Ladies and gentlemen, thank you for standing by. I am Myrtle, your Chorus Call operator. Welcome and thank you for joining Hepsiburada conference call and live webcast to present and discuss the third quarter 2021 financial results. All participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a question-and-answer session. . At this time, I would like to turn the conference over to Ms. Helin Celikbilek, Investor Relations Director. Ms. Helin Celikbilek, you may now proceed.

Thank you, operator. Thank you for joining us today for Hepsiburada's third quarter 2021 earnings call. I'm pleased to be joined on the call today by our CEO, Murat Emirdağ, and our CFO, Korhan Öz. The following discussion including responses to your questions reflect management's views as of today's date only. We do not undertake any obligation to update or revise this information except as required by law. Certain statements made on today's call are forward-looking statements. Actual results may differ materially from these forward-looking statements. The earnings release has been filed with the SEC on a Form 6-K and is currently available on the SEC website and on our Investor Relations website. Please refer to today's earnings release as well as the Risk Factors described in the Safe Harbor slide of today's presentation, today's press release, the 6-K, our prospectus filed with the SEC on July 1, 2021, and other SEC filings for information about factors which could cause our actual results to differ materially from these forward-looking statements. Also, we will reference certain non-IFRS measures during today's call. Please refer to the appendix of our supplemental slide deck as well as today's earnings release for a presentation of the most directly comparable IFRS measures, as well as the relevant IFRS to non-IFRS reconciliations. As a reminder, a replay of this call will be available on the Investor Relations page of Hepsiburada's website. With that, I will now hand it over to our CEO, Murat. Murat Emirdağ: Thank you, Helin. And welcome, everyone. Before we dive into the quarterly update, some of which we shared in our pre-announcement on November 1, let me start by saying that we, the Hepsiburada team, acknowledge the concerns of the market. Given the headwinds we previously reported on, we had a challenging Q3…

. The first question comes from the line of Tiron, Cesar with Bank of America.

I have four questions, if that's okay. The first one would really be on the competition. And probably if you can explain a little bit more, how does it impact the business, being specific both about online and offline players? And given that trend to capital raise was known since 2Q 2021, did you maybe react a little bit with a lag to this incremental competition and that's why we're seeing this incremental spend in Q3. So, that was the first question. Second question. What was your 3P take rate in 3Q and how much was it down sequentially? Third question. You seem to have stimulated GMV growth through a much larger-than-expected advertising spend in the quarter. What do you think happens when you reduce advertising spend? Or are you planning on keeping advertising to GMV at high-single digit mark going forward? And then, on the fourth question, related to your comment on liquidity and no need to raise capital in the next 18 months, is that only valid for the next 18 months? So, should I consider that the cash burn of the company could be similar to Q3 going forward for the next couple of quarters? Murat Emirdağ: In terms of the competition and actually how we reacted to it, I guess it is fair to say, when actually Alibaba raised their fundraising after our IPO, that was influenced by competitive landscape in the market and also . There's also market headwinds because of this marked slowdown in the growth rate and other macro dynamics as well. So, all these combined, we needed to stimulate the customer demand to address the challenges, which means actually we heavily used customer discounts. Then we also increased the amount of advertising to ensure we also get a fair share of voice…

More on the stickiness of consumers, et cetera. Murat Emirdağ: This is a very good question. Also, like Korhan said, we have already begun tasting some efficient tools and tactics, with increasing muscle of our data science and marketing analysis. But also, let me remind you, in our key differentiators and strongholds, we are not just relying on marketing, as you know. All the four components of our growth drivers are growing – you saw the numbers – customers, frequency, merchants and selection. It is a very healthy dynamic in terms of the growth. And it's been happening. So, basically, when I refer to our other areas that are supporting our growth, I want to emphasize the fact that we are a household brand name, 99% total awareness, we are the only one with a strong hybrid model, 1P and 3P. We actually operate this on – I don't want to replicate – but the customer and merchant differentiated experiences and we can go in more depth in other questions. As you know, the frictionless return is unique to us, minimal services for customers, and many more unique services for merchants we offer in that package. And then, we are, as you saw, leading in terms of AMPS , which is a great asset for us where we differentiated our experience. And, of course, our nationwide robust logistics coupled with our assets like Pay, grocery on demand, HepsiExpress, HepsiJet and advertising and so on, we feel we have many levers to drive the growth across the platform, but not just marketing. And also, we are definitely going to introduce more efficiency as we go forward.

The next question comes from the line of Adisa, Miriam with Morgan Stanley.

