by Marketplace: Renters pay rent to receive a wrapped
NFTs(1) as collateral in the liquidity pool and take out permissionless loans. Lenders earn NFT(1) whereas lenders lock their NFT(1) into the protocol and receive rent.
fees for providing liquidity. Expirable Dual-Role NFT(1): Renters assume the role of a user and the NFT(1)
DAO-to-DAO(3) Lending: Gaming guilds can lend or lease their assets to emerging guilds. automatically expires when the rental period ends.
FLOOR_DAO NFTIFY PAWNFI JPEG’d DROPS VERA LANDWORKS reNFT
NFT(1) Pricing NFT(1) Fractionalization Aggregators

Machine Learning-based Pricing: Data analysis and machine learning technologies are Indexing: A floor price index is established by Aggregation: Its end goals are
used to derive a value range for any NFT(1) based on its historical trading data. fractionalizing similarly priced NFTs(1) from the same lower gas fees and better prices
collection into fungible tokens. across marketplaces: Genie.xyz
Time-weighted Average Price (TWAP) : JPEG’d has built their customized floor TWAP and Gem.xyz are frontrunners in
for NFTs(1) on Chainlink. Collection: The creation of this product resembles the space.
Peer-to-Peer Pricing: Reward incentives and curated committees are used to directly an index fund and buckets different NFTs(1) into the
appraise NFT(1) values or make market-based valuation predictions. fund.
TAKER UPSHOT NFT20 NFTX HYPERSPACE
110 Notes: (1) Non-fungible Token (2) Decentralized Finance (3) Peer-to-Peer
Sources: Matrixport
Currently, collectibles and art account for nearly 80% of the NFT(1) market value,
but demand for gaming and virtual worlds could rise in the near future
NFT(1) segment share from total sales volume of segments(2)

Jan Jan Jan Dec
2019 2020 2021 2021
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Collectible Game Meta Art
111 Notes: (1) Non-fungible Token (2) Only covering NFTs based on the Ethereum network. DeFi and Utilities were excluded from the original sourced data.
Sources: Nonfungible
Web 3.0, DeFi(1), and NFTs(2) come altogether at the intersectional concept of the
Metaverse: virtual worlds focused on social connection
Intersection of the Metaverse
The Sandbox Roblox Fortnite

Metaverse Virtual Worlds Revenue: ~US$211m (2021) N/A ~US$920m (2020) US$5.1bn (2020)
300 - 500 million Business model: Initial asset offering Subscription+ IAP(3) Subscription + IAP(3) IAP(3)
Users: 30,000 per month (2021) 20,000 per day (2022) 50m per day (2021) ~350m (2021)
active users Devices: VR headset Mobile, PC, console Mobile, PC, console
Web browser
Enablers
Web 3.0 / Virtual
Assets
30 million total NFT
DeFi(1) AR/VR/MR
wallets Installed AR and VR headset base in million
US$40bn in NFT assets 30 million installed
US$50bn in virtual headsets
transactions (fiat 800 million mobile AR 88
NFTs(2)
currency) users 71
US$41bn market 57
(hardware, software,
Smart contracts and advertising)
27
16
Blockchain 2020 2021 2022 2023 2024
112 Notes: (1) Decentralized Finance (2) Non-fungible Token (3) In-App-Purchase
Sources: BCG, Artillery Intelligence, Nonfungible, Company information, Binance research

All blockchain-related activities are growing quickly but are still small and years
away from mass adoption
User numbers of selected metaverse and blockchain connected areas in million Metaverse revenue in US$ billion
3,937.6 394
19
+34% 28
3,218.1
2,981.0 47
2,465.7
121 ~150-300
1,023.4 6
9
16
422.3
250.8 90
4.5 17.5 8.1 34.1 0.1
Video Gaming Meta (Facebook)(1) Digital Assets(2) DeFi(3) Blockchain Metaverse 2021 2025
Gaming (GameFi)(4)
Virtual-asset economy Cloud
2021 2026 AR/VR/MR(1) Network
113 Notes: (1) Only includes Facebook users – own estimation, not to compare with Meta Platforms Inc. self-reported MAUs (2) Including cryptocurrencies and NFTs (3) Decentralized Finance (4) MAUs
Sources: Statista Advertising & Media Outlook 2022, BCG, Artillery IntelligenceWeAreSocial, Greyscale, Nonfungible, PwC, Dune Analytics, Bloomberg Intelligence, Crypto.com, IDC, Two Circles, Gartner, DappRadar
CHAPTER 3
Gaming and the Metaverse:

Will the evolution of gaming give
rise to a new digital economy?
Originally released December 2022 (as Chapter 5)
Table of contents
Gaming and the Metaverse:

Will the evolution of gaming give rise to a new digital economy?
Gaming isn’t only for nerds anymore – with full speed towards a
mainstream audience 116
AR & VR spawned a game revolution and forged a path to the Metaverse 139
Will the Metaverse change the way humans interact in both the
physical & digital worlds? 147
115
Gaming isn’t only for nerds
anymore – with full speed
towards a mainstream
audience
Thanks to gaming’s significant role in culture, entertainment,
and technological growth, the gaming industry is one of the
most interesting media sectors. In the next few years, it will
become the highest-grossing media segment, overtaking TV
and digital video. Even today, gamers outnumber the number
of inhabitants in Europe and Africa combined. It is no longer a
niche. Gaming progressed from the arcade boom to home
consoles and PCs to online and mobile and is now becoming a
new kind of immersive social gaming experience. This has
been made possible above all by the smartphone and the easy
accessibility of mobile gaming for everyone. As market
potential and consumer demand increase, big tech is
increasingly going full-stack next to incumbents in the sector.
New technologies such as AR&VR are driving the future vision
of total immersive gaming.
116
Gaming is taking the lead over TV and Digital Video and will become the highest-
grossing media segment by 2027
Global media segment revenue development in billion US$ Media category CAGR 2017-2027
2
52
Digital Video +20.7%
155
1 136 AR&VR +20.0%
125
25
1 164 eSports +13.7%
101 477
8 112 Gaming +11.5%
210
83 275 Music +5.1%
121
73 499
335 Books +0.3%
168
TV -0.7%
416 376 386
Newspapers & Magazines -3.0%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
TV Gaming Digital Video Books Music Newspapers & Magazines AR&VR eSports
117 Notes: All categories include advertising revenues, except books
Sources: Statista Advertising & Media Outlook 2022

Gamers outnumber the inhabitants of Europe and Africa combined
Number of users of selected media segments and population numbers of selected regions in millions in 2022
Digital Music
0.75
eSports
1.23 1.25 2.53 3.04 3.26 4.56 5.41
0.53
Physical Books & eBooks

Games OTT Video
Europe Traditional TV
Africa Asia
118
Sources: Statista Advertising & Media Outlook 2022; UN DESA

Gaming started in the early 80s with the arcade boom and has shifted to social
gaming as mobile gaming continues to increase its reach
Timeline for most prominent gaming developments(1)

2012: 2016: Pokémon Go
Candy Crush was released
introduced in-app
2004: WoW(2)
monetization
subscription-based
2018: Fortnite was
1997: Nokia published game was launched
launched for PC
1991: Nintendo first mobile game Snake and mobile
released Super NES
1985: Nintendo
2020: Cloud-
published
2011: Twitch gaming service
Super Mario
1980: Pac-Man GeForce Now
was launched
was introduced
2006: PS3 was 2020: PS5, Xbox
released Series X and S
1980 1985 1990 1995 2000 2005 2010 2015 2020 2022
Arcade boom The age of home Online gaming Surge of multi-platform Rise of social gaming,
consoles and PCs starts to grow and mobile gaming subscriptions, and
cloud
Console PC Mobile AR & VR Cloud
119 Notes: (1) Size of shapes is not representing the exact total market size (2) World of Warcraft
Sources: Visual Capitalist; Activate Consulting; Company information

Owing to its easy access and high reach, the Mobile Gaming segment
represents nearly 50% of today’s entire Gaming market
Global Gaming revenue by segment in billion US$ and segment share of total market in 2022
Physically Sold Video

Gaming Networks
Games
eSports
Download Games
0.4%
Online Games
1.0% 5.4%
3.4% 7.1%
46.2%
US$
335.7
36.5%
Mobile Games
Networks &
Gaming
eSports
Gaming Advertising
120

COVID-19 boosted revenues in the video games market, whereas the Russia-
Ukraine war only had a minor negative impact
Original and after COVID-19 global Gaming revenue in billion US$ in 2020 Growth rates and markets size before and after Russia-Ukraine war
20 Market size in
17.0 17.4%
21.3 2027: US$285bn
2.8 15 17.3%
0.9 11.7%
1.5 10.7%
11.2% 8.8%
0.2 10 8.2%
18.4 8.5%
5.8% 4.9% 4.6%
War shock 5.7%
US$156bn 5
-2.5%-points
4.8% 4.6%
0
2021 2022 2023 2024 2025 2026 2027
Before war After war
115.9 Even though the market is suffering a decline in growth rates in 2022, the
market is expected to recover quickly and even show higher growth in 2023.
Mobile Games Download Games Covid impact In the long run, the market will bounce back to its normal level, ending up
Online Games Gaming Networks with a market size of US$285 billion in 2027.
121
Sources: Statista Digital Market Outlook 2022; Gamesindustry

The U.S. will have the largest gaming market in 2027, but China will witness the
strongest growth at 59%
Gaming market revenue comparison for top 5 countries in billion US$
U.S. 54.9
+37%
75.4
China 44.0
+59%
70.0
South Korea 39.9

+36%
54.1
Japan 12.0
+44%
17.3
U.K. 6.1
+43%
8.8
2022 2027
122

By 2027, 30% of gaming users will come from China, as roughly 34% come from
Mobile Gaming alone
Gaming market user development in as percent share of total market China and U.S. users by gaming segments in 2022
100% Physical Video
63% 61% 61% ROW(1) Online Games
21% Games
26%
35%
1,420
30% Gaming Networks 1% Download
18%
Games
25% 25% 30% 34%
30% China Mobile Games
20%
Physical Video Games
Online Games
15%
17% 14%
U.S. Gaming Networks
10% 5%
8%
Japan
6% 5%
5% South 30% Download
4% 3% 3% Games
Korea
1% 1% 1% 35%
Mobile Games
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
123 Notes: (1) Rest of world

Overall gaming time in China is higher compared to other countries, as only 8%
of the population plays less than an hour per week
Share from internet users of video gamers in %(1) Average hours spent on gaming per week(2) Distribution of video gamers in the
95 United States in 2022, by age group
China 8% 31% 30% 18% 7% 7% 36%

90
China
85
U.S. Japan 26% 36% 16% 8% 5% 9%
80
South
24%
75 Korea South
28% 36% 18% 9% 5%
U.K. Korea
70
4%
Japan
65
U.K. 13% 34% 24% 13% 7% 7% 13%
12%
60
9%
55 U.S. 12% 34% 24% 13% 8% 9% 6%
50
Less than 1 hour 6 to 10 hours 16 to 20 hours
45
1 to 5 hours 11 to 15 hours More than 20 hours <18 18-34 35-44 45-54 55-64 65>
2019 2020 2021 2022
124 Notes: (1) Video game usage by device; Single Pick; US.: n=7608; China: n=4032; South Korea: n=2038; Japan:: n=1032; United Kingdom: n=2533 (2) “In general, how many hours per week do you spend playing video games?”; Single
Pick; same number of respondents
Sources: Statista Global Consumer survey, as of November 2022; Entertainment Software Association 2022
The more you play, the more you pay: Frequent gamers are more likely to spend
money on video games than occasional gamers
Demographics and purchase behavior in the US by gaming intensity(1) US In-app purchases in billion US$ and in-game purchases(2) by device 2022
61% +9%
Frequent gamer 53 56
39% 50
46
41
36
49%
Occasional gamer
51%
Male Female
2021 2022 2023 2024 2025 2026
Frequent gamer 50% 45% 28% 27% 26% 20%

Smartphone Game console PC / laptop
72% 59% 45%

Occasional gamer 33% 24% 14% 16% 13% 40%
Downloads Subscriptions Online games

In-game purchases Games on a data medium (e.g. disc) No Purchase
125 Notes: (1) Based on Hours spent playing video games per week; Single-pick; U.S.: n=8,397 (2) “Have you spent money on video games in the past 12 months?”; Multi Pick; U.S.: n= 8,397
Sources: Statista Global Consumer survey, as of November 2022

The gaming industry is mainly divided into game developers and community-
centric services, which cater to the needs and wants of consumers
Key players in the gaming industry
Game Engines Developers & Publishers Distribution Platforms Game Consoles Hardware & Tech
Broadcasting & Streaming Communication & News Events Esports Leagues Esports Organizations
126

With Call of Duty and PUBG Mobile, first-person shooter games exhibit the
highest revenues across platforms
Highest-earning PC and console(1) games in 2020, worldwide Highest-earning mobile games in 2021, worldwide
First person shooter

Call of Duty
1 Modern Warfare: with around 8 million 1 2 3
US$1.91bn monthly users
Football simulation
FIFA 20: game with almost
2
US$1.08bn 25% of player base
from the U.S. PUBG Mobile: Genshin Impact: Honor of Kings:
US$2.01bn US$1.33bn US$1.64bn
Open world game First-person shooter Role-play game Role-play game with
Grand Theft Auto 5: which is on the
3 with a total of 961 where 36% of in-app 99% of users and
US$0.89bn market since 2013 million downloads revenues come revenue from China
from China
127 Notes: (1) Includes PlayStation, Xbox and Nintendo Switch
Sources: Business of Apps; MovieMaker; AppMagic; PlayerCounter; ActivePlayer

Game studio juggernauts adapt to the freemium business model to capture a
wider user base and increase their potential margins
Popular game developers by revenue in billion US$ Activision Blizzard diversifies its business model Activision Blizzard quarterly revenue in billion US$
With the release of Call of Duty Warzone (the first free-

to-play add-on) in March 2020, Activision Blizzard Positive YOY(2)
8.1 change due to
+9% changed its strategic direction to drive high profitability
8.8 freemium
and top-line growth. In general, video game companies model +22%
observe a seasonal revenue stream generated after
5.6 +52%
+24% game/add-on releases. Two key advantages emerge +41%
7.0 -2% 2,431
with the freemium model:
1,932 1,954 1,986
3.4 1,825 1,788
-27% It introduces scalability to the revenue
2.5 stream of Activision Blizzard and is assisted 1,369 1,282
by the in-game marketplace offering sales
3.1 of customized weapons and characters.
+9%
3.4
2.5 This model greatly increases the potential

