Services Strategy for Electronics Oct, 2012

1. Services Strategy for Electronics Oct, 2012

2. Agenda

3. India’s Leader in Services for Electronics Products • Marquee Client Base One Stop Solution in ILM1 Services • Over 16 years of experience in serving global clients including HP, IBM, Netgear, Hughes, AOC, TPV among others • Track record of cross sales and repeat business from several clients • India’s only integrated player in Lifecycle Management Services across high tech products with the capability to offer seamless services to OEMs and consumers • Presence in over 150 cities with 200 service centres, 2 repair & refurbishment centres and a 450 seat helpdesk centre • Revenue scalability potential backed by established network & skilled workforce • Recently launched Extended Warranty Services (EWS) • Leveraging existing capabilities to launch direct to consumer subscription-based tech support services • Extending its after market services and providing E-waste solutions Largest Industry Player Foray Into High Growth Segments • Service centric organization with part sales contributing to < 15% of revenue • Focus on quality and service delivery with a track record of highest ratings from customers Focus On Service Delivery • Integrated Lifecycle Management

4. InTarvo – Complete Suite of Services Across the Lifecycle of Electronics Products … Business Units

5. Pan India Presence Srinagar Jammu Mandi Phagwara Shimla Amritsar Barnala Patiala Jullundhar Chandigarh Hamirpur Ludhiana Una Bhatinda Batala Dehradun Ambala Rewari Biwani Kaithal Karnal Panipat Sangrur Delhi Ghaziabad Faridabad Hissar Sri Ganganagar Noida Gurgaon Roorkee NCR Saharanpur Bikaner Meerut Alwar Haldwani Churu Jaipur Mukundgarh Lucknow Agra Siliguri Sikar Guwahati Barielliy Bharatpur Gorakhpur Ajmer Dimapur Gangapur Kanpur Dholpur Gwalior Jodhpur Darbhanga Katihar Imphal Agartala Muzaffarpur Bhilwara Jhansi Allahabad Silchar Udaipur Kota Varanasi Darbhanga Patna Midnapore Jamshedpur Bhopal Asansol Howrah Jabalpur Indore Ahmedabad Kolkata Ranchi Surat Nagpur Sambalpur Puri Raipur Nashik Berhampur Bhubaneshwar` Yavatmal Ahmednagar Cuttack Adilabad Thane Nizamabad Pune Mumbai Karimnagar Solapur Vizag Warangal Hyderabad Bagalkot Sangli Rajahmundry Nalgonda Mahbubnagar Vijayawada Belgaum Kurnool Guntur Panjim Ongole Margoa Hubli Nellore Tirupathi Bangalore Mangalore Chennai Vellore inTarvo centres (Owned & Partner) Pondicherry Mysore Cuddalore Salem Call Center Karaikal Erode Thanjavur Malappuram Trichy Kumbakonam Coimbatore Refurbishment Centers Madurai Kochi Kottayam Warehouses Thiruvananthapuram Nagercoil

6. Recognition Across Industry Platforms Technology Fast 50 India2007, 2008, 2009 & 2010 Technology Fast 500 APAC2007, 2008, 2009 & 2010 Best After Sales Service in IT2009, 2010, 2011 Most Promising 10 IMS Companies in India 2010 BPO Company of the Year, Domestic 2010

7. Demonstrated Quality Standards ISO 9001:2008 (QMS -Quality Management System) OHSAS 18001:2007 (Occupational Health & Safety Management Systems) ISO 27001:2005 (ISMS -Information Security Management System) OHSAS 18001:2007 (Occupational Health & Safety Management Systems) Microsoft CertifiedRefurbisher

8. One Stop Solution: Integrated Lifecycle Management Services Repair & Refurbishment Tech Support Helpdesk Infra Mgmt. Services Extended Warranty Services Field Services Technical Training E-Waste Management Installation & Commissioning

9. Blue Chip investors Sonoma Management Partners (SMP) is promoter company of inTarvo and active partner. The SMP Partners possess a unique mix of operations focused entrepreneurial, venture capital & investment banking experience. New Enterprise Associates (NEA) is the entrepreneur’s venture capital firm.30 years venture investing. NEA has been helping to build great companies since 1978. NEA committed capital has grown to approximately $8.5 billion and have funded more than 550 companies in the IT and healthcare sectors. Motilal Oswal Group, a well diversified financial services firm offering a range of financial products and services such as Wealth Management, Broking & Distribution, Commodity Broking, Portfolio Management Services, Institutional Equities, Private Equity, Investment Banking Services and Principal Strategies. IDFC Investment Advisors Limited (IDFC IAL), a wholly owned subsidiary of IDFC Asset Management Company Limited (IDFC AMC). IDFC AMC, a 100% subsidiary of Infrastructure Development Finance Company Limited (IDFC) has average assets of more than Rs. 18,000 cr (more than $3.8 billion) in the public market space under management in July 2010.