Firstly, just another question on competition. So, I think you mentioned that you've lowered that discounting in September and October. Is that because that the market is becoming slightly less competitive? Or is it more you're just focusing more on profitability and getting better efficiency? If you could just comment on what you're seeing in the last couple of weeks, that would be great. And then also, on competition as well, are you seeing that it's mainly just competition around marketing spend and then also discounting, but are there any other gaps that you're seeing that's emerged in terms of your proposition versus peers, aside from just the discounting and high marketing spend? And then finally, if you could just comment on the customer behavior that you're seeing at the moment in terms of order frequency, and particularly the cohorts that you've acquired over COVID? How are those cohorts comparing to your prior cohorts? Murat Emirdağ: Maybe I can start from maybe the last question first, which is referring to the customer behavior in terms of project frequency, if I'm not mistaken. Basically, in terms of the drivers of our customer dynamics, you can see both the customer numbers, active customer numbers and the order frequency increase. And this is continuing in a healthy way. And also, you can see the GMV per customer also rising. That is actually the way we see in terms of the overall dynamics here because the GMV per customer also increased by 33% as we saw in the numbers year-over-year. And also, going back to the customer behavior, in this dynamic right now, actually, right now – I want to make sure I get all the questions you asked. The other question you actually asked was lowering discounts. Are we getting better efficiency? I…

Just to clarify on the competition point, is it that you're not seeing competition let up in the last couple of weeks or you are to lower the discounts? Murat Emirdağ: The competition is still intense. We should be definitely clear about this. The intensified competitive landscape remains, as we speak, in Q4 as well. And as you can imagine, this is the quarter where the seasonality is high. We described how major role this quarter plays in the total year. And therefore, from offline/online, it is fair to expect increased competition this quarter. But despite that, we are both delivering and trying to get more efficient. And also, try to differentiate with our key differentiators. So, basically, we are trying to not just differentiate, also get more efficient and increase the gap between us and competition in our favor. All these things happening at the same time, and the competition remains intensified.

The next question comes from the line of Ünal Cem with Goldman Sachs. Cem Ünal: I have a couple of questions. The first one is related to the fourth quarter and how is the operating environment in fourth quarter, given that the guidance indicates 18% year-on-year growth in the fourth quarter? And also, what is your initial thoughts on the growth and profitability as well as competitive environment into 2022? more close to third quarter in the next year or you will reduce CRM expenses largely in the coming year? And my second question is also related to the first one. Do you see any slowdown due to volatile purchaser environment and how it's been affecting the merchants and their pricing capability on the product they sell? Obviously, volatile Turkish Lira can affect this negatively which might result in slowdown due to lack of availability. And finally, my third question. My third question is related to the market share of Hepsiburada. So, even from the – as ecommerce data system in Turkey year-on-year growth numbers in first half 2021 for the e-commerce market in Turkey on a year-on-year basis where the market grew by 75% year-on-year in first half, why has Hepsiburada GMV growth was at 60% year-on-year in the same period. We know that this is not an addressable market for Hepsiburada, which includes many other parts like sports betting and lottery gaming cross-border. But do you have any insight in your market share either year-to-date or in the first half at least? What was the growth of the addressable market in the first half 2021 on a year-on-year basis at least? Murat Emirdağ: Let me start maybe from the last question and go the other way around. In terms of market share, we share your concern in terms…

The next question comes from the line of Kılıçkıran, Hanzade with J.P. Morgan. Hanzade Kılıçkıran: I have some follow-up questions and also new questions. The first one is about your take rates. You presented a chart that shows stable take rates on a weighted average perspective. So, can you please also help us to understand the change in GMV per category because I'm trying to understand whether you are also cutting the take rate per category or this is stable mainly because of a shift in the GMV? And the second one is about your inventory levels. You have very low 1P retail margin in the third quarter. But there is not a substantial Turkish lira depreciation. Do you have any inventory that you may benefit on the margin side in the fourth quarter? And the third question is about the CapEx cycle. We don't see much increasing the CapEx so far. So how should we think about it, particularly in 2022? And final is about your actions to improve the gross contribution. Can you please let us know about this plan to action? So how are you planning to improve the gross contribution next year? And maybe the final question is I really wonder the impact of the growth rate on the order frequency because they absorb some sort of ecommerce in the order by the increasing grocery spending or you are also seeing customer buying more on other categories as well? Korhan Öz: Let me start with the first one about the take rate. Yes, compared to last year, same period, our take rate, means our commission rate that we are charging to our merchants, does not change significantly. That has been an investment period during Q1, Q2, but those are improved and we are back to our…

. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to CEO, Mr. Murat Emirdağ, for any closing comments. Thank you. Murat Emirdağ : Thanks so much, everyone. Before we end the call, I want to reiterate that we acknowledge your concerns and take them very seriously. And we remain confident in our market opportunity and long-term value proposition because we know the opportunity and the fundamentals of the business remain strong. And actually, following our IPO, while competition and near-term market conditions have become more challenging, two things have not changed. The significant long-term market opportunity in the digitalization of the Turkish market. And the other one actually is our firm belief in our business model. So we are committed to deliver on our drivers of sustainable growth, key differentiators, strategic assets that we discussed and valuable services for customers and merchants with a disciplined cash management, creating long term value for our company and shareholders. We look forward to speaking with you again in the next quarter's call. Thank you, all.

Ladies and gentlemen, the conference has now concluded and you may disconnect your telephone Thank you for calling. Have a pleasant evening.