-9%
2.3 margins for the business while also
Q1 Q2 Q3 Q4
increasing its user reach to the TAM(1).
2020 2021 2019 2020
128 Notes: (1) Total Addressable Market; (2) Year-over-Year
Sources: Company information; Seeking Alpha

Microsoft’s deal to buy gaming giant Activision Blizzard has been the most
expensive one in the history of gaming development
Biggest acquisitions in the gaming industry in billion US$
> Other notable deals < US$1bn

>
1.2 4.0 12.7 ▪ Pearl Abyss acquired CCP in 2018 for
> > US$448m
>
2.9 10.0 ▪ Zynga acquired Small Giant in 2018
1.3 > for US$738m
> >
> > 1.3 ▪ Macarthur Fortune acquired Jagex in
3.6 2020 for US$542m
7.0 1.1
> ▪ Embracer Group acquired Saber
>
8.7 2.4 Interactive in 2020 for US$537m
> > > Easybrain in 2021 for US$640m and
2.0 4.8 68.7 in 2022 Eidos, Crystal Dynamics and
> Square Enix for US$300m
1.8 1.4
>
2014 2015 2016 2017 2018 2019 2020 2021 2022
129
Sources: Company information; Visual Capitalist; businessfinancing.co.uk; New York Times; Crunchbase
Alongside established players in the gaming industry, big tech is increasingly
taking the full-stack road as market potential and consumer demand grow
Selected gaming incumbents and big tech player’s presence in gaming ecosystem
Game App Subscription Game Cloud AR & VR Virtual

Key player Console
publisher Store Service Video Gaming Device Worlds
Microsoft Roku
Glasses
AT&T Comcast Verizon T-Mobile
Google
Play Pass
Disney NBC Viacom CBS Netflix
Store
Microsoft Walmart Kroger Costco

Store
USAA AARP AAA

Cloud handheld
Cloud
Play
Google Facebook Amazon
130
Sources: Activate Consulting; Company information

Although cloud gaming presents a massive market opportunity for the gaming
industry, big tech companies are struggling to ride this wave
Global SOM(1) in terms of users in millions Cloud gaming revenue forecast in billion US$ Consumer adoption and awareness of cloud
gaming in the U.S.(3)
220.2 8.2 Google

63% 63%
announced
SOM (1) +111%
the shutdown
+51%(2) of Stadia in
464.9
43% Sep. 2022
29%
21% 23%
18%
31.7 11%
Paying 5%
+174% 2.4 3%
users
86.9 PlayStation Amazon Google
Plus
2022 2025 2022 2025 Awareness Usage
131 Notes: (1) SOM: Serviceable Obtainable Market represents the number of people whose internet connection meets cloud gaming’s minimum requirements; cloud gaming services are available and interested in using them
(2) CAGR: Compound Annual Growth Rate / average growth rate per year (3) 1.244 U.S. adults (18-64 y/o) surveyed Mar-Jul 2022. Usage refers to past 12 months.
Sources: Newzoo; Statista Global Consumer Survey 2022; Company information
Major tech companies have developed their own cloud gaming and subscription
services to compete for multiplayer and cross-platform gamers
Timeline for most prominent subscription services initiatives in gaming
2014 2016/2017 2020 2022

2015 2019 2021 Future
From 2014 to 2017, gaming subscription In 2019, as technology progressed, business

Towards the end of 2022, user momentum
services provided downloaded content for a models shifted to cloud gaming. mobile gaming
slowed. Google announced they would be
monthly fee. With the advent of console gaming, companies joined the race for demand,
ceasing operations of Stadia. New entrants are
companies took advantage of having users accelerating the growth of multiplayer and
struggling to fight against established players.
already on the platform. cross-platform gaming.
132

The integration of in-game social activities is paving a new path for the future of
the gaming industry
Video games are creating virtual shared spaces to Examples of human interactions in virtual worlds Motivation among gamers to start a new game
facilitate social interactions Music TV & Video
Good reviews 39%

Banking Music
The Gathering tech Black Mirror: Bandersnatch Friends play 31%

conference hosted its first live introduced an interactive
concert in Minecraft in 2016 fiction game episode in 2018 Latest release
In-game 22%
Dating of a series
Social
Favorite streamer
20%
plays
eSports Lifestyle
digital engagement Favorite studio 14%
Shopping Messaging
Kids play 12%

The annual eSports world Age of Wushu introduced in-
Learning competition, the International game marriages in 2021 Parents/siblings

eSports 8%
Dota 2 Championships, plays
started in 2011
133 Notes: (1) What motivates you to start a new game? (multi-pick); 1.035 U.S. adults (18-64 y/o) surveyed Aug 2022. Usage refers to past 12 months
Sources: Company information; Activate Consulting; Statista Global Consumer survey, as of November 2022
Communication platforms built to support the gaming community are now
turning into social hubs for young people
Discord market size development Discord’s business model Preference of social media platforms among U.S.
teens
300 Discord declared revenues of US$131 million in 2020,
45%
which was three times more than the previous year.
41%
However, this revenue wasn’t from ads; instead, the
platform generated revenue from other sources such 36%
as: 31%
35%
• Subscription packages & server boosting: Priced at 26% 30%
140 31%
US$9.99/month to US$99.99/year, Nitro users enjoy
100 custom emojis & tags, an animated avatar, two 24%
server boosts, and go-live streaming. 13%
56
45 130 • Distribution feeds from game stores: Discord 9%
receives a 10% commission from titles that game 4% 5%
10 6% 6%
30 45 8% 4%
10 developers sell through verified servers on Discord. 3%
5 2% 2% 2%
2016 2017 2018 2019 2020 2021 • Ticket sales for virtual events: In 2021, Discord S 2018 S 2019 S 2020 S 2021
piloted a new feature that allowed users to sell
Annual monthly active users (in millions) Snapchat Instagram Twitter
tickets for virtual audio events, where other users
Revenue (in million US$) could purchase tickets to join in as listeners. TikTok Discord Facebook
134 Notes: (1) S 2018: Spring 2018, S 2019: Spring 2019, S 2020: Spring 2020, S 2021: Spring 2021; Data is from April 2021 Piper Sandler report titled “Taking Stock With Teens” in partnership with DECA. 7,000 U.S. teens ages 13-19 were
surveyed online during Feb 19- March 24, 2021
Sources: Business of Apps; CB Insights; eMarketer; Piper Sandler
Twitch has established itself as the go-to platform for video game livestreaming
& eSports broadcasts
Twitch: video streaming platform Twitch market size development Video streaming quarterly hours watched in billions
built for gaming and viewing
eSports competitions 9
3,000 9 6.5
6.3
Twitch, an American video live- 8 5.8 5.7
streaming service with an emphasis 2,500 7 5.4
7 5.1
on video game live streaming, also 4.7
includes broadcasts of eSports 2,000 6
competitions. Additionally, it offers 5
music broadcasts, creative content, 1,500 3.1
4 2,675 4 2.8 2.8 2.8 2.7
3
and livestreams. It is a subsidiary of
Amazon. 1,000 1,890 3
2 2 1.9 1.4 1.3 1.3
2 1.7 1.2
1,230 1.5
500 0.7 0.7 0.7
880 1.0 1.1 0.9 1.1
1 0.2 0.8 0.8
0.5 0.6 1.2 1.1 1.1
275 300 0.2 0.3
0 0
2016 2017 2018 2019 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Twitch annual monthly streamers (million) 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021
Revenue (million US$) Twitch YouTube Gaming Facebook Gaming
135
Sources: Business of Apps; Techcrunch; Company information

The world of eSports can mainly be divided in 5 components, whereas YouTube
and Twitch are the most prominent platforms to view eSports
Overview of the eSports world

Events such as Publishers merge and enter
Channels
championships and other the professional gaming
tournaments pay out market with their games,
massive prize money for Events Publishers e.g., Activision Blizzard (Call
teams, e.g., ESL One and of Duty) and Riot Games
World Championship (League of Legends)
No longer just about Regular leagues have been

gaming, eSports teams have established to compete
become stock-listed against each other and win
companies with over US$50 Teams Leagues prizes, e.g., ESL and Rocket
million in revenue, e.g., League Championship Series
Cloud9 and FaZe Clan
136
Sources: Newzoo
China has the highest interest in eSports at 87% followed by Brazil with 79%,
and the market is expected to reach a revenue of US$2.2 billion by 2027
Interest in eSports in 2022(1) Global eSports users and revenue in million US$
Brazil 2,235
2,118
79% 21%
1,981
China 1,811
87% 13% 1,624
Germany 1,422
47% 53% 1,210
South Korea 993

885
65% 35% 721
738 665 696
580 626
U.K. 619 524 527
476
45% 55% 369 401
345
U.S.
49% 51%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Yes No Revenue Users
137 Notes: (1) “Are you interested in eSports?”; Single Pick; U.S.: n=1035; China: n=1037; South Korea: n=1137; Germany: n=1045; United Kingdom: n=1031; Brazil: n=1090
Sources: Statista Global Consumer Survey as of November 2022; Statista Advertising & Media Outlook 2022
Rapid advancements in the gaming sector are driving the future of the total
immersive gaming experience
Changing landscape of the gaming industry
Cloud Gaming
Drivers influencing the future of gaming
Technology enablers for next level gaming

Immersive Gaming Experience
eSports Virtual Reality
(VR(1))
Augmented
Mobile Gaming Video games transport the player
into an alternate virtual world
Reality (AR(2))
where techniques are used to make
them feel like the character they're
playing.
Social
Interactions
Drivers Enablers
138 Notes: (1) VR: Virtual Reality; (2) AR: Augmented Reality

AR & VR spawned a game
revolution and forged a
path to the Metaverse
In the past few years, several new technologies have emerged
to enhance the consumer experience. Without a doubt,
augmented and virtual reality set a foundation for future
developments and are a key part of today’s technologies. In
2015, many VR possibilities started becoming widely available
to the general public, and the market has been growing ever
since. More and more developers are working on AR & VR
solutions and headsets are now a significant part of today’s
society. The market is far from reaching its full potential and
will continue its growth path as penetration rates increase.
One key use case is gaming: starting in 2020 with the launch of
the first major VR game, many consumers experienced AR &
VR gaming. A more realistic and interactive gaming experience
has been attracting gamers around the globe. In the future,
technology will develop further and become more accessible
to consumers.
139
New technologies will enhance the gaming experience and will lay down the
foundation for new gaming concepts and other applications
Extended reality use case overview
Virtual Reality (VR) Augmented Reality (AR) Mixed Reality (MR)
Real world with digital information

Completely digital environment Real and the virtual are intertwined
overlay
• Works with a headset device connected to a PC • Smartphones and glasses are predominantly used • Virtual objects are integrated into the natural world
to combine real-world surroundings with digital and viewed through special glasses
• Virtual reality places the user in a completely digital
information
environment • Objects can be responsive and interactive
• The real world remains at the center of AR, but
• This results in a fully enclosed environment and a • Mixed reality interacts with the environment and
digital components enhance the experience
synthetic experience with no sense of the real world alters it at the same time
Gaming
VR enables a greater gaming experience by By enhancing games with AR technology, they Similar features as AR in gaming, overall, it will
having games more realistic and interactive become more complex and immersive path new ways of gaming and beyond
140
Sources: Statista Advertising & Media Outlook 2022; aniwaa

While the primary focus of AR is currently mobile games, the application of VR
centers upon PCs and other consoles such as PlayStations and Xboxes
Augmented Reality (AR) gaming use cases Virtual Reality (VR) gaming use cases
Augmented Reality technology is used to connect the real Virtual Reality technology enables consumers to dive into
world with the digital world, mainly using smartphone the virtual world, not only visually but also interactively and
cameras. However, AR glasses can be used to improve that with sound. For that, headsets or even fully installed
experience. Popular games are Pokémon Go, Jurassic World stations with controllers are needed. Popular games on VR
Alive, and Walking Dead Our World. are Half Life Alyx, Skyrim VR, and Beat Saber.
Pokémon Go Jurassic Walking

World Alive Dead Our
is a location-
World
based game is a similar
where players gaming is a location-
can catch concept as based Half Life Alyx Skyrim VR Beat Saber
Pokémons Pokémon Go, survival
is an ego-shooter game is an open-world game is a musical game by
throughout but with game
that needs an installed that also needs a fully Reality Labs (part of
the world dinosaurs
unit to physically interact installed unit Meta) for PC, PlayStation,
and Oculus Quest
141

The AR & VR market is still emerging and expected to grow further, and Apple
will boost consumers’ demands with new AR glasses in 2023
Global AR & VR revenue development in billion US$(1)
60 US$52.05bn
50 Planned release
Microsoft of Apple’s AR AR
40 HoloLens glasses
Pandemic
caused a huge
30
5G was demand in AR
deployed & VR
20 Google Facebook PlayStation
VR VR
launches AR acquired
10 glasses Oculus
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Development Trough Expansion & Recovery

VR Software VR Hardware VR Advertising AR Software AR Hardware AR Advertising
142 Notes: (1) Market data from 2012 to 2016 are only estimates, 2017 to 2027 are based on Statista Advertising & Media Outlook
Sources: Statista Advertising & Media Outlook 2022; Deloitte

The AR & VR market is split nearly equally between B2B and B2C, whereas the
electronics industry covers almost one third of the market
AR & VR market shares by B2B and B2C in 2022 AR & VR market shares by industry in 2022
Training
Health Care
E-Learning
Gaming
Robotics 2%
Telecommunications 2% 2% 2%
5% 2% Electronics
B2B Advertising
5% 32%
Social Media
5%
45%
Government 5%
B2C 55%
5%
E-Commerce
10% 13%
Service Industry
Manufactoring 11%
Other
143

With over 10 million units sold so far, Meta’s Oculus Quest 2 is dominating the
market and is expected to increase its lead
Top four global companies selling VR headsets
VR product Company Revenue 2021 in Hardware Units sold(1) Platform Price in US$ Market share(2)
US$ revenue in US$
Oculus Quest 2 Meta Platform 117.9bn 5.2bn 10.4m PC 499.99
75%
HTC Vive Pro 2 HTC Corporation 199.5m 2.6bn 3.3m PC 799.99 3%
PlayStation VR Sony 90.4bn 2bn 6.6m PlayStation 299.99

5%
Valve Index Valve Corporation 255m 0.6bn 0.6m PC 999.00

3%
144 Notes: (1) Units sold from 2016 to 2021 (2) Market shares as of 2021 Q1, the four companies cover 85% of the market
Sources: Statista Company DB; Counterpoint, Company information

Big tech companies are within the AR & VR ecosystem in various stages of the
value chain, such as Meta, Microsoft, and Apple
The AR & VR ecosystem overview
Content Education Hardware Incubator
Community Solutions Distribution
145
Sources: Vancouvereconomic; Company information

