Pet Retail Market and Valuation Outlook

90 Appendix 18 18. Delivery Time & Shipping Price Analysis (A) In the competitive dynamics of online, freight is the major variable to understand which player is best positioned to meet the demands of its customers. In our freight analysis, we included 21 different locations with 4 types of specifications, these being: (1) Presence of Petz and Cobasi; (II) Presence of Petz; (III) Presence of Cobasi; and (IV) No Petz and Cobasi. In this analysis, we analyzed a feed in 5 different stores (Petz, Cobasi, Petlove, Magalu and MELI), analyzing the different types of delivery and respective times, coming to the following conclusions: (1) Last-Mile matters, and where Petz and Cobasi are physically present are the places where both can deliver most cost-effectively and most efficiently; (II) Petlove, although a purely Pet market player, cannot deliver as efficient a service as megastore players due to low capillarity and the need to pass on freight price to the customer; and (III) Horizontal players do not pay as much attention to this market yet, with difficulties in stocking and making efficient deliveries, especially MELI that, although it has extreme capillarity in the country and makes deliveries as fast as Petz and Cobasi, charges a lot for this, which is not well seen by consumers. It is important to point out that there are business days smaller than 1 because we have made averages between the different delivery times, some of which are fractions of a day (i.e. 3 or 4 hours). Delivery Time (Business Days) Delivery Time (Business Days) 19 2 8 96 5 4 3 2 о Shipping Analysis; [Business Days x BRL] BRL O Cobasi Petlove Petz (1) Petz and Cobasi BRL 10 BRL 20 Shipping Price (III) Only Cobasi Petz Petlove Cobasi BRL O BRL 10 BRL 20 Magalu Shipping Price MELI Magalu BRL 30 BRL 40 MELI BRL 30 BRL 40 Delivery Time (Business Days) Delivery Time (Business Days) 20 +2 852 6 16 m Cobasi BRL O Petz Petlove (II) Only Petz MELI Magalu BRL 10 BRL 20 BRL 30 BRL 40 BRL 50 Shipping Price Cobasi (IV) Neither one Petz Petlove MELI Magalu 0 BRL O BRL 10 BRL 20 BRL 30 Shipping Price BRL 40 BRL 50 BRL 60 BRL 70 Source: Team 7

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