YAN DI President - CEO - Baidu Brasil

What China Taught Us about Internet ∙ 互联网

Size Does Matters

40% Top 10 Internet Players/Unicorns are China-Based

China is No.1 Market of Internet

111.00 137.00 210.00

298.00 384.00

457.30 513.10

564.00 617.58 648.75

688.26

8.5% 10.5% 16.0%

22.6%

28.9% 34.3%

38.3% 42.1%

45.8% 47.9% 50.3%

0%

10%

20%

30%

40%

50%

60%

0.00

250.00

500.00

750.00

1000.00

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Internet users (million) Internet penetration rate

By the end of 2015, Chinese netizens reached 688 million.

Source: CNNIC – The 37th Statistical Report of Chinese Internet

2 x Bigger Than That

of USA

China is No.1 Mobile Player

519.7 574.2

624.7 672.1

704.1

38.3% 42.2%

45.7% 49.0%

51.1%

0%

10%

20%

30%

40%

50%

60%

0

200

400

600

800

2014 2015 2016e 2017e 2018e

China Smartphone User Size

& Population Penetration

Smartphone users (Million) Penetration rate (%) Source: t ti t

Almost All Netizens

Are Mobile

China is No.1 Mobile Payment Market

Last year mobile transactions of $235 billion, pushing China ahead of the U.S. ($231 billion).

Data by WSJ

2016 195MM Chinese use

mobile payment vs. 37.5MM in US.

China is No.1 E-Commerce Body

6

7.85

10.2

13.4

18.3

22

30.8% 29.9% 31.4%

36.6%

20.2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

5

10

15

20

25

2011 2012 2013 2014 2015 2016e

China E-commerce Market Transaction Size

Total transaction value (RMB, Trillion) Growth rate Source: http://money.163.com/16/0517/16/BN9GPRUG00253B0H.html

Alibaba Sold More in a

Single Day (11/11/2015) than

Brazilian E-Commerce in a Year: R$45.6 bi vs.

R$41.3bi

China has Top Venture Funding Power

U$60.5B & 4489 Deals

in Total

Source:TechAsia

Something Unique

Welcome to a Different World

BAT Bigger than the Rest of Top 30

Ranking TOP 30 por receita via Internet móvel 2015

No. Empresa Receita 2015

Internet móvel （RMB 100 milhões ）

Usuário Internet móvel

(10 mil pessoas)

No. Empresa Receita 2015

Internet móvel （RMB 100 milhões ）

Usuário Internet móvel

(10 mil pessoas) 1 Tecent 447.0 62,095 16 Cheetah Mobile 24.3 7,767 2 Alibaba 425.0 30,232 17 Sina.com 23.3 13,316 3 Baidu 351.8 43,211 18 58.com 23.2 2,238 4 JD 149.0 4,004 19 Vgame 22.8 398 5 VIP.com 84.1 2,827 20 Longtu Game 21.0 266 6 NetEase 83.9 7,188 21 iQIYI 21.0 18,113 7 Ctrip 76.6 713 22 UCAR Inc. 17.1 130 8 Meituan-Dianping 58.5 7,391 23 YHD.com 16.9 342 9 Sohu 39.6 13,697 24 iDreamSky Games 16.4 3767 10 Qihoo360 35.5 19,216 25 Jumei.com 15.5 844 11 Youku-Tudou 31.7 14,686 26 Zuche.com 15.5 34 12 Xiaomi 26.0 7,233 27 Kunlun.com 14.7 904 13 Qunar.com 29.5 1,086 28 Google China 13.7 / 14 Amazon China 26.2 385 29 Kingnet.com 13.0 57 15 ELEX 24.6 119 30 BlueFocus 12.0 /

BAT Omnipresence Leads to the Rise of SuperApp/OS/Platform

Vídeos

生活

Finanças

健庩 音乐

Educação

Carro

Compras

Turismo

赸级 APP

172

177

207

180

306

329

494

583

157

141

0 200 400 600 800

Sogou Pinyin

Baidu maps

Baidu mobile

Taobao

UC browser

QQ browser

TencentVideo

Wechat

QQ

AliPay

Índice de conectividade com aplicativos móveis TOP 10 em 2015

Índice de Conectividade: representa a capacidade de um aplicativo móvel em estabelecer ligações com outros aplicativos. Mede-se a quantidade de relacionamentos de um aplicativo com todos os outros, quanto maior o número, mais forte a conectividade.

Posicionamento OS

Super-App

Músicas

Saúde

Vida

What China Taught Us About Internet

Mobile First

Future is Mobile, Period.

2.1

3.0

3.9 4.6

5.7

6.5 6.8

0.4 1.0

2.0

2.8

5.2

4.3

5.7 6.5 6.2

7.3 7.9

0

1

2

3

4

5

6

7

8

9

Usuários de Internet móvel e Internet via PC 2007-2015

Usuários de Internet via PC Usuários de Internet móvel

Em 2012, o número de usuários de Internet móvel superou o de usuários via PC

2007 2008 2009 2010 2011 2012 2013 2014 2015

Obs.: Usuário de Internet móvel é aquele que usa o serviço, em média, pelo menos uma vez em cada trimestre. Usuários anuais são aqueles ativos até o final do quarto trimestre. O mesmo critério aplica-se aos usuários da Internet via PC.