AR & VR is a fundamental pillar for the future of gaming, especially in the
Metaverse
The essentials of gaming in the Metaverse
AR & VR Use of real-time data
technology allows for helps to create a realistic

motion-controlled gameplay gaming environment
Collectible items 3D worlds
are items with real-world provide gamers with interactive

value, such as Bitcoin and immersive gameplay
The Metaverse is a persistent and immersive simulated world in The Metaverse paves ways not
Immersive AR & VR which consumers can immerse themselves using AR or VR, and it only for gaming but also for
media technology is experienced in the first person by large groups of simultaneous eCommerce, virtual assets,
users who share a strong sense of a shared community education, etc.
146
Sources: Norton
Will the Metaverse change
the way humans interact in
both physical & digital
worlds?
The Metaverse is already part of society’s digital economy,
whether in the form of online games where people can come
together and play or as a social platform to interact with other
users. Its potential across various industries is massive, as
many industries and companies have already invested vast
amounts of money. Nevertheless, it also brings challenges as
there is still uncertainty about the Metaverse and connected
concepts. Solely investing money won’t be enough to generate
a concept that attracts consumers; the Metaverse must also be
accessible and bring new possibilities. Existing trends such as
the normalization/adaptation/establishment of virtual worlds
and spatial software, the democratization of eCommerce, the
rise of authentic social media, and the adoption of blockchain
& remote productivity technologies are accelerating the
realization of the Metaverse. Whether the hype can live up to
expectations remains uncertain but is likely to become clearer
in the next few years.
147
Following the era of mobile and cloud technology, the Metaverse could mark a
new phase
The 4 major eras of computing
IBM launched its first mainframe in Introduced in 1975, the personal Wireless communication enabled The Metaverse could be the fourth
1952, a computer system that computer has inspired new new and easier ways of data era of computing by transforming
revolutionized the IT industry, industries, new companies, and transfer, and cloud technologies physical interactions into virtual
allowing customers to consolidate turned their founders into paved ways to more decentralized worlds while increasing learning
all of their data and applications into millionaires and billionaires storage and computing methods and improving
a single system technologies
Mainframes Personal Mobile and Metaverse

Computing Cloud
... ...
1950s – 1970s 1970s – present mid 2000s - present 2020s – ?
148

The minimum viable Metaverse is the result brought about by the convergence
of emerging digital trends across different sectors
What is the Metaverse? Trends shaping the minimum viable Metaverse
The Metaverse is a term used to

Virtual world and spatial
describe a combination of the VR(1) and software gains popularity
MR(2) worlds, accessed through a
browser, mobile device, or headset, and
allows people to have real-time
interactions and experiences. Democratization of
eCommerce Rise of popular authentic,
The minimum viable Metaverse is a exclusive, and fan-focused
social media
result of the combination of four
converging spheres of work:
Minimum viable Metaverse
• virtual worlds and spatial software
going mainstream
• the democratization of eCommerce(3)

Adoption of remote
• authentic social media productivity,
decentralized and
• adoption of blockchain & remote distributed
productivity technologies technologies
149 Notes: (1) VR: Virtual Reality (2) MR: Mixed Reality (3) Anyone with a credit card and a business idea may create an online store employing low-cost suppliers from around the world
Sources: Tencent's Dreams; Geffen; Forbes; Kurani

Currently, the presence of the Metaverse dominates in gaming-based virtual
worlds where creator-made content allows for monetization
MAU(1) of selected virtual worlds in millions Roblox Four quadrants of virtual world economies
Externalized
250,1
“Mashup Ecosystems” “Sandboxes”
202,0
171,8 Roblox is a platform-like multiplayer game that hosts a

variety of user-made experiences. Creators can earn
royalties for sales of items they create. MUDs(2)
18,0
Closed Open
Fortnite
0,5
0,2
Have been
developed as
0,2
metaverse Fortnite is a 100-player battle royale online game
prototypes “Theme Parks” “Walled Gardens”
featuring developer-made as well as creator-made
0,1 Internalized
environments.
150 Notes (1) MAU: Monthly Active Users; (2) MUDs: Multi-User Dungeon, Dimension or Multi-User Domain; Closed vs. open economies: in an open economy, other creators can contribute to the world’s ecosystem, while in closed
economies, only the original creator can; Externalized vs. internalized economies: in externalized economies, economic activity is possible beyond the platform’s confines
Sources: Company information; ActivePlayer; Jon Radoff
The Metaverse is built on seven foundational layers that are powered by
emerging trends and technologies working across these layers
Seven layers and technologies within the Metaverse

Experience
Experience
Gaming Shopping
Discovery
The Metaverse presents a plethora of three-dimensional
visuals and two-dimensional experiences that we are
currently unable to experience. eSports
Social Curation
Ad Networks
Creator Economy Social
Discovery Creator Economy Spatial Computing

Ranking Commerce Design tools Stores
Inbound (research on the Number of web/content Spatial computing refers to
Spatial Computing
web) and outbound creators increase rapidly technology that combines Workflow
(ads/marketing) discovery with the advancement of VR(1) and AR (2). Virtual Geospatial
systems continue to exist in web applications that do not Reality Mapping
the Metaverse ecology. require technical skills.
Decentralization Assets
Blockchain A.I agent

Decentralize Human Interface Infrastructure
Human Interface
Products built leverage the In this layer, users receive This layer includes
Mobile Wearables
online scalable ecosystem information about their technologies that enable 5G
powered by microservices, surroundings, use maps, devices, keep them
distributed computing, and and have shared AR(2) connected, and deliver Infrastructure
blockchain networks. experiences. content.
151 Notes: (1) VR: Virtual Reality (2) AR: Augmented Reality
Sources: Jon Radoff ; Company information

The Metaverse is projected to become the user-friendly interface that powers
the decentralized Web 3.0 ecosystem
The stages of evolution of the Web Metaverse as new operating system for Web 3.0
Web 3.0 connects

people in community- Web 3.0 will be built on the foundation of
decentralized networks and applications using
owned virtual world blockchain technology, coupled with machine
learning and artificial intelligence (AI) that would help
Web 2.0 connected build more intelligent and adaptive ecosystems
people in online
communities Decentral web Elements of the Metaverse Elements of Web 3.0
Web 1.0 connected

people online Mobile/Social
AR/Metaverse
Media The Metaverse
as new OS can provide a
user interface
Identity Social Immersive that integrates Blockchain/ Artificial
interactions experience complex web
Desktop Browser
decentralized Intelligence
3.0 elements
Streaming Creator networks
Media Economy
Banner Ads Adoption
Digital Twin Economy MR(1)

1990 2000 2010 2020 2030 Cryptocurrencies NFTs(2) DeFi(3)
152 Notes: (1) MR: Mixed Reality (2) NFTs: Non-Fungible Tokens (3) DeFi : Decentralized Finance
Sources: Coin IX; XBTO; Activate analysis; Greyscale

Nearly all big tech players are working on being more vertically integrated into
the Metaverse supply chain to gain long-term competitive advantages
Metaverse supply chain overview Selected big tech players and their stakes in the Metaverse’s supply chain
Data
Closed ecosystem Marketplace
Advertising
Portable machine
Consumers
Digital (raw data) Data layer
Items
Data Ownership
Hardware Fees Speech
(Meta Hardware/ Apple recognition
Oculus HoloLens TenVR Pico
Exported Quest 2) Access Glasses / Google
Digital ID Glasses
Operating Data
Global Reality layer Tokenization Develop- Tool Google Game
OS/ Tech ARKit Game
Digital Operating ment and Software Daydream Engine
Platform framework Engine
Ownership System Presence Operating Android (Restart
(Engine) iOS (Unreal)
Platform System OS the World)
Apps Gaming,
Application Gaming
Market- Social Gaming, Gaming,
Develop- (Activision Gaming
place (Horizon Video Social
Application ? Blizzard, (START),
ment Worlds), (Youtube (Reboot
layer Minecraft), Social
Fitness, VR) World)
ecosystem Workplace
Workplace
Appli-
cations NFTs Blockchain
ownership Ownership
tokenized
ecosystem layer Data ownership
Portability
Open ecosystem
153
Sources: Deloitte; Company information; Gennaro Cuofano

Meta‘s strategy to dominate the Metaverse focuses on immersive social worlds
and the purchase of as many VR hardware and software companies as possible
Meta‘s Metaverse strategy overview
Gaming Hardware Advertising

Meta acquired a lot of gaming startups Meta has turned to partnerships and Meta is attracting brands to its
to build out its metaverse content. acquisitions for AR/VR hardware as its metaverse platforms by partnering
• Investment in the Metaverse so far with AR advertising startups and
internal hardware teams struggle with
US$36b building immersive experiences.
challenges such as chip manufacturing
• Meta is taking its social media and BCIs.
platforms and extending them into the
VR space. AR virtual try-on or branded
filters have been incorporated into
Instagram and Facebook.
Acquisitions
• Meta is the leading company in VR
with 15 million Oculus VR headsets
sold since 2020. Meta is pushing VR
experiences in the form of games and
virtual worlds such as their flagship
metaverse app Horizon Worlds.
• Horizon worlds has drawn criticism for
its quality and lack of users Partnerships
• Other building blocks of the
Metaverse vision include Horizon
Home, the virtual living room, and
Horizon Workrooms
154 Notes: Meta has also partnerships established in terms of VR Live Events with ESL, Fox Sports, melody VR, NBA and Tidal and in terms of VR for work with Dropbox, Microsoft, Slack, smartsheet, Spatial, Spike and Zoom
Sources: Company information; CBinsights

Meta’s huge bet on the Metaverse is shown in their Reality Labs program, which
is estimated to cost as much as the Apollo Space Program
Selected multi-year spending programs compared to Meta‘s Metaverse bet in billion US$
250 253
40
32
23 25
4
Apple Iphone Manhattan Project Tesla Boeing Google "Other Bets" Meta Reality Labs Apollo Programm
(R&D spend 2004-2007) (Atomic Bomb) (capital burn before (787 Dreamliner (last 10 years) (~US$25bn per (1960-1973)
FCF profitability) Program) year / 10 years)(1)
155 Notes: (1) Reality Labs is Meta‘s XR division (extended reality). Meta has only been sharing its Reality Labs revenue and operating cost figures since Q4 2020.
Sources: Bloomberg; Company information

Apple does not seek to build its own Metaverse, but with its strategy to improve
AR technology, it may become Meta’s biggest rival
Apple‘s metaverse strategy overview
AR & VR
So far Apple invested in smaller companies with AR & VR background to increase
their patent portfolio, setting the foundation for its future AR products.
• Apple started experimenting with AR & VR applications over a
decade ago, as shown by its patent activity. In 2017, Apple
launched its ARKit framework, which enabled developers to build Camerai
AR applications (so far used by 14,000 apps with over 13 million
total downloads).
• It appears that Apple is planning the launch of AR glasses and/or Acquisitions
a mixed reality headset in 2023. Moreover, they are working on a
finger-mounted input system for iPhones alongside new sensors
for iPhone Pros.
• Unlike Meta, Apple has not been clear about its Metaverse
ambitions, but its continued investment in AR & VR companies
points to more immersive digital environments and hardware
•
that may be released soon.
Mark Zuckerberg stated that Apple and Meta are in a “very deep,
?
philosophical competition” to build the metaverse, competing to Partnerships
determine “what direction the internet should go in.” Since the
introduction of Apple’s App Tracking Transparency (ATT) in 2021,
the company’s rivalry with Meta has escalated.
156
Sources: Company information; Cbinsights; The Verge

Big tech and gaming players will expand their competencies across several
elements of the Metaverse
Selected key players presence in Metaverse ecosystem
Immersive Mixed Reality Mixed Reality Social Creation & Virtual

Key player Identity Digital Twins
experiences VR AR Interaction Agency Ownership
View in IoT NFT appli-
your room Microsoft Roku
TwinMaker cations
Glasses ? iMessage Reality Memoji AT&T Comcast Verizon T-MobileNFT Trading

ARKit Composer Cards ?
VR VR
Project Starline Chrome AvatarsDisney NBC Viacom
Supply Chain CBS Netflix
Google Earth VR Twin and Pulse
NFT Sharing on
2 Spark 3D Avatars Instagram/
Pro
Facebook
NFTs
Mesh Mesh HP Reverb G2 Mesh Mesh Mesh Avatars Digital Twins Windows 11
Guardian
Creation
Super QQ Testing NFT
Show USAA AARP AAA Profiles
NFT Games via

Creative Epic Games
Avatars
Google Facebook Amazon Store
157

The Metaverse is facing immense potential in the future, with eCommerce and
Virtual Assets are expected to witness the highest growth rates
Metaverse market development for selected segments in billion US$(1) Relative use case potential for consumers(4)
4,341
1,085
4
25
64 4
176
191
3 eCommerce Virtual Assets Advertising
2 249
335
6 9
60 Live
3 76 26 369 Gaming AR & VR
39 Entertainment
0 114 44
16 10
2022 2027 2030 2030 TAM(2)
Health and
Other(3) Health and fitness Digital Media (Video) Video Education
Fitness
Virtual Assets Education Live entertainment
eCommerce AR & VR Hardware TAM
High Middle Low
Gaming Advertising
158 Notes: (1) Segment market development and TAM(2) Scenario for 2030 corresponds to 10% of the Digital Economy shifting to the Metaverse with 25% TAM (2) realization – see next slide Scenario 1 (2) Total addressable market
(3) The other segment includes segments, such as healthcare, real estate, workplace or public sector (4) Potential applications and uses as well as the degree of investment from large technology companies, venture capital, and corporations and brands
Sources: Statista Digital Market Outlook 2022; McKinsey
Metaverse market opportunities vary wildly, from incremental change to
dramatic shifts in industry structures in transition from Web 2.0 to 3.0
Scenario analysis of potential Metaverse market opportunity in billion US$ in 2030(1)
Scenario 1 Scenario 2 Scenario 3

Digital Economy
+42% 10% of Digital Economy shifting to 20% of Digital Economy shifting to 30% of Digital Economy shifting to
=
Potential Metaverse with 25% of Metaverse TAM(2) Metaverse with 35% of Metaverse TAM(2) Metaverse with 45% of Metaverse TAM(2)
Metaverse TAM(2) realization realization realization
144,700
30%
101,600 of
GDP
43,410 43,410 43,410 43,410
4,341 8,682
10%
20%
13,023
12% 30%
+249% of
GDP
39,069 45%
12,453 34,728 35% 30,387 13,023
25%
8,682 4,558
4,341 3,039
1,085 5,643 8,465
3,256
GDP Digital Economy
Digital Economy non-Metaverse related Untaped Metaverse TAM potential
2022 2030 Digital Economy shift to Metaverse Metaverse TAM realization
159 Notes: (1) Scenario analysis is based on own assumptions (2) Total addressable market
Sources: Statista Digital Market Outlook 2022; Goldman Sachs; IMF; UN