10. Marquee Client Base

11. Agenda

12. Information Lifecycle Management for Electronic Products 1 Sale of Equipment Installation & Commissioning OperatingEquipment 2 Lifecycle of aHi-Tech Product Remote Tech Help Desk Support(Voice, Web, Email) Resolution 5 4 3 E-Waste Management Repair & Refurbishment Field Services(Service Center /On-site Support) Disposal 8 7 6 Infrastructure Management Services Extended Warranty Services Hardware & Networking Training Other related services

13. ILM for High Tech Products standalone is a 10000 cr Annual Opportunity in India Total ILM Opportunity (USD Mn) Growth in underlying industries & increasing focus on services to drive the ILM market

14. ILM for High Tech Products standalone is a 10000 cr Annual Opportunity in India Total ILM Opportunity (USD Mn) Growth in underlying industries & increasing focus on services to drive the ILM market

15. Organized CDIT market (including e-tailing) is experiencing significant growth, largely led by the emergence of Tier 2 and Tier 3 markets Split of the Indian CDIT market (INR ‘000 Cr) Category split of the Indian CDIT market (2011) Secondary target market via direct channel 13% 125 201 4% Primary target market via B&Mand online channel • IT products and mobiles phones are the key categories within CDIT 43% Pop group level split of Indian CDIT market (2011) 34% • Metro – 40 L + (7 towns) • Tier 1 – 10L to 40L(28 towns) • Tier 2 – 5L to 10L (39 towns) • Tier 3 – 1L to 5L (~400 towns) • The overall CDIT market is estimated to grow at a CAGR of 13% • Primary addressable market is expected to grow to more than 3X at 36% due to shift towards organized retail • Metro & Tier 1 constitute ~60%; but Tier 2 & Tier 3 markets are leading market growth Source: Crisil, research, EY databases, Emerging trends in Indian retail & consumer 2011- Technopak Consulting, EY Research and Analysis

16. Refurbished product sale presents an untapped INR 88,000 Cr demand side opportunity Price comparison of basket across select geographies (in USD) • Despite India’s lower purchasing power, actual pricing of durables is higher than most countries • Refurbished products provide an opportunity for achieving above affordability • Refurbished goods sold at 28% of the original value will bring India at par with China on affordability of consumer durables • Penetration in India lags far behind China in terms of durable ownership • Market for refurbished products is limited by supply side factors 2009 prices Cost of basket as % of average household income in respective countries Penetration can be increased substantially by reducing the cost differential At an approximate penetration of 20% for the new market, the market is estimated to have a potential of INR 88,000 Cr Source: EY Analysis (2009), National Manufacturing Competitive Council report

17. Field services and refurbished products sale are the key opportunities in the ILM space Size of ILM Services Market in 2011 and 2015 (INR Cr) CAGR 15% CAGR 130% CAGR 60% Field services Repair & Refurbishment Extended Warranty • Fairly fragmented opportunity, where scale of operations and brand could be differentiators • Collaboration with OEM could provide stability in revenues, while servicing out-of-warranty products could act as a margin driver in the portfolio of a field services company • Demand for R&R services is contingent on the refurbished products market • R&R services for OEMs/retailers is a large opportunity for 2015 driven by the potential derived demand of refurbished products • Online retailers (Letsbuy, Infibeam, Gadget Guru) as well as B&M players (Croma, Reliance Digital) have started offering EWS • Adoption of EWS is low, but growing – developed markets such as US have attach rates of 40-50% on CDIT products • Competitive pricing is a key requirement to drive penetration Source: EY database, Industry discussions & EY analysis

18. Potential combined opportunity could be ~ INR 38,700 Cr, of which INR 14,100 Cr is immediately addressable Currently addressed 1 INR 14,100 Cr 2 Installation & Commissioning INR 24,600 Cr 3 Other opportunities Extended Warranty Service Cross-selling accessories Brand Tie-ups Refurbished products Field Services & Warranty Management Chroma Online Tech Support Home AMC Currently not addressed Low Capabilities High Capabilities Services related opportunities Product related opportunities Source: EY analysis