© Analysys 易观 www.analysys.cn

x 10 milhões de pessoas

Most of Revenue will be Mobile too

43% 45% 53%

44% 37%

70%

90%

32% 37%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10%

0%

Taxa de comercialização da Internet móvel das principais empresas 2013-2015

2013 2014 2015

82%

Tencent Alibaba Baidu JD VIP.com NetEase Ctrip Meituan-Dianping Sohu Qihoo 360

Obs.: 1. A taxa é a percentagem da receita via Internet móvel no total; 2. Dados extraídos do relatório financeiro das empresas, dados não revelados foram estimados com base em entrevistas e modelos desenvolvidos pela Analisys

© Analysys 易观－Relatório financeiros das empresas www.analysys.cn

In Mobile, M-Commerce is Dominant & O2O Holds Great Potential

49.1%

30.6% 15.6%

8.8% 7.4% 6.6% 5.7%

6.3%

4.9%

3.1% 2.3% 1.8% 1.6% 1.3%

37.4%

55.3%

64.1% 67.4% 66.7% 64.7% 63.7%

2.8%

3.6% 3.8%

33..66%% 6.4% 13.7% 3.5%

18.6%

2.9%

20.9%

3.2%

23.5% 25.5%

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015 2016F 2017F 2018F

Projeção da estrutura do mercado da Internet móvel 2016-2018

© Analysys 易观 www.analysys.cn

Taxa de tráfego Entretenimento móvel Compra móvel Marketing móvel Servico móvel

Innovations Vary

China has Solid Hard Technology, But Best at Improving Efficiency

China probably will the only country that owns space station by 2024, when the International Space Station (ISS) retires. China plans to land astronauts on the moon by 2030.

China sets the world record of 600Km/h of bullet train speed and builds 20,000 Km -high speed railway network(more than the sum-up of the rest of the world) .

70% of world’s drones are made by one single Chinese manufacturer, DJI.

E-Commerce Innovation

Chinese E-Commerce Goes Through Insightful Phases

Fase 1.0

Fase 2.0

Fase 3.0

Preço baixo é o foco do consumidor e a base da competitividade.

O consumidor passa a privilegiar marca, qualidade, logística e pós-venda.

Preço e serviços não bastam, consumo experimental e serviços diferenciados são novas atrações.

Preço Qualidade Experiência

Feira Varejo/departamento

produtos diferenciados

Fase 4.0

Nec

essi

dade

s

do c

onsu

mid

or

comércio contextualizado

Identidade

O consumo é evocado em contextos e cenários específicos, onde há simpatia e identificação – por exemplo nas mídias sociais.

Content Innovation

China Changes the Way How to Distribute Content

音频 视频 工具

Novos modelos Portais Algoritmos Redes sociais

Forma de informação geração 1.0 Forma de informação geração 1.5

Service Innovation

Online-to-Offline Reaches Unprecedented Heights

Source: htt // t / t t/659761

26 Unicorns in China O2O Market

O2O Changes Service Consumption Habit

Source: http://www.sootoo.com/content/659761.shtml

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

bilheteria bilheteria on-line off-line

Evolução da bilheteria de off-line para on-line entre 2013 e 2015

2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2

© Analysys 易观智库 www.analysys.cn

The Future is Now

The Biggest VR Battle Field

+100 VR Devices Developed in China & 40% World’s VR Devices Sold to China

Entertainment Tourism Film Game Showbiz

Consumer E-Commerce Test-Drive Real Estate

AI is the New Brain

Driverless Car

Voice & Facial Recognition 97% & 99.77%

“China has now eclipsed us in AI research” – The Washington Post

KITTI vehicular recognition accuracy rate: 90.13%, highest in the world.

China Internet Evolves Fast: PC->Mobile->Intelligent Internet

Baidu Brasil

Mobile - 7 Swordsmen & 1 Hero

Du Battery Saver

Du Speed Booster

Baidu Browser

Mobo Market

ES File Manager

Photo Wonder

Du Emoji Keyboard

27 MM Monthly Active Users

400 Clients

150MM Daily Ad Requests

DAP - Du Ad Platform

PeixeUrbano – A Role Model in Local Synergy with Baidu

GMV: +100% YOY

Market share： 70%

Brand Awareness：No.1

Baidu acquired PeixeUrbano in Oct. 2014, when PU was half-size of it main rival and now No.1 local service marketplace in Brazil

ABO2O – The Gardener of Brazil O2O Ecosystem

+80 Players

Easterly Ventures – The Fund with Unique Profile

• USD $60 million Brazil-based investment fund

• Brazil’s first Internet

investment fund to provide startups with the capital, technology, traffic and experience necessary to penetrate national and international markets

• 10~15 Brazilian startup companies to be invested, with min. ticket of U$1MM