Compared to other digital segments, Metaverse users are expected to have the
highest growth reaching over 1.7 billion users by 2027
User numbers of selected metaverse and blockchain connected areas in million
4,000 2022 2027 Definition of Metaverse, Virtual Assets and

Web 3.0 users
3,500
• Metaverse users can be described as
3,000 3,113 Meta users who access VR (1) and MR (2) worlds
2,833 through a browser or headset and are able
2,606
Users in million
2,500 2,465 Video Games to have real-time interactions and

Video Games experiences across distance. However,
2,000 Meta(4) specific headsets are not necessary to
+327% 1,702 Metaverse engage in activities, e.g., Fortnite players.
1,500
• Virtual Assets users include
Metaverse
1,000 Virtual Assets cryptocurrency and NFT users/owners.
520
413
500 Web 3.0 • Web 3.0 users include virtual assets and
Web 3.0 Virtual Assets
450 DeFi (3) users.
306 301
0
2022 2027
160 Notes: (1) VR: Virtual Reality (2) MR: Mixed Reality (3) DeFI: Decentralized Finance (4) Only includes Facebook users – own estimation, not to compare with Meta Platforms Inc. self-reported MAUs
Sources: Statista Advertising & Media Outlook 2022; Dune Analytics, Cointelegraph
A diverse ecosystem of companies is involved in and could benefit from
developments in the Metaverse
Metaverse ecosystem overview
Games & Virtual Spaces Digital Property & NFTs
Developers & Publishers Crypto & Payments

Metaverse
Ecosystem
Media eCommerce
Communication & Computing Social & Messaging

AR & VR
161 Notes: Not exhaustive
Sources: Activate Consulting

While some industries are leading the proliferation of strategies for the
Metaverse, others are falling behind
Metaverse adoption in relation to Metaverse investments Top 10 business sectors that have invested in the Metaverse
20
Energy and resources Leading
Computer and IT 17%
High tech
on average as share of digital budget
Automotive, machinery, and assembly

Future Metaverse investment
15 Tourism Media and entertainment Education 12%

Consumer, AF&L, and retail Insurance and financial sector
Finance 11%
Healthcare and public sector
Marketing &
(3-5 years)
10 Professional services 10%

Transport and logistics Advertising
Telecommunications
Medical & Health 9%
Construction
Technology and
5 7%
Innovation
Travel & Hospitality 6%
Falling behind
0 Construction 5%
0 10 20 30 40 50 60 70 80 90 100
Transport 5%
Current Metaverse Adoption
% of companies within an industry that have Customer Service 4%
launched Metaverse initiatives
162
Sources: McKinsey & Company Senior Executive Survey, April 2022; Sortlist
The education industry can benefit from each aspect of the Metaverse
Augmentation
Augmented Reality Lifelogging

Interface
AR can enable the viewing of 3D models and & By focusing on data from one’s daily life and
facilitates the understanding and application Network thoughts with productive results, lifelogging
of concepts more so than texts alone. can help personalize the virtual classroom
space to enable the learner to be successful.
Sensors Identity
External
Intimate
& &
Every- Inter-
ware action
Mirror World Virtual World
A mirror world can help to break down Models Engaging in training activities such as
physical barriers to learning and education. & firefighting or pilot training in the real world
Immer-
By using an online video conferencing tool can be risky. The virtual world can be a
sion
one can show a depiction of real-world suitable medium to train by mimicking the
online classroom mirrors. conditions of real-life situations.
Simulation
163
Sources: MDPI; Statista Advertising & Media Outlook 2022

Educational institutions will only need the wearable device in order to enter the
Metaverse for an immersive learning experience
The Metaverse in educational structures Global online education market development in the Metaverse in billion US$
The Metaverse 296.2
Intelligent NPCs Learning Logging

Enter
Learning Scene Learning Analysis

Wearable 146.9 151.4
Learner
Devices
Learning Learning
Resource Authentication
+1,294%
25.2
10.9
Support 1.8
Technological Infrastructure 2022 2030
Communication Computing Analytical Interaction Online Education Metaverse Education TAM

& Networks Technologies Technologies Technologies
Online Education Metaverse
164
Sources: frontiersin; Statista Digital Market Outlook 2022

From skills development to team collaboration, the workplace is also being
revolutionized by the potential of the Metaverse
Companies providing workplace solutions in the Metaverse

Hirect conducted a successful job fair in the Metaverse. Attendees were able to
HR Hiring and
Onboarding create their own avatars and joined via VR headsets. The advantage for recruiters
is that they can interview and evaluate candidates in real time.
Team Microsoft Mesh uses avatars to create a sense of presence in the virtual
Collaboration workspace. Here, coworkers can gather and attend meetings using Mesh for
Teams.
With Pixelmax, companies can build anything, use in-build data capture and
Digital Twins analytics to pinpoint potential problems as soon as possible, and take action
quickly.
Skills The medical technology company Medivis uses HoloLens technology to train
Development medical students through interaction with 3-D anatomy models.
165
Sources: Company information; Statista Advertising & Media Outlook 2022

From museums to sports betting, the entertainment industry holds real promise
for the Metaverse, and many developments have already taken place
Recent developments of entertainment companies in the Metaverse Entertainment in market

development of the Metaverse in
Concerts Museums million $US 2.822
The Sandbox, a decentralized
Musee Dezentral is the world’s
virtual world, entered a
first decentralized NFT
partnership with Warner Music
museum, housing 222 NFT +93%
Group in January to create a
frames that are unique and
music-themed world within 1.464
provable random collectibles.
the Metaverse of the gaming
platform.
Theme Parks
Sports Betting & Gambling 368
244
Entain, Europe’s leading sports Disney’s chief executive 65 90
betting company, plans to revealed that the company
invest US$133 billion into a plans to leverage metaverse 2022 2030
center that creates an capabilities to deliver Entertainment
immersive experience for its personalized entertainment Entertainment Metaverse
customers. experiences.
Metaverse Entertainment TAM
166
Sources: Company information; Statista Advertising & Media Outlook 2022

There is vast development potential within eCommerce: by 2030, it will comprise
more than 50% of the market size of the Metaverse
Market development eCommerce and eCommerce in the Metaverse in bn US$ Metaverse influence on eCommerce
7,830.00
3D assets (NFTs) and virtual try-ons
In conversational commerce, brands
supported by AR and blockchain will
and retailers leverage direct
pave the way to customized on-
messaging platforms to interact on a
demand apparel-making and
personal level with shoppers
products
Brands that integrate Retailer websites that leverage

3,610.00 cryptocurrency options into AI technology can provide
their eCommerce platforms individualized
can enable faster payments recommendations to
with a broader (global) customers based on their
customer reach shopping profiles
1,144.39
In headless commerce, brands As brands seek ways to improve
97.78 190.73 +1,070% optimize their approaches for customer engagement, virtual stores
16.27
reaching customers by maximizing in the Metaverse present a unique
2022 2030 the number of interfaces such as opportunity for retailers to provide
smartphones, smart speakers, apps, their shoppers with immersive
eCommerce eCommerce Metaverse Metaverse eCommerce TAM and social media experiences
167 Notes: (1) Total addressable market
Sources: Statista Digital Market Outlook 2022; Digital Economy Compass Chapter 2 2022; McKinsey
Fashion brands are entering the Metaverse through established virtual worlds
and introducing their digital collections as NFT(1) assets
Opportunities for fashion brands in the Metaverse

Luxury Fashion Brands in the Metaverse
The Metaverse opens many opportunities for fashion brands

to widen their audience. The most natural entry point is
providing digital clothing for the user’s avatar. In 2021,
Roblox introduced its users to digital clothing and
accessories by Gucci and Stella McCartney. In March 2022,
Decentraland hosted a Metaverse Fashion Week featuring
more than 60 brands including Estée Lauder, Tommy Hilfiger,
Dolce & Gabbana, and Forever 21.
Fashion brands can opt to sell their digital items as NFTs or

non-fungible tokens. This NFT approach caught the industry’s Popular Fashion Brands in the Metaverse
attention in 2021 when RTFKT studios, a purely digital shoe
company, sold out their collection of 600 artistic NFT sneakers
in just 6 minutes, garnering a profit of $3.1 million. By the end
of 2021, Nike had acquired RTFKT studios.
Many fashion companies are starting to use 3D garment

creation software such as Clo3D and Browzwear to
realistically simulate garments and speed up physical
production. It is a natural and practical step to convert these
3D designs into sellable digital clothing.
168 Notes: (1) NFT : Non-Fungible Tokens
Sources: Statista Digital Market Outlook 2022, Sensorium, The Metaverse Insider
Digital fashion brands such as Auroboros are gaining traction and catching the
industry’s attention
Though many traditional fashion brands are expanding into the metaverse, a new generation of digital-first
fashion brands such as Auroboros have also appeared. Unconstrained by the limits of physical fabrics, their
collections express new frontiers of creativity and imagination. Co-founder and creative director Alissa Aulbekova
answered a couple of our questions.
Auroboros was one of the digital fashion brands that really caught the media’s attention in 2021. What
made you decide to start a digital-native fashion brand instead of going the more traditional route?
I've been working in digital fashion before there was digital fashion, with 3D scanning and everything else. When
I met our company’s co-founder Paula, we were excited to combine her designs with our digital vision. We're
both fans of video games and we're always looking toward the future, so we've taken it upon ourselves to create
our vision of the future. Digital is also inclusive, whether it is in the gender, size, or shape of the people that wear
our fashion. As you know, AR clothing can adapt to anybody, any of the outfits would fit you perfectly.
How do you see your company influencing fashion in the metaverse?
I think we’ve already influenced the fashion world, both traditional and in the metaverse. As a brand, we have a
very strong identity and recognizable aesthetic. So just as you may recognize a piece of clothing from Chanel or
Balenciaga, you can also recognize our clothes in the digital space. As a luxury fashion house, we have a very
large focus on precision, detail, and craftsmanship, you'll always see something interesting. We also build our
collections very emotively, with a narrative and story that we want to tell. And I think this has brought us great
success already because a lot of people can connect.
What are your upcoming plans for 2023?
We’re launching Auroboros Academy in partnership with top fashion universities like Parsons and Oxford. It’s an
educational-social space hosting a program to provide highly sought-after Web3/Digital expertise and tools for
digital fashion. We are currently in a fundraising phase and open to investors.
169
Sources: Interview with Auroboros

Traditional fashion designers are discovering the creative potential of 3D fashion
and some are even making a complete transition
Anna Liedtke is a fashion designer who worked at Hugo Boss in several traditional roles before
completely switching to 3D fashion. She now works at the Amsterdam-based digital fashion house,
The Fabricant, as Fashion Design Director. We discussed her personal thoughts on digital fashion.
You've worked for a long time in traditional fashion and made the switch to digital fashion
around a year ago. In your experience, what advantages does digital fashion have over
traditional fashion?
For me, as a creative person, I took the chance to explore the opportunities that you have when you
don’t work physically. I was easily able to extend my portfolio with creations I made in my free time. I
started this three years ago. It’s possible to create digital productions and editorial shoots just with
one person. The publishing on social media also helps me to connect and find people to collaborate
with. In general, working with digital software creates a new genre of fashion design, which is fun to
explore and which can bend reality.
What do you think is the best way/strategy for traditional fashion companies to enter into
the metaverse?
There is a new generation of customers who are not necessarily keen on physical products.
Applications and games are already a big market with high revenue content. But companies should
start thinking differently. Giving customers the chance to become part of the revenue stream is a
new way to bond a community. Stop one-directional thinking and build long-term term partnerships
with young people through a “play to earn” system or tokenomics.
Another way is to integrate digital development in production. Digital prototyping is already a
sustainable process that reduces resources. It can support digital showroom set-ups and enables
emotional communication with digital product shoots. Augmented reality integration could attract
customers and reduce the number of returns.
170
Sources: Interview with Anna Liedtke

The Metaverse is set to accelerate the market development of virtual assets in
the future
Types of virtual assets owned as NFTs(1) in the virtual world Virtual assets market size and virtual assets in the Metaverse in billion US$
1.494
Avatar &
249
Virtual lands Social events
Owning virtual real estate as 3D avatars owned as NFTS (1)

NFTs (1) in the metaverse is are being used to interact in
gaining popularity, facilitated the Metaverse. Meanwhile, +9.765%
by players such as Sandbox NFT passes are used to 114
and Decentraland. Virtual Assets access virtual events and
concerts.
Art &
37
In-game collectibles 15
In-game Collectibles 3
are now dropped as Assets like digital art
assets NFTs (1) and owned as & collectibles are
digital assets among now being sold on 2022 2030
players. NFT (1) marketplaces. Virtual Assets Virtual Assets Metaverse TAM Metaverse
171 Notes: (1) NFT: Non-Fungible Token

There is still a lot of uncertainty about the Metaverse because many people are
unfamiliar with the concept and virtual assets have recently been struggling
Knowledge about the Metaverse in top countries(1) NFT(2) sales since January 2021 in billion $US
12.6
47.0% 34.0% 19.0% • Many people still don‘t know exactly what the Metaverse is or
have simply never heard of it
32.0% 34.0% 34.0% • Levels of perception about the Metaverse vary widely and
because the concept is difficult to isolate, people have trouble
58.0% 34.0% 8.0% understanding it
-92.1% • Additionally, NFTs, classified as one of the currencies within the

41.0% 39.0% 20.0% Metaverse, reached an all-time-low in sales in June 2022
• As a result, several applications experienced user losses,