19. Market trends globally highlight tech support and online recommendation engines as key areas of focus for the Indian market Market propositions Global Examples SMB Focus: Separate team focusing on bulk sales and unique service packages for SMB’s While Best Buy has set up a separate vertical focusing on SMB sales, it does not seem to have worked well due to stiff price competition from OEMs Best Buy has launched Buy Back schemes for most of the CDIT product categories starting at $10. Amazon and Sears have a trade-in scheme linked to repeat selling Buy Back: At an extra cost, the Seller enters into an agreement to purchase the product at the end of the stipulated time at a pre-defined percentage of price Tech Support: Online and Remote Technical support for soft services offered to the customer as a separate service package Geek Squad, iYogi, Support.com & SquareTrade have a rapidly growing consumer base purchasing this service with a less than 2% requirement of offline support Free Re-cycling: The seller offers free re-cycling of the outdated and old electronics (free pick-up if a new product is purchased) Dixons, Amazon offer free re-cycling of products if replacements are purchased through them; else shipping is borne by the consumer Store Pick-up:The consumer has an option to pick up the product purchase online at the B&M store of the seller / alliance partner A big trend observed in developed countries is the concept of “Store Pick-Up” for products purchased online. Nearly 15-20% opting for this option (higher for DVDs, Games, etc) for Best Buy Online sales push through recommendation engine: Offered by major e-tailers for recommending products based on online shoppers buying/ searching pattern Amazon, Netflix, Pandora have built their recommendation engines to boost sales. Amazon claims 30% of its sales are generated by its recommendation engine Home AMC:Home AMC packages are offered by service providers to cover a basket of CDIT products Estimated at $ 1.5 bn (appliances and civil), two key players constitute 53% of the US Home AMC opportunity – Home Shield and America First. It is a fairly evolved service offering in US

20. Agenda

21. Benefits of Services AcrossLifecycle of an Electronics Product eWaste disposal Installation Repair & refurbish-ment Sale • Largest contributor of service revenue • Cross selling opportunities at home • Increased sale of existing products • New high margin revenue stream • Payments from OEMs and customers per service call • Cross-selling, up-selling opportunities • Payments for repair services • Product upgrade offers • Reselling to urban poor • Charge for electronics disposal • Recovery of valuable parts Tangible Benefits Product Warranty Tech support Intangible Benefits • Gain understanding of customers in context at home • Serve both tech savvy segment and non-tech savvy segment • Tighter relationships with OEMs to develop win-win partnership • Serve a new large market segment that is increasingly becoming more affluent • “Green” branding In-warranty Support Out of warranty support Improve customer stickiness Build brand in the community Get customer referrals Develop a customer-centric mindset Capture customer insights Gain strategic differentiation

22. Enable an Integrated Offering for Owning Customer Problems Across the Entire Lifecycle of Electronics Products • Supported by inTarvo In-store sale /kiosk order supp. by inTarvo Service Center • Implemented by inTarvo + Online sales supported by inTarvo on phone /chat Warranty / EWS mgmt by inTarvo Deliver from warehouse Installation Sell Tech Support Sell EWS (insured by …) Support services by inTarvo Home & SMBs Provide Financing Repair & refurbishment by inTarvo eWaste recycling by inTarvo Sell refurbished

23. Case Study: Geek Squad’s Strategic Advantage to Best Buy Computer Repairs (2003) Strategic Differentiator (Now) • Key Stats1 • 20,000 agents • $3b high margin revenue (6% of Best Buy’s total revenue) • 10 service calls/day per agent at average of $200 each • 95% success rate • Key Stats1 • 60 agents • $3m revenue • Competition • Direct competition from Circuit City • Price competition from Amazon.com and other online electronic retailers • Competition • Circuit City was forced into liquidation in 2009 • Getting away from pure price competition to competing on product + service • Customer Service Mindset • Contextual Selling: Determine the customers need and use of the product to suggest products and explain benefits of peripherals (e.g. printers) and accessories (e.g. car chargers) • After sales service is a high margin revenue stream • CustomerServiceMindset • Direct customers to products that they are asking for • After sales service is a necessary cost center • Intangible Benefits • Customer loyalty /referrals • Ability to serve under-served segments, especially non-tech savvy customers • Cool image from the Geek Squad’s subtle fun experience mimicking an “agent” • Capturing customer insights over complete lifecycle of a product • CNBC profile of Geek Squad on Jan 19, 2012

24. Case Study: Geek Squad