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JUNE23,2016

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

London Technology Week: Report 1

KeyTakeaways • Londonwasnamedthemostconnectedcityintheworldatthe

launchoftheevent.

• HealthTechforpreventionanddiagnosisfunctions isoneofthefastestgrowinganddisruptivetechnologysectors.

• By the end of 2020, 53 million smart meters, alternatives toanalogenergyandgasmeters,willbe fitted in theUK–up fromthecurrentthreemillion.

• Light Fidelity (li-fi) is expected to replace wi-fi in the next fiveyears.

This week, the Fung Global Retail & Technology team is attendingLondon Technology Week, June 20–26, an event supported by theMayorof London. In this third yearof the gathering,more than250events took place around the city. Here, we summarize our keytakeawaysfromthefirstthreedaysoftheevent.Wewillhaveawrap-upreportattheendoftheweek.

London Strengthens its Position as a Global Tech Hub Industry organization,Wireless Broadband Alliance (WBA), launchedJune20as“WorldWi-FiDay.”Tomarktheinitiativeandtohelpbridgethe digital divide, they announced the results of their “Mapping theUrbanUnconnected”research.Of18 largecities,Londonwasnamedthemostconnectedintheworldwithonly8%oftheurbanpopulation

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JUNE23,2016

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

unconnected.Otherselectedmajorcities’proportionofunconnectedurbanpopulation,accordingtothestudy:

• Tokyo:13.9%• Paris:16%• NewYork:27%• MexicoCity:27.6%• Johannesburg:50.1%

Many industry leaders at London Tech Week mentioned a recentstudybyErnstandYoung, commissionedby theHMTreasury,whichhighlightedtheUK’sandLondon’sstatusasa leadingfinancialcenterand technology hub. According to the study, the UK financialtechnology (FinTech) sector generated approximately £6.6 billion(US$10.1 billion) in revenue in 2015 and employed 61,000 people,morethananyotherregionintheworld.

On the first day of the event, London & Partners, the officialpromotionalcompanyforLondon,announcedfindingsof itsresearchthat showed by 2036, technology could completely replace cash inLondon. In 2014, London’s buseswent completely cashless and nowonlyacceptcontactlesspaymentmethods.

RussShaw,thefounderofTechLondonAdvocates,believesLondonistheglobalcapital forso-called“FashTech”–the intersectionbetweenfashionand technology.He said SiliconValley is often referred to asthe global technology hub, with London ranked in the top sixtechnology hubs globally, and leading in the creative technologysector. Shaw noted in order to support growth and attract talent,private and public sectors need to invest in providing connectivity,transportationandworkplaces.Globaltechnologyhubs,includingNewYork, London and Hong Kong, can be very expensive places forstartupstosetuptheirbusinesses.

Disrupters: HealthTech and Smart Meters AtabusinessseminarorganizedbyInvestHK,KarenWinton,ManagingPartner at Nest.vc, which was the first incubator company in HongKong,saidhealthtechnologyisamongthefastestgrowingtechnologysectors globally. According to the World Bank, healthcareexpendituresasapercentageof totalGDP in2014was17.1% in theUS,9.1%intheUKand5.5%inChina.Medicaldeviceswithfunctionssuchaspreventionanddiagnosisareexpectedtodisruptthemedicalindustry.

At a Smart Home conference held by techUK, Claire Maugham,Director of Policy andCommunications at Smart EnergyGB, said thenumberoffittedsmartmetersintheUKwillincreasefromthecurrentthreemillionto53millionbytheendof2020.Shesaidtheadaptationof smart home technology has been significantly slower than manyothertechnologysectors,despitethefactthatpracticallyeverypartoflife is already digital in one way or another. Increasing numbers ofconsumers prefer the pay-as-you-go type of service to pay for

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JUNE23,2016

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

electricity, because many people do not trust energy companies orbelievetheirmeterisaccurate.

Regardingdatasecurity,Maughamsaidonlyasingledigitpercentageof users donotwant to share their smartmeter data to the serviceproviderbecausenofinancialorotherpersonaldataisstoredintheseproducts.Someofthepanelistsattheeventhighlightedhowmanyofthe telecommunications companies have become too obsessedwithuserdatabecause theyhaveaccess to their customers’privatedata,whichcanbeusedfortargetmarketing.

Smart Homes Market Growing Slowly At the IFSEC International security econference, Michael Philpott,Principal Analyst at Ovum, said the smart home market is growingsteadily, but the growth is more stagnant than in many othertechnologysectors.Helistedkeyreasonsforthis:

• Smart homes need to make life fundamentally better orcheaper.

• Moreflexiblesolutionsmustbedevelopedtomeettheneedsof different market segments. Many companies currentlyofferone-size-fits-all smarthomeproducts; consumerswantmoretailoredsolutions.

• Companies should remove concerns that create purchasingbarriers: reliability, security, health and safety, and trustedbusinessethics.

Philpott also noted consumers are often unaware of the benefits ofsmart home appliances. He said when marketing smart homeproducts, companies should sell use-cases, not products, andmentioned Philips as an example. The technology company usessloganssuchas“Livehealthier,”“Decorateyourhome”and“Enhancetheexperience”tomarketitssmarthomeproducts.

Michael Philpott from Ovum, believes revenue growth in the smart homemarketcanbeachievedbyupsellingtoexistingcustomers.

Source:FungGlobalRetail&Technology

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JUNE23,2016

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

Li-Fi to Replace Wi-Fi Over the Next Five Years PeterMason fromTavcomTrainingbelievesLightFidelity (li-fi) is themost exciting technology advancement in the last 40 years. Li-fitechnologyisexpectedtoreplacewi-fioverthenextfiveyears.Similartowi-fi, li-fi is a system that runswireless communications except ituses LED lightbulbs to enable data transfers and can providesignificantly faster wireless communications than wi-fi. Key li-fihighlightsMasonmentioned:

• Dubaiwillbethefirstcityintheworldwhereli-fiistestedona larger scaleby the roll outof li-fi technologyon the city’sstreetlights.

• FutureiPhonesmaybeincorporatedwithli-fitechnology.• Solar panels used as routers are projected to be viable by

2017.

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JUNE23,2016

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

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