66.0% 29.0% 5.0%
including, Meta‘s Horizon Worlds, which lost 100,000 users in 8
months
67.0% 29.0% 4.0% 1.0
0.7 • Decentraland, one Metaverse application, only has 650 daily
0.1
Know what it is active users, whereas Sandbox has experienced steady user
Jan. 2021 Juni 2022 Jan. 2022 Juni 2022 growth, with 300,000 users in April 2022
Heard of but don’t know what it is
Never heard of
172 Notes: (1) Metaverse: knowledge; Single Pick; U.S.: n=1035; China: n=1037; South Korea: n=1137; Germany: n=1045; United Kingdom: n=1031; Brazil: n=1090 (2) Non-fungible Token (3) Augmented Reality and Virtual Reality
(4) Total addressable market
Sources: Statista Global Consumer Survey, as of 2022; nonfungible; chainanalysis
The next steps for improving the technology in the Metaverse center around
three pillars
Internet of Everything Digital twins Artificial intelligence
The Internet of Everything (IoE) is a concept A digital twin is a dynamic virtual copy of a Artificial intelligence (AI) is the simulation of
that goes beyond the Internet of Things (IoT). physical asset, process, system, or human intelligence processes by machines,
Contrary, it combines not only devices, but environment that looks like and behaves especially computer systems. AI can
also data, processes, and people. However, in identically to its real-world counterpart. A contribute to several aspects of the
order to function properly, it needs data. digital twin ingests data and replicates Metaverse economy, such as user experience,
Communication will be between people using processes to enable the prediction of intelligent networking, and creative
devices, wearables, cameras, and machine potential performance outcomes and issues inspiration.
learning. with the real-world product.
In the future, the Internet of Everything will In the future, digital twins will enable In the future, artificial intelligence in the
allow experts to create digital twins and accessibility to cars, the design of smart Metaverse will contribute to building
lays the foundation for future cities, or medical training. differential and inclusive experiences.
developments.
173
Sources: Robiotic; Unity; towardsdatascience

Digital twins can shift the experience of the Metaverse to a new level and enable
various new use cases
Digital twins market size by industry in billion US$ Digital twins market share in 2025 by industry
6.69 Others
Manufacturing
5.06 5.09 Logistics and Retail 10%
3.83 3.81 8% 23%
2.83
2.26 Healthcare 13%
0.59 0.49 0.43 0.34 0.29 0.28
0.23 17%
13% Automotive
Manu- Automotive Aviation Energy and Healthcare Logistics Others
facturing Utilities and Retail Energy and 17%
Utilities
2020 2025 Aviation
A digital twin is a dynamic virtual copy of a physical asset, process, system, or In the future, digital twins will enable accessibility to products, equipment,
environment that looks like and behaves identically to its real-world counterpart. factories, buildings, cities, and more. Within the Metaverse, real-time 3D will
A digital twin ingests data and replicates processes to enable the prediction of unlock new possibilities by shaping the experience of the Metaverse and taking it
potential performance outcomes and issues with the real-world product. to the next stage. Examples include 3D marketing, 3D eCommerce sales,
designing smart cities, and medical training.
174
Sources: Unity; bisresearch

The question of whether the Metaverse can shape new ways for consumers to
perceive real and virtual worlds is wide open at the moment
Metaverse selected use cases summarized
The Metaverse could The Metaverse could The Metaverse The Metaverse could The Metaverse could
replace physical offices, enhance education as economy could become help planning replace in-person
e.g., Horizon students have more as important as the infrastructure/traffic physical interaction to
Workrooms which is possibilities to learn, real-world economy, solutions in cities to an extent, e.g.,
part of Horizon Worlds e.g., surgeons can e.g., Bitcoin’s average reduce commuting experience concerts or
practice virtually trading volume is time, e.g., using digital gaming
US$24.73 bn. twins
175
Sources: finbold
CHAPTER 4
Cybersecurity: fighting the

formidable foes of the internet
Originally released in November 2022 (as Chapter 4)
Table of contents
Cybersecurity: fighting the formidable foes of the internet
Cyber-resilience: the need of doing the ordinary extraordinarily well

178
Growing cybermarket challenges and unsolved opportunities
are shaping an industry on the rise
192
Modern warfare is moving from land, sea, and air into a new
cyberspace arena
201
177
Cyber-resilience: the need
of doing the ordinary
extraordinarily well
Cybersecurity is becoming increasingly important as
companies, governments, and individuals depend on the
Internet for communication and data storage. This digital
transformation has made security a priority for organizations
of every size. Companies in all industries face increasing
cyberattacks due to their reliance on IT systems, which are
vulnerable to malicious actions. This was especially evident
during the COVID-19 pandemic, when companies rushed to
enable workers to work remotely. Moreover, there are
different types of cyberattacks, and each one requires a
distinct approach to prevent damage to a company and its
operations, revenues and employees. The cybersecurity
market is expected to reach approximately US$262 billion in
revenues by 2027.
178
From an enterprise perspective, six technology trends are crucial, and each
represents a movement from an existing paradigm to a new way of thinking
Overview of trends shaping the future of enterprise technology
Technology trend From… To… Implications

IT Business
Build for immersion and many Bring rich engagement to your

Interaction explosion Mobile app Multiverse of digital interactions
devices customers
Embed machine learning in every Personalize every customer

Connected intelligence Big-data models AI agents
application episode, optimize every process
Mesh data together, leave it Know more and participate in the

Distributed meaning Murky data lakes Open data fabrics
where it is data economy
Compose applications from

Limitless modularity Integrated apps Decoupled components Plan for constant evolution
available resources
Engage the enterprise in building Invest in the stability of your

Cybersecurity arms race Technology protection Resilience and robustness
for resilience business
Engineer with business units and

Perpetual motion Agile DevOps Automated business engineering Expect to change faster
automate
179
Sources: Bain & Company

The increasing reliance on computer systems, the Internet, and wireless
network standards has led to a critical need for cybersecurity
Cybersecurity has grown in importance due to several factors: the internet, an increased reliance on computer systems, the growth of smart devices that constitute the
Internet of Things (IoT), and wireless network standards such as Bluetooth and Wi-Fi. With its combination of politics and technology, cybersecurity has become a major
challenge for governments as well as companies.
• “Melissa” caused US$80 million Cybersecurity

damage industry
EU
The spread of the Vienna • ILOVEYOU infected > 50 million Antiviruses started experienced a
Reaper: The first enforced
virus  The first antivirus computers utilizing Big Data boom due to the
The beginning of Cybersecurity program GDPR
impact of COVID-19
the Internet
1969 1971 1973 1983 1987 1988 1990s 1999 2001 2003 2010 2012 2013 2014 2018 2020 2021
The official birthday

Morris The first national The rise of the
The first computer worm of the Internet. Prior
worm: First cyber security strategy Yahoo‘s data connected device
to this, the various
major attack was issued by the U.S. breaches affected all
computer networks
on the Anti-virus government 3 billion user
could not First weaponized
Internet industry accounts
communicate with malware program
each other explodes
180
Sources: Cybermagazine, GeeksforGeeks, Futureoftech

Cybersecurity challenges come to organizations in many forms but have one
thing in common: the swift exploitation of security gaps
Selected cyberattack categories

DoS & DDoS attack A targeted network resource is made
Malware refers to malicious software that Malware unavailable to its users by
is designed to disrupt or Store
steal data from a Store
temporarily/indefinitely disrupting
computer, network, and/or server. services of host connected to network.
Man in middle An attacker secretly intercepts and
A type of malicious software is Ransomware attack relays messages between two parties
designed to block accessStore
to a computer Store
who believe they are communicating
system until a sum of money is paid directly with each other.
Zero-day exploit A zero-day exploit is a cyberattack
A fraudulent message is sent to trick a Phishing
person into revealing sensitive information
Store
targeting software or systems with a
Store
to the attacker or to deploy malicious
previously unknown vulnerability
software on the victim's infrastructure DNS tunneling DNS tunneling exploits the DNS
A web security vulnerability that allows SQL injection
Store
protocol to tunnel malware and other
data through a client-server model
an attacker to interfere with
Storethe queries
that an application makes to its database Cryptojacking A criminal secretly uses a victim's
Storepower to generate
computing
The attacker aims to execute malicious XSS attacks cryptocurrency.
scripts into websites and web applications
Store Social engineering An attacker uses human interaction
for the purpose of running on an end
user's device (socialStore
skills) to obtain information
about company or computer systems
181
Sources: Rapid7, proofpoint, Wallarm

Not only are organizations at risk for cyberattacks, but cybercriminals can use
any internet-connected device as a weapon
Selected facts about cybersecurity
58% of adults are more worried 78% of consumers are concerned 22% of consumers have detected 53% of people distrust IoT devices
than ever about being a victim of about data privacy malware on an internet-connected to protect their privacy and handle
cybercrime device their information
70% of online fraud is accomplished 83% of organizations that have Social engineering is the most Phishing was reported to the FBI
through mobile platforms has more than one data breach successful means to a data breach more than any other internet
crime in 2021
182
Sources: IBM, Comparitech

The losses to cyber crime increased significantly, a development which can be
connected to the great financial losses in 2021
Global financial cybercrime losses in million US$ in 2021
Business Email Compromise(1) 2,396
Investment 1,456
Confidence/Romance Fraud 956
Personal Data Breach 517
Real Estate/Rental 350
Tech Support 348
Non-Payment/Non-Delivery 337
Credit Card Fraud 173
Corporate Data Breach 152
Government Impersonation 143
183 Notes: (1) Includes individual email account compromise Worldwide figures (59% of victims located in U.S.)
Sources: FBI Internet Crime Report 2021

Major data breaches have continued to increase in severity over the past few
years
Selected data breaches with amount of records affected in million

885 900
Records affected (in Millions)
600
500 538 533
440
250 268 220 200
143 100 106 126
85 57 50 38
9 8 12 12
2016 2017 2018 2019 2020 2021
Pass Pass
Driver’s Driver’s
Email Contact Passport Passport Contact Payment Contact Contact Contact
Compromised
License License
Information
Interests Login Contact Contact Contact
Driver’s Personal Passwords Email

Passwords Personal Personal Personal Payment Personal Passwords Payment Payment Email Personal Email Login Personal
License
Personal Linked Linked

Personal Email
Networks Networks
Username Name SSN Travel Travel Personal SSN SSN SSN Personal Personal SSN
184
Sources: Momentum Cyber 2022, Sophos, Company information

As the scope of cyberattacks and their potential to create havoc has increased,
the effort required to execute them has dropped sharply
Cyberattack complexity compared to cost of attack execution over time

High Password Double extortion ransomware
Supply chain spraying E-skimming Voice phishing
Cross-site scripting
Web app/database
“Stealth”/advanced
scanning techniques Remote control Deepfake videos
AI/ML augmented
Denial of attacks
service 3G/GSM attacks
Staging Industrial control safety system
Packet spoofing attacks
Distributed attack tools Cryptomining
Sniffers
Sweepers GUI World wide web attacks
Feint (diversion) attacks
Backdoors Network management diagnostics Ransomware
Disabling audits
Hijacking sessions Web app/database
Password cracking
Critical infrastructure attacks
Exploiting known vulnerabilities
Burglaries
Self-replicating code
Low Password guessing
1980 1990 2000 2010 2020
Cost to execute attack Complexity of attack
185
Sources: BCG
The COVID-19 pandemic accelerated global cybersecurity spending and
compelled many organizations to prioritize cybersecurity
COVID-19 impact on global IT vendor spending in 2020
Cybersecurity 84% 13% 3%
Hybrid or multicloud 74% 19% 7%
Automation 66% 22% 13%
AI 59% 26% 15%
5G 49% 41% 10%
IoT(2) 43% 41% 16%
AR/VR(3) 38% 40% 22%
Blockchain 27% 49% 24%
Increase Stay the same Decrease
186 Notes: Survey question: „How do you expect COVID-19 to impact your spending for any of the following?” 631 respondents; 18 years and older; Representatives from major enterprises; Online survey
Sources: HFS Research

The post-pandemic cybersecurity market rebounded significantly and set sail for
growth
Global cybersecurity market revenue development
After an initial
shock from the
pandemic, the
Revenue cybersecurity market Growth rate
bounced back and is
300 predicted to reach 14% 16
another peak due to 262
12% 14
250 the Russia-Ukraine 12% 237
war in 2022 11% 213 12
192
200 173 10
156
150 139 8
115 122
103 6
100 83 90
6% 4
50
2
0 0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Revenue (in billion USD) Growth rate (in percent)
187
Sources: Statista Technology Market Outlook 2022

The general increase of cyberattacks, long-term impacts of COVID-19 and the
introduction of new technologies are driving the Cybersecurity market
Global Cybersecurity revenue forecast in billion US$(1)

12.4% Growth Weakening
factors factors
14.2% 156
new
3
139 forecast +5.6% -4.9%
+5.7%
November
122 2022
115
+4.5% -1.5%
+3.8% 12.4%
9.9% 153 (1)
+2.6%
old forecast +2.3%
Penetration COVID-19 General Russia- Development Inflation(4) Cybersecurity Total
rate digital and WFH(2) increase of Ukraine digital workforce
business Cyberattacks war and technologies(3) shortage
models connected
impacts
2019 2020 2021 2022e 2023
188 Notes: (1) Old forecast as of February 2022 (not published in the Technology Market Outlook) (2) Work from home (3) The emergence of new technologies such as Cloud, Artificial Intelligence (AI)/ Machine Learning, Zero-trust
Architecture, Internet of Things (IoT), Big Data and others are driving the market. (4) SMEs may have to cut corners or scale back on their cybersecurity budget.
Due to the activity of various hacker groups and information thieves, China faced
high cybercrime activity in 2021 and lost an estimated US$574 billion
Global cyber threat risk index map(1) Selected countries showing losses due to cybercrime in billion US$ in 2021
574.0
188.0
153.0
63.2
49.1 46.5
32.4 31.9 31.6 30.6
China Brazil U.S. Germany India France Italy UK Mexico Spain

Darker = Higher risk Insufficient data
189 Notes: (1) The Cyber Risk Index (CRI) predicts the risk of becoming a victim of cybercrime depending on the country of residence. The higher the index, the higher the risk.
Sources: Statista Technology Market Outlook 2022, IBM, NordVPN

The cybersecurity market in China is predicted to grow the most with an
estimated increase of 14.5% between 2022 and 2027
Total cybersecurity revenue forecast in billion US$
Americas Asia Europe Africa Australia & Oceania
+10.1%(1)
102.3
63.2
+14.5%(1)
+10.9%(1)
26.7 +11.0%(1)
+10.5%(1)
13.6 15.7
9.4 5.8
0.6 1.0 3.5
2022 2027 2022 2027 2022 2027 2022 2027 2022 2027
United States China United Kingdom South Africa Australia

1
9
There is still ample opportunity for growth: with US$2 trillion, the total
addressable market is approximately ten times the size of the vended market
Global cybersecurity market size in trillion US$ in 2021

Total addressable Current segment
1.5-2.0 Segment
market in billion US$ penetration
Data protection 50-100 30-35%
Governance, risk, and compliance 50-100 30-35%
Email security and awareness 50-100 10-15%
Cloud security 50-100 1-5%
Network security 50-100 15-20%

10x Identity and access management 50-100 20-25%
Security consulting 100-200 15-20%
Web security 100-200 5-10%
Iot/OT (1) 100-200 1-5%
End point security 100-200 5-10%
Application security 100-200 1-5%

0.14-0.15
Vended Total addressable Security and operations management 400-500 1-5%
market market MSSP/outsourcing(2) 400-500 5-10%
191 Notes: (1) Internet of Things/operational technology (2) Managed security service provider
Sources: McKinsey
Growing cybermarket
challenges and unsolved
opportunities are shaping
an industry on the rise
The business of cybersecurity is attractive, lucrative, and highly

competitive. Cybersecurity companies enjoy high-profit
margins due to rapid growth and the potential for rapid
expansion. The cybersecurity industry has been becoming ripe
for consolidation, especially with the support of the top players
and the prevalence of full-time hackers. Yet in this already
fragmented market, a chasm formed that was radically
accelerated by the pandemic. COVID-19 drove a rapid
development toward digital transformation. As digital
transformation grows, the security market grows with it.
What's clear is that there is a huge demand for cybersecurity
solutions in the post-pandemic market, which will give rise to a
surge of cybersecurity unicorns.
192
With sophisticated cyberthreats on the rise, the challenges and unsolved
opportunities for cybersecurity providers are numerous
Selected challenges and opportunities for cybersecurity companies
Visibility gap Technology-fragmentation Talent gap Cybersecurity ROI(1)

challenge
Problems
• Without visibility into their own digital • Enterprises grapple with the challenge • The number of unfilled cybersecurity • Organizations today struggle with
infrastructure, it will be difficult for of timing technology decisions (how to jobs grew by around 315%, from 1 understanding how to measure the
companies to recognize when, where, or balance agile-best integrated options million positions in 2013 to 3.12 million return or value of a dollar spent on
why there is a problem with fragile, fragmented, best-of-breed in 2021. cybersecurity, as well as how to
options) since different applications and • More than 3.5 million jobs in communicate its value to internal
providers are used cybersecurity are predicted to be stakeholders, such as C-suite and board
• Often, a company may have more than unfilled in 2025; the talent shortage is a members
100 third-party security tools. massive problem
Solutions
• Rethink the ‘pay by the drink’ approach • Produce offerings that allow for • More one-shop and full-stack-service To have a true security proposition, there
(such as pay per log) to volume-based seamless simplification of sprawl providers (such as ‘infra in a box’) are at least three dimensions that the
pricing models • Use cloud and software-as-a-service • Impact of delivery preferences on cybersecurity provider community should
• Identify the missing puzzle pieces to adoption or updates as an opportunity customers’ key buying factors consider:
building a 360° view for tool rationalization • Recruiting realistically by, for example,
• Reduce false positives, forcing the • Engage all stakeholders, make business- looking beyond traditional places, • Business value
organization to approach cyberthreats based simplification decisions, and don’t finding individuals with similar skill sets • Customer value
proactively, not reactively put all the cybersecurity burden on the that can be trained, and looking beyond • Market value
CISO. formal education
193 Notes: (1) To demonstrate the security investment’s ROI: calculate the reduction of breach risk in monetary terms
Sources: Mckinsey, Cybercrime Magazine

The large strategic and economic value of cybersecurity can be observed based
on stock performance of key players in the sector
Top cybersecurity companies stock performance in 2021 Top 20 IT security companies by market capitalization in US$ billion in 2022(1)
Palo Alto Networks 45.53

Fortinet 39.33
CrowdStrike 28.55
147% 62% 59% Zscaler 17.14
Check Point Software 15.98
Leidos 14.59
NortonLifeLock 14.41
Akamai 14.15
Cloudflare 13.08
Avast 8.70
F5 Networks 8.03
54% 40% 33% Okta 7.23
Trend Micro 6.72
SailPoint 6.18
CyberArk 5.92
Mandiant 5.39
SentinelOne 4.34
KnowBe4 4.33
27% 23% 19% Qualys 4.30
Tenable 3.90
194 Notes: (1) November 11, 2022
Sources: Companiesmarketcap, Momentumcyber

Cybersecurity companies are high performers and recorded an average profit
margin of over 70% over the past five years
Selected cybersecurity players gross profit margin range for the past 5 years Average industry gross margins in the U.S in 2022(1)
Software (System & Application) 72%

90.2% Investments & Asset Management 69%
87.8%
Drugs (Pharmaceutical) 67%
86.4%
86.8% Green & Renewable Energy 63%

Tobacco 63%
81.1%
Healthcare Products 59%
78.3% 78.6%
ø 76.2% Apparel 53%

78.0%
74.5% 74.8% Entertainment 42%
75.8% 73.0%
75.1%
Computers/Peripherals 37%
73.4%
71.4% Restaurant/Dining 32%

68.2% Advertising 26%
68.0%
Retail (Automotive) 22%
Transportation 21%
59.0% Air Transport 1%
Min Max Average
195 Notes (1) As of January 2022
Sources: Ycharts, Companiesmarketcap, Company information, Stern School of Business at New York University
In 2021, US$21.8 billion was invested globally in cybersecurity companies, with
80% raised by U.S.-based businesses
Global cybersecurity funding and number of deals

Total funding in billion US$ Number of deals per year
30 774 769 800

737 743
686
700
25 The cybersecurity
market in the U.S. has 21.8 600
experienced a sharp
20 increase in investment 4.4 500
since the significant
15 growth of this market 400
+145%
was predicted after
the first year of the 300
10 8.3 COVID-19 crisis 8.9
2.0 17.4
5.9 200
5.1
5
6.9 100
2017 2018 2019 2020 2021

Number of deals Total invested ROW(1) U.S.
196 Notes: (1) Rest of the world
Sources: Crunchbase
2021 has been a year for cybersecurity start-ups to achieve unicorn status with
an average development period of four years
Most funded topics for cybersecurity start-ups Average time to achieve unicorn status in the cybersecurity industry
Cloud security
Overall
funding 2021
37
2020
Application 6 4
Years
New
Unicorns
security New
Unicorns
5.2
Years
New
startups
Data security Vulnerability &
IoT
& privacy risk management
197 Notes: Unicorn is a term used in venture money to describe a private startup company valued at over $1 billion
Sources: Momentum Cyber 2022, Cybersecurity Almanac 2022; Investopedia

The cybersecurity market in North America, particularly in the United States, has
seen significant growth for new unicorns in recent years
Private cybersecurity companies valued at >1$ billion by region(1)
Europe North America
Asia
198 Notes: (1) As of 31.12.2021
Sources: Momentum Cyber 2022, Cybersecurity Almanac 2022

In 2021, four cybersecurity companies that recently became unicorns were
valued at more than US$8 billion
Latest unicorn valuations in US$ Selected cybersecurity unicorns

billion(1)
9.0
Tanium uses next-generation security Snyk offers security analysis tools to identify, Lacework is an automated compliance plug-
8.5 analytics and automation technologies for monitor, and fix vulnerabilities in open in for cloud creators that protects your
enterprises to identify potential threats on source code to ensure that applications are infrastructure from vulnerabilities and
8.3
their infrastructure. built securely from the start. security threats.
8.0
US$9bn(1) 2015 US$8.5n(1) 2020 US$8.3bn(1) 2021
7.5 valuation founded valuation founded valuation founded
6.8
2,200 17 1,400 30 1,120 19
6.0 employees investors employees investors employees investors
5.3
4.5
4.3
199 Notes: (1) As of 31,12,2021
Sources: Failory; Crunchbase; Tanium, Snyk, Lacework

Transmit and Lacework raised more than US$500 million in one funding round
and became unicorns in 2021
Global cybersecurity unicorn by funding round at the time it joined the unicorn club1
700
Size of funding round when joined the unicorn club
$543M
600 $525M
500
400 $200M
$180M $169M $200M $310M
300 $150M
$67M $100M
200 $150M $200M
100 $130M
$147M
$100M
0 $150M
2014 2015 2016 2017 2018 2019 2020 2021
Year joined the unicorn club
200 Notes: (1) As of 31.12.2021
Sources: Craft, Crunchbase, Company information

Modern warfare is moving
from land, sea, and air into
a new cyberspace arena
The internet’s global pathways mean that cyberactivities erase
much of the longstanding protection provided by borders,
walls, and oceans. With Russia’s invasion of Ukraine,
cyberattacks are like a war before the war. Russia began its
assault with hidden, massive, disruptive cyberattacks before
sending troops to the Ukrainian border in February.
There is an expected increase in Russian cyberattacks as

retaliation for sanctions imposed on the country in the
aftermath of this invasion. The U.S. government also warned
about possible Russian cyberattacks on infrastructure such as
the electrical grid, water treatment plants, and hospitals.
After the cybersecurity boom from the COVID-19 pandemic,

the war of Russia against Ukraine will continue to drive the
rapid growth of this market.
201
The borderless nature of cyberspace leads to a potential large-scale spread of
cyberwarfare
Main types of cyberwarfare attacks

Propaganda Attacks Electrical Power Grid Espionage Economic Disruption Sabotage Denial-of-service Attacks
Propaganda attacks involve trying Attacking the power grid allows Espionage refers to spying on Most modern economic systems Sabotage is a form of military A denial-of-service (DoS) attack
to control the minds of the people attackers to disable critical systems another country to steal secrets by depend on computers to function. attack, often conducted in could be used to cripple a critical
living in or fighting for the targeted and disrupt infrastructure. Attacks using a botnet or spear-fishing Attacking the computer networks conjunction with espionage, that website used by citizens, military
country by exposing embarrassing on the power grid can also disrupt attack to gain a foothold in a of financial facilities like stock aims to neutralize, frustrate, or personnel, safety personnel,
truths or spreading lies that cause communications and render computer before extracting markets, payment systems, or destroy the enemy’s military scientists, or others to disrupt
people to lose faith in their services such as text messages and sensitive information. banks can give hackers access to capabilities by destroying its critical operations and/or systems.
country. communications unusable. funds or prevent their targets from logistical base, including attacks on
getting their money. civilians and civilian objects.
Number of reported cyberattacks directed against the U.S. government by attack vector in 2020
30,819
114
10,102
2,753
1,242
11,874
345 32 93
4,264
Attrition E-mail/phishing External/ Impersonation/ Improper usage Loss or theft Web Other/ unknown Multiple Total
removable media spoofing of equipment attack vectors
202 Notes: United States; FY 2020; agency-reported incidents; US-CERT incidents
Sources: Mass.gov, Fortinet, TechTarget, US Office of Management and Budget

The threat of cyberwar and its purported effects are a source of great concern
for governments and militaries around the world
Selected cyber warfare events since 2010

2010 • Stuxnet: the first genuine cyberweapon was designed to inflict physical damage
2014 • Russian DDoS attack against Ukraine

• Russian-based hacking group took down Ukraine‘s election commission
2015 • Russian hackers infiltrated computer network of German Bundestag
• Chinese hackers stole 21.5 million records from the U.S. Office of Personnel Management
2016 • The second Russian-induced power outage in Ukraine
2017 • WannaCry: Ransomware Cryptowarm

• NotPetya: the frist major instance of weaponized ransomware
2018 • The heist of $3.4 billion worth of secrets and data proved to be connected to Iranian-based Mabna Institute
2019 • Trump administration retaliated against Iran’s downing of a U.S. drone with a cyberattack on a Revolutionary Guard (IRGC) database used to plan
attacks on tankers
2020 • A group backed by the Russian government penetrated thousands of organizations globally including multiple parts of the United States federal
government, leading to a series of data breaches
2021 • According to Microsoft, suspected Russian cyber engineers gained access to the networks of several different Ukrainian energy and IT providers
in late 2021
203
Sources: GRA Quantum, Bloomberg, Reuters

Full-scale cyberwarfare has been a component of Russia’s invasion of Ukraine in
2022
3rd: Sumy suffers widespread 11th: First Russian

electricity outages, including strikes in Dnipro
24th: Russia invades blasts at power stations; hit government
Military
Ukraine, and tanks Russia’s army occupies 3rd: Russian

advance into Sumy buildings
Ukraine’s largest nuclear th 16th: Russian airstrikes hit fuel
city center 1st: Missile power station 6 : Russia forces
rockets strike depots and
strikes Kyiv TV launch eight
TV tower in processing plants
tower missiles at
Vinnytsia around Odessa
Vinnytsia airport
FEB MAR APR
14th: Infrastructure
24th: Tens of
in Odessa 1st: Kyiv-based
17th: Critical thousands of Viasat 4th: Government 11th: Dnipro
compromised media
infrastructure modems crippled in government
Cyber
companies’ data network in

networks 23rd: Data erased in Ukraine and Europe 2nd: Network of Vinnytsia agency targeted
stolen and Ukrainian
breached in hundreds of compromised with destructive
28th: Kyiv-based deleted nuclear-power
Sumy government, IT, implant
energy, and financial- media company company
sector systems compromised breached
204
Sources: European Parliament, Microsoft Digital Security

Cybersecurity leaders need to improve their protection strategies to slow down
the constant evolution of cyberthreats
Cybersecurity predictions for the next two years Latest cybersecurity trends by regions
Through 2023, government regulations requiring organizations Global Europe Asia Oceania Africa America
to provide consumer privacy rights will cover 5 billion citizens
and more than 70% of the global GDP. Policy development
100
Through 2025, 30% of nation states will pass legislation that Threat analysis Military operations
80
regulates ransomware payments, fines and negotiations, up
from less than 1% in 2021. 60
Cybercrime
Education 40 prevention
By 2025, 80% of enterprises will adopt a strategy to unify web,
20
cloud services, and private application access from a single
vendor’s SSE platform. 0
Global efforts Crisis management
By 2025, 60% of organizations will use cybersecurity risk as a
primary determinant in conducting third-party transactions
and business engagements.
Digital services Incident response
60% of organizations will embrace Zero Trust as a starting
point for security by 2025. More than half will fail to realize the Essential services eID & TS
benefits.
205
Sources: Gartner, Ega

CHAPTER 5
Smart Mobility – The future is

digital, greener, and more efficient
Originally released in October 2022 (as Chapter 3)
Table of contents
Smart Mobility – The future is digital, greener, and more efficient
Smart Mobility: Its pressing challenge of reducing emissions remains

208
The Future of Mobility: Smart mobility in the 21st century will
lift citizens off the ground or transport them beneath it
221
The City of Tomorrow: It revolves around efficiency and
modern technology
229
207
Smart Mobility: Its pressing
challenge of reducing
emissions remains
The world event of the COVID-19 pandemic unleashed
difficulties with supply chains and components produced by
original equipment manufacturers (OEMs) in the mobility sector.
In particular, chip production, which is a crucial component of
modern mobility technologies, experienced a supply gap. In
addition, the recent beginning of the Russia-Ukraine war
wreaked additional havoc on the economic situation for
manufacturers, as production costs and inflation rose.
Nevertheless, due to its many opportunities, smart mobility
remains a hot topic. For instance, the reduction of greenhouse
gas emissions is a core goal of many countries worldwide. As
transportation accounts for roughly 30% of global GHG
emissions, greener mobility solutions are in high demand.
Additionally, the tackling of congestion by reducing car
ownership via mobility services promises a potential increase in
life quality, especially for highly urbanized areas. Therefore, if
current challenges can be overcome, smart mobility opens the
208
door to a range of futuristic opportunities in the coming years.
Smart Mobility will modernize mobility in many ways
Smart Surveillance & Road Safety Predictive Maintenance

• Cameras and other traffic monitoring • Maintenance of processes in
devices advance
• Connected security network
Smart Mobility
Benefits Intelligent Parking Management
Integrated Ticketing System • Data collection from sensors and
• Provision of easy-to-use multimodal other connected devices
services • Analysis of parking slot availability
• Integration into local services
Automated Toll Intelligent Traffic

Collection Management
Real-time Information
• Automatic payments Systems • Traffic monitoring and
management
• Data collection
• Avoidance of traffic
• Monitoring and management
jams and congestion
209
Sources: Pavia et al. (2021): Enabling Technologies for Urban Smart Mobility: Recent Trends, Opportunities and Challenges
The most pressing issue within smart mobility is the reduction of emissions,
mainly coming from the transportation sector
Share of GHG(1) emissions by sector in the U.S. and the EU in 2020
• Transportation accounts for an estimated 30% of

global greenhouse gas emissions. The emission split 3% 3%
13%
does not vary significantly across different regions in 22%
13%
27% the world.
11% • If we examine the development of greenhouse gas

emissions over the past two decades, all sectors
except the transportation sector were able to
decrease their emissions. 12%
• Since 1990, the transportation sector has been

unable to decrease its greenhouse gas emissions
and quite the opposite has happened: emissions
26%
24% have been increasing.
25%
22%
Transportation Energy supply Industry Agriculture Residential/commercial Waste Other combustion
210 Notes: (1) Greenhouse Gas Emissions
Sources: European Commission, U.S. Environmental Protection Agency

In 2022 car density is as high as ever, and cars remain our number one
transportation mode for commuting
Motor vehicles per 1,000 inhabitants Modes of transportation for commuting in selected countries in % in 2022
U.S. 868 U.S. Germany China UK

Finland 790
Bike sharing 4 2 10 2
Italy 756
Australia 748 Car sharing 5 1 5 2
Canada 730
France 667 E-scooter sharing 2 2 5 1
Germany 628
Motor scooter sharing 2 1 3 1
Spain 627
Japan 624 Own / household car 75 65 64 62
UK 594
Own bicycle 10 23 16 13
Sweden 545
Ireland 535 Own motor scooter 3 3 4 2
South Korea 485
Brazil 366 Own motorcycle 5 4 5 2
Turkey 254
Public transportation 12 27 21 24
South Africa 232
Singapore 149 Ride sharing/hailing 7 1 14 2
Indonesia 82
India 62 Taxis 5 2 12 6
211
Sources: Statista Global Consumer Survey, Statista Mobility Market Outlook, UN, WHO, U.S. Department of Transportation
Road transportation with passenger vehicles such as cars, motorcycles, and
buses is the biggest problem when it comes to CO2 emissions
Global CO2 emissions caused by the transport sector in 2021 Global road transport CO2 emissions by sector in 2021
9%
3%
11%
40%
10%
60%
68%
Road transportation Aviation Shipping Rail Buses(1) Passenger road vehicles Road freight vehicles(2)
212 Notes: (1) Includes minibuses and two/three-wheelers (2) Includes medium- and heavy trucks and light commercial vehicles
Sources: IEA
Compared to the entire life cycle of a passenger car, electric vehicles can reduce
CO2 emissions significantly
CO2 emissions during the entire life cycle of a passenger car • Compared to conventional vehicles, electric vehicles (EVs)
offset the high emissions generated in their production stage
-30%
after only two years
233.0
212.0 212.0 • Approximately half of a battery’s emissions originate from
195.0 electricity used in the manufacturing process
162.0 • Battery manufacturing emissions appear to be of similar

magnitude to the manufacturing of an average internal
176.0
159.0 155.0 123.0 combustion engine vehicle, which is approximately a quarter
140.0 72.0
of an electric car’s lifetime emissions
38.0
• Lithium-ion batteries and manufacturing techniques continue
to improve as the electric vehicle and stationary storage
90.0 85.0 industries grow
57.0 53.0 57.0 55.0
• Longer battery lifetimes will allow for longer vehicle lifetimes,
fewer replacements, as well as longer and/or more powerful
2020 2030 2020 2030 2020 2030
Petrol Diesel Electric second lives in stationary applications
Operation, energy supply Production, maintenance, disposal
213 Notes:
Sources: Federal Ministry for the Environment, International Council on Clean Transportation
Gasoline cars still constitute the majority of new car sales worldwide but will
decrease to only 61% of all new passenger cars in 2026
Fuel or drive-type share on new passenger cars in 2021 and 2026 Electric vehicle sales in thousand vehicles
2026 7%
5% 1% 1,120
1,166
China +193%
1% 1,285
14% 1% 3,278
1%
240
27% 2021 387
EU-27 +624%
1,046
61% 1,739
83%
346
305
U.S. +86%
316
645
Gasoline Electric Diesel Hybrid Alternative 2018 2019 2020 2021
214
Sources: Statista Mobility Market Outlook

The Russia-Ukraine war will heavily impact global sales of passenger cars and
electric vehicles in particular
Passenger cars market – volume sales Manufacturing PMI suppliers’ delivery times(1) We estimate that the Russia-Ukraine war will have a
heavy impact on the supply (and demand) for
73.9
2021 passenger cars and electric vehicles
73.9 Delivery times
55
decrease
• The most significant implications forecast not only
74.5
2022 -10% 50 cuts for the Russian and Ukrainian markets but also
67.4
Delivery times a global reduction due to supply chain problems
45
74.6 increase
2023 -10% 40 • Important components such as wiring harnesses,
67.4
35 electrical cables, and others are manufactured by
Electric vehicles market – volume sales Ukrainian suppliers; a shortage of those
30
components is imminent
6.5 25 Europe
2021 • Both Russia and Ukraine function as suppliers of
6.5 20
U.S. raw materials such as palladium, nickel, and iron,
7.2 15
2022 -1% which are all needed in the production of all vehicle
7.1
10 types
8.4 5
2023 +2% • In addition to the reduction of supply, the resulting
8.6
0 economic crisis is also driving down consumer
Pre-war volume Post-war volume 01/2019 01/20 01/21 01/2022 demand
215 Notes: 1) PMI = Purchasing Manager’s Index; an index of over 50 indicates that delivery times are getting shorter, while and index of less than 50 indicates a decrease in delivery times
Sources: Statista Mobility Market Outlook, International Monetary Fund (IMF), IHS Markit
Scooters are really driving the electric vehicle (EV) revolution at the moment
EV revenue and share by country EV share of vehicle category sales and share of electric two-wheeler sales
861,499 Vans and trucks Passenger cars Buses 2- and 3-wheelers

1% 9%
11%
ROW 44% 42%
5% 4%
38%
11%
UK
16% France Size of EV fleet
Germany 613,450 16,733,957 685,005 274,767,231
381,485
U.S.
80
China
60 South Korea
40 Europe
China
20 India
U.S.
0
2022 2027 2018 2020 2022 2024 2026
216
Sources: Bloomberg NEF

Charging infrastructures are a barrier for electric mobility, but the world is
catching up with China, which is at the fore of EV fast-charger installations
Global number of public charging stations in thousands Direct current, fast-charger installations (50kW+) in thousands
+63%
Number of +95%
gasoline stations
2,800 390
in 2021 in
the EU-27: 2,521
113,322 2,252
+25%(1)
1,990
1,734 200
1,430
1,210
65
809 40
587
310 372
2021 2022
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 China ROW
Sources: Statista Mobility Market Outlook; BloombergNEF, China EV Charging Association

Autonomous driving holds another potential for CO2 reduction but is still far
away from its breakthrough
Global penetration of autonomous driving levels in passenger cars

1 1 2
Net effects of vehicle automation on emissions across a
21 23 variety of examples such as:
26 28 30 31 33 34 • Platooning
Level 5: no driver’s attention needed
No attention needed +
Driver is not accountable
• Eco-driving
Level 4: vehicle drives in ideal conditions
• Traffic-flow calming
54 54 • Collision avoidance
Level 3: no human interaction <60 km/h 53 53 52 51 50 49 • Increase in ridesharing
Level 2: partial automation
show that automation could reduce GHG emissions and
energy usage. A few studies have indicated that the
Level 1: driver assistance
positive emission changes may not be realized at a lower
25 23 21 19 18 17 16 15 AV penetration rate, where the maximum emission
Level 0: no self-driving functions
reduction might take place within the 60–80% AV
2019 2020 2021 2022 2023 2024 2025 2026 penetration rate.
Autonomous 0 Autonomous 1 Autonomous 2 Autonomous 3
218
Sources: Statista Mobility Market Outlook; International Journal of Environment Research and Public Health
The main barriers to autonomous driving are data accessibility and insufficient
digitalization
Policy & Legislation Technology & Innovation Infrastructure Consumer acceptance
29% of transportation data has an open 43% of open transportation data is 4G LTE(1) coverage reaches 80% of the 84% of consumers in the U.S. would not
license machine readable world, 5G 15% want to use a self-driving taxi
• Autonomous-vehicle regulations • Industry partnerships • Electric-vehicle infrastructure • Consumer digital savviness
• Data-sharing environment • Availability of the latest technologies • Mobile-connection coverage • Willingness among consumers to
adopt new technologies
• Efficiency of legal system • Cybersecurity • Quality of roads
• Perceived level of safety of
• Assessment of cloud computing, • Mobile-connection speed
autonomous vehicles
artificial intelligence, and internet of
things • Ethical dilemmas and challenges
facing the programming of
autonomous vehicles
219 Notes: (1) Fourth generation long-term evolution
Sources: ericsson, Open Data Barometer, Statista Global Consumer Survey, World Wide Web Foundation
In an optimistic scenario, net-zero CO2 emissions in the transport sector can
only be achieved in 48 years
Global CO2 emissions in transport by mode in the Sustainable Development Scenario

GtCO2 per year
Light commercial Passenger cars,
Two-/three-wheelers Rail
8 vehicles buses, and minivans
0
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070
Rail Two/three-wheelers Passenger cars Light-commercial vehicles Buses and minibuses Medium- and heavy trucks Shipping Aviation
220 Notes: Dotted lines indicate the year in which various transport modes have largely stopped consuming fossil fuels and hence no longer contribute to direct emissions of CO2 from fossil fuel combustion. Residual emissions in
transport are compensated by negative emissions technologies, such as BECCS and DAC, in the power and other energy transformation sectors.
Sources: IEA
The Future of Mobility:
Smart mobility in the 21st
century will lift citizens off
the ground or transport
them beneath it
Compared to traditional mobility services, the advantage of air
mobility is clear: reduced travel times, eco-friendliness, high
scalability for additional air routes, and no congestion. Hence, in
the long term, air mobility could crowd out current state-of-the-
art mobility services. This technology is projected to be available
as part of intermodal traffic by 2025. Although at this point in
time, air mobility will be a luxury product only and not yet
compete with traditional forms of mobility, this might change by
2035 when mass-market available services could change traffic
drastically. While a lot of companies focus on air mobility, in
congested urban areas, going underground could also help to
unclog traffic.
221
Electric vertical take-off and landing aircrafts (eVTOLs) fit perfectly into the
competitive field of regional and local mobility modes
Mobility Mode Scope Distance by Mode

Mobility demand varies
Walking
When comparing different
Micromobility (e.g., bikes, e- modes of mobility eVTOLs(2)
scooters) can be used for local but
also regional distances.
Motorcycle
Either intracity ports or city-
Car local to-city connections are a
possible use case for air
Bus mobility services.
Depending on its battery
Train capacity, a distance of up to
regional
400 km may be possible.

eVTOL(2) This could improve overland
travel times tremendously.
Helicopter
Plane global
Distance
0 2 4 6 8 10 20 40 60 80 100 400 800 1200 1600 in km (1)
222 Notes: (1): Typical distance for 70 percent of trips used by respective mode, (2): Electric vertical take-off and landing aircraft electric Vertical Take-Off and Landing aricraft
Sources: Porsche Consulting – The Economics of Vertical Mobility

Funding for air taxi startups has skyrocketed in the past years
Venture capital investments in air taxi startups in US$ million Share of total disclosed funding per startup in 2021
+3,126% Other
AutoFlightX
5,806 12%
Reliable Robotics
21%
Ampaire
1% 1%
1%
2% 2%
3%
3%
5%
16%
5%
1,250
5%
5% 12%
129 200 202 180
6%
2016 2017 2018 2019 2020 2021
223 Notes: Data as of December 2021
Sources: TNMT.com – Air Mobility Investment Dashboard

The challenges for vertical mobility solutions are as great as its opportunities
Profitability Safety Demand Applicability
One of the big difficulties with air In 2013 the Alaska-based air taxi service For the attractiveness of the service, Although air taxi technology is not
mobility is rooted in acceptance. Rediske Air crashed, thus tainting the performance and price play an expected to fully solve traffic problems
Without a demand for this technology, it reputation of vertical mobility in the important role. In order to ensure the in highly populated cities, accessible air
will not be possible achieve the early stage of the market‘s development. large-scale rollout of this technology, low taxis will function as an extra
expected ROI. Therefore, one of the Recovery quickly came as more and costs combined with highly demanded component of the entire mobility
core concerns companies will need to more reliable companies such as Uber, routes are important. Additionally, noise market if they reach acceptance.
manage is safety, as it is vital to attract Porsche, and Boeing started to develop emissions and technological hurdles
customers. projects related to air mobility. This such as battery capacities need to be
fostered trust in recent years that this overcome to convince customers over
technology can be applied with the same the long term.
safety standards used in public
transportation.
224
Sources: Porsche Consulting – The Economics of Vertical Mobility, TNMT.com – Are Air Taxis Ready For Prime Time?
Space travel will be no science fiction and be an important part of mobility
Number of carrier rockets by type launched by SpaceX Global annual number of objects launched into space
49.0 2,000
1,807
2.0
1,500
31.0
2.0
26.0 38.0
21.0 5.0
18.0 1,000
9.0 13.0
7.0 29.0
9.0 13.0 3.0
1.0 21.0
6.0 1.0
3.0 11.0 8.0
8.0 9.0
6.0 5.0 500
1.0 2.0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
72
Failure New Falcon 9 Falcon Heavy
Falcon 1 Used Falcon 9 Planned 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
225
Sources: spacexstats.xyz, ourworldindata.org

Since the privatization of the aerospace industry, several key players have made
considerable headway in launching more efficient, cost-effective spacecrafts
SpaceX was the first aerospace corporation to build Blue Origin has ambitions to create a future in which Virgin Galactic mainly focuses on space tourism and
reusable launch vehicles. Its mission is to reduce the millions of people live and work in space, potentially connects potential civilian astronauts with the luxury
costs of space travel, in turn making space more even moving industries that the company deems of space travel, as opposed to commercial applications
accessible with the long-range goal of colonizing Mars. environmentally damaging into space. like satellite communications.
However, the majority of turnover is generated by Blue Origin’s reusable rockets are suitable for manned Unlike SpaceX and Blue Origin, Virgin Galactic employs
commercial satellite launches, with Starlink posed to missions and cargo transport alike. Blue Origin is winged spacecraft in lieu of vertical, ground-launch
become a multi-billion-dollar enterprise. already conducting spaceflights for private persons. rockets. Spaceflights will become available in 2023.
Key Facts Key Facts Key Facts
• Employees: ca. 12,000 • Employees: ca. 6,000 • Employees: 803 (Dec. 2021)
• Total Number of Launches: 185 • Total Number of Launches: 23 • Total Number of Spaceflights: 4
• Revenue: US$1.6 billion (2021) • Revenue: >US$100 million (2022) • Revenue: US$3.3 million (2021)
• Valuation: US$127 billion (2022) • Funding: US$167.4 million(1) • Market Capitalization: US$1.23 billion (Oct. 2022)
226 Notes: (1) While external funding has only reached an amount of US$167.4 million, founder Jeff Bezos reportedly invests US$1 billion annually in the company by liquidating his Amazon stocks
Sources: Company information, CNBC, Trefis, FFX Now, Market Realist, Crunchbase
In congested urban areas, going underground could also help to unclog traffic
Underground Tunneling Hyperloop
Dense urban areas commonly face the problem of congestion in traffic, yet there is Hyperloops are a nascent technology in which pods carrying passengers or freight
little space to add additional lanes. Instead of building multilevel streets, the idea of are sent through a partially evacuated tube by means of magnetic propulsion,
building elaborate tunnel systems to solve this problem is gaining traction. allowing for speeds of over 1000 km/h.
This concept is somewhat related to but nonetheless distinct from subway systems. Several global routes have been proposed from the U.S. East Coast to India, but the
An underground tunnel system was commissioned in Las Vegas, and proposals in technology is still in development and largely hypothetical.
Fort Lauderdale and other cities have been submitted.
Pros Cons Pros Cons

• Reduces road congestion • Construction is costly • Reduces road congestion • High development costs
• More elaborate structures • Favors private transport • Faster (under)ground travel • Technical hurdles
possible over mass transportation
227
While recent advances in tunnel boring could be described as underwhelming,
first tests with hyperloop technology have shown promising results
Tunnel construction key players Hyperloop key players
The Boring Company was founded with the ambition of building faster tunnel Founded in 2014 by an associate of Elon Musk, the company has since entered a
boring machines by vertical integration and technical innovation. The company has strategic partnership with Virgin Group, leading to restructuring and rebranding.
already built tunnels in Las Vegas and Hawthorne, CA. The company had its first hyperloop human trial in 2021 but has since decided to
abandon passenger transport in favor of freight transport.
Bechtel is the largest construction company in the US and a world

leader in tunnel construction. It was involved in the construction of the Channel This French-Canadian startup plans to build a transport network system and
Tunnel connecting the UK and France. corresponding passenger pods based on hyperloop technology connecting major
cities in Canada, starting with Calgary and Edmonton.
A German world leader in tunnel construction and the manufacture of tunnel

boring machines. According to their own statements, they had a market share of
over 70% of the €1.5 billion market for tunnel boring machines in 2014.
228
Sources: Company information, Süddeutsche Zeitung

The City of Tomorrow: It
revolves around efficiency
and modern technology
The smart city refers to a technology-based approach, which
aims to increase life quality for citizens, government
interactions, and sustainable development. As many cities
grow in the coming years, area efficiency is a core challenge
many countries face as housing becomes more expensive and
free spaces become scarce. Digital solutions, such as smart
control of traffic zones, promise to assist in solving these
problems. As an example, mobility-on-demand services can
free up space by reducing parking lots and targeted
transportation. Additionally, e-governance promises a digital
transformation of public administration processes that
improve and/or eliminate cumbersome procedures.
229
Rapid urbanization and its repercussions are leading to a demand for new
smart-city solutions
Global megacity populations in thousands in 2022 Global smart city initiatives and spending distribution in 2020
Tokyo-Yokohama, Japan 37,732

Jakarta, Indonesia 33,756 Others
Delhi, India 32,226 10%
Guangzhou-Foshan, China 26,940 Japan United States
Mumbai, India 24,972 6% 26%
Manila, Philippines 24,922
Shanghai, China 24,073
São Paula, Brazil 23,086
Seoul-Incheon, South Korea 23,016 Asia Pacific
excl. Japan 12%
Mexico City, Mexico 21,804
New York City, United States 21,509
Cairo, Egypt 20,296
Dhaka, Bangladesh 18,627
Beijing, China 18,522
Kolkata, India 18,502
Bangkok, Thailand 18,007
Shenzhen, China 17,619 25%
22%
Moscow, Russia 17,332
China Western Europe
Buenos Aires, Argentina 16,710
Lagos, Nigeria 16,637
230
Sources: Wendell Cox Consultancy, IDC.com

A multitude of smart-city solutions can ensure the sustainable transition of a
territory and also contribute to improving the quality of life of its citizens
Smart Mobility Smart Environment

• Local accessibility • Attractivity of natural resources
• ICT Infrastructure • Environmental protection
• Sustainable, innovative, and safe Smart City • Sustainable resource management
transport systems Dimensions
Smart Governance Smart People
• Participation in decision-making • Level of qualification
• Public and social services • Social and ethnic plurality
• Transparent governance • Cosmopolitanism / Open-mindedness

Smart Economy Smart Living
• Entrepreneurship • Cultural facilities
• Productivity • Housing quality

• Ability to transform • Touristic attractivity
231
Sources: United Nations University: Smart Sustainable Cities – Reconnaissance Study

Smart cities are evolving around the globe with Singapore at the top
Global technology spending on smart city initiatives in billion US$ Smart City Ranking 2021
# City Smart City Rating Country

189.5
1 Singapore AAA
+19%(1) 158.0
2 Zurich AA
3 Oslo AA
124.0
4 Taipei City A
104.3
5 Lausanne A
81.0
6 Helsinki A
7 Copenhagen A
8 Geneva A
9 Auckland A
2018 2019 2020 2022 2023 10 Bilbao BBB
Sources: IDC.com, International Institute for Management Development

Smart city market revenue is forecast to double from 2020 to 2025 and reflects
the increasing importance of smart cities
Worldwide projected revenue of the smart city market by segment in billion US$
Total Smart Infrastructure Smart Building Smart Utilities Mobility

241.0 9.5%(1)
103.6
15.7% 1
116.4 65.8 12.6%(1) 27.5%(1) 28.1%(1)
35.1 30.1 27.7
19.4
8.9 8.0
2020 2025 2020 2025 2020 2025 2020 2025 2020 2025
Public Safety and Security Environmental Solutions Smart Government Smart Lighting Smart Healthcare
19.9%(1) 33.6%(1)
29.8%(1) 25.3%(1) 25.6%(1)
19.7 16.6
7.9 3.9 1.2 4.3 0.8 2.5 0.5 1.5
2020 2025 2020 2025 2020 2025 2020 2025 2020 2025
Sources: Statista Mobility Market Outlook

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DIGITAL MARKET OUTLOOK
The digital future of

90+ markets in over 150 locations
The Digital Market Outlook presents up-to-date figures on markets
of the digital economy. The comparable key figures are based on
extensive analyses of relevant indicators from the areas of society,
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Media, eServices, FinTech, Digital Advertising, Digital
Health, and App
• Covering the period 2017 to 2026
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ADVERTISING & MEDIA OUTLOOK
Figures and insights about the

advertising and media world
The Advertising & Media Outlook provides forecasts and detailed
market information regarding two interlinked topics relevant to
decision-makers in almost every industry. It is designed to help you
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Everything you need to know

about consumer goods
The Consumer Market Outlook presents the key
performance indicators – sales, revenues, and prices – of the most
important consumer markets worldwide. Our market calculations
made by our in-house analysts are based on data from validated
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Insights into the world's most

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Everything you need to know

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The Mobility Market Outlook combines key mobility topics and
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• Mobility-related market insights, forecasts, and indicators

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consumers
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• Cross-tabulation
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million listed and privately held companies and contains the most
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243
Authors (1/2)
Christoph Blumtritt Dr. Jeremiah Lasquety- Jonah Trenker Krueatip
Senior Team Lead Advertising & Reyes Analyst Advertising & Media Outlook Chanthadumrongrat
Media and Digital Market Outlook
Senior Analyst Digital Market Outlook Analyst Advertising & Media Outlook
[email protected]
[email protected]
[email protected] krueatip.chanthadumrongrat@sta
tista.com
Christoph Blumtritt graduated in Sociology Dr. Jeremiah Lasquety-Reyes obtained his Jonah Trenker graduated in Tübingen, Krueatip Chanthadumrongrat graduated
from the University of Münster in Germany Ph.D. in Philosophy from the KU Leuven, Germany with a master’s degree in with a master’s degree in International
with a focus on empirical research methods, Belgium. He has taught courses on statistics economics and finance, with a focus on Management from Bremen, Germany.
social structure analysis, and economics. and data analytics at the University of empirical calculations.
Europe for Applied Sciences in Hamburg.
Marian Ulbrich Dr. Maria Andrades Matt Miller Phuong-Ha Nguyen

Working Student Digital Market Outlook Sanchez Analyst Digital Market Outlook Analyst Technology Market Outlook
Senior Team Lead Mobility &
[email protected] Industrial Markets [email protected] [email protected]
maria.andrades-
[email protected]
Marian Ulbrich is studying Digital Business & Dr. Maria Andrades Sanchez studied Matt Miller graduated with a master’s degree Phuong-Ha Nguyen graduated from the
Data Science at the University of Europe for Demography at the University of Rostock in in International Management from the Berlin Saxion University of Applied Science in The
Applied Sciences in Hamburg, Germany. Germany before she went on to study for School of Economics and Law. Netherlands before she studied for a
her Ph.D. at the statistical faculty of Sapienza Master’s in Science at the University of
University of Rome in Italy. Magdeburg in Germany with a focus on
operation research and business analysis.
244
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Authors (2/2)
Raynor de Best Sai Satkriti Menon Solej Cybulskyj
Expert Financial services and real Analyst Digital Market Outlook Senior Working Student Technology
estate Market Outlook
[email protected]
[email protected] [email protected]
Raynor de Best is a research expert with several Sai Satkriti Menon obtained his MBA from Berlin Solej Cybulskyj is studying social and political
years of experience. At Statista, he focuses on School of Economics and Law, with a focus on sciences at the University of Hamburg. At Statista,
digital developments and their influence on Digital Business Leadership, Supply Chain he is responsible for the technology market.
payment solutions and currencies, including Management & Entrepreneurship.
cryptocurrencies, NFT, and DeFi.
245
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DIGITAL

Dr. Friedrich Schwandt (CEO)

From frenzy to fall:

From frenzy to fall: is eCommerce back to normal?

A post-pandemic hangover is ending the celebration of eCommerce growth 8

is ending the celebration

Sources: Statista Digital Market Outlook, June 2022

Sources: Yahoo Finance; Company information

Global eCommerce revenue forecast in billion US$(1)

+10.1% Growth +1.4% Weakening

Online Increased Friction COVID- Inflation Consumer Supply- Recession Total

Household 69 Fashion Furniture Beverages

Sources: Statista Digital Market Outlook, June 2022

2019 2020 2021 2022 2019 2020 2021 2022

2020 2021 2022e

Sources: Company Information; eCommerceDB; Statista Market Outlook 2022

Sources: Statista Digital Market Outlook, June 2022

Global eCommerce revenue in billion US$ and growth rates(1)

2017 2018 2019 2020 2021 2022 2023 2024 2025

Sources: Statista Digital Market Outlook, June 2022

The Economist -0.5%

Moody’s Analytics -0.6% 3.6% 3.6%

Fitch Ratings -0.7%

Oxford Economics -1.0%

Kiel Institute -1.0%

Magnitude of estimated cost of shock in US$ COVID-19 Acute climate events

100s of Man-made disaster

Ability to anticipate (lead time) More frequent not (yet) occurred

Sources: McKinsey Global Institute analysis

COVID-19 stringency index for selected countries(1)

Sources: Oxford COVID-19 Government Response Tracker

Starting point Expected immediate impact Possible long-term consequences

Sources: Statista Digital Market Outlook, June 2022

40 • Labor shortages, particularly in the US and Europe

35 • Extreme weather events

25 • Aging or insufficient logistic infrastructure (e.g., congested ports and canals)

Sources: International Monetary Fund (IMF), IHS Markit

PMI STD(2) Economic Factors Supply Chain Factors

Expected impact by industry (ISIC(1))

Agriculture(2) Banking, Finance & Insurance Accommodation, Restaurants & Nightlife

Mining & Quarrying(3) Manufacturing Real Estate

26 Notes: (1) Projections as of June 2022

Sources: OECD, IMF, Kiel Institute, NIESR, Oxford Economics

Fuels Gasoline Eggs Electricity Dairy Beef Fruit Sweets

YoY 2021 YoY 2022

27 Notes: (1) Based on yearly average

Sources: OECD; U.S. Bureau of Labor Statistics

Modeled impact on forecast by category (COICOP(1))

Housing maintenance Goods for routine Newspapers, books, and

Sources: Statista Digital Market Outlook, May 2022

Projected consumer spending worldwide by impact scenario in trillion US$ in 2022

Food & fuel 11.3 11.8 +4% +8% +12%

Staple services 22.0 21.7 -1% 21.4 -3% -4%

Original forecast Bad scenario Worse scenario Worst scenario

5.9 5.9 5.9 5.4 6.1 6.5 6.3

Deals Funding Total Unicorns New Unicorns

MoM(1) web traffic growth of selected eCommerce key player

Jul 20/21 6% 5% -7% 2% -13%