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    This Study Resource Was: Chip The Kart

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    musafir
    ChipKart emerged as a strong e-commerce player in India by overcoming reluctance to use credit cards through accepting cash on delivery. This innovation attracted Amazon's interest in the Indian market potential but also posed competitive risks. An analysis of customer demographics and purchasing trends showed that younger customers tend to purchase lower-priced items while older segments spend more per order, and helped determine Amazon's market entry strategy of targeting cheaper items for younger credit card users to avoid direct competition with ChipKart.

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    This Study Resource Was: Chip The Kart

    Uploaded by

    musafir
    27 views4 pages
    ChipKart emerged as a strong e-commerce player in India by overcoming reluctance to use credit cards through accepting cash on delivery. This innovation attracted Amazon's interest in the Indian market potential but also posed competitive risks. An analysis of customer demographics and purchasing trends showed that younger customers tend to purchase lower-priced items while older segments spend more per order, and helped determine Amazon's market entry strategy of targeting cheaper items for younger credit card users to avoid direct competition with ChipKart.

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    Case_study_ChipKart.docx

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    ChipKart emerged as a strong e-commerce player in India by overcoming reluctance to use credit cards through accepting cash on delivery. This innovation attracted Amazon's interest in the Indian market potential but also posed competitive risks. An analysis of customer demographics and purchasing trends showed that younger customers tend to purchase lower-priced items while older segments spend more per order, and helped determine Amazon's market entry strategy of targeting cheaper items for younger credit card users to avoid direct competition with ChipKart.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    27 views4 pages

    This Study Resource Was: Chip The Kart

    Uploaded by

    musafir
    ChipKart emerged as a strong e-commerce player in India by overcoming reluctance to use credit cards through accepting cash on delivery. This innovation attracted Amazon's interest in the Indian market potential but also posed competitive risks. An analysis of customer demographics and purchasing trends showed that younger customers tend to purchase lower-priced items while older segments spend more per order, and helped determine Amazon's market entry strategy of targeting cheaper items for younger credit card users to avoid direct competition with ChipKart.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    Case study #2

    CHIP THE KART


    Amazon Inc. has been considering an India market entry for some time,
    although it has been skeptical of the adoption of credit cards and the
    migration to online shopping in India. Meanwhile, a local start-up
    company, ChipKart, has emerged, and created a strong, well-reputed
    Indian e-shopping market. It overcame the reluctance to use credit cards
    online through the simple innovation of accepting Cash on Delivery
    (COD) for its merchandise. ChipKart trained the delivery & logistics team
    to become a part of the sales process.
    This innovation has awoken Jeff Bezos, CEO of Amazon Inc., to the
    possibility of market potential in India. However, leery of engaging in an
    early, head-on battle with ChipKart, Mr. Bezos decided that he would like
    to know which are the right customer segments and product segments to
    target for initial entry into the India market without arousing a
    competitive battle with ChipKart early on.

    m
    You have been hired as a Consultant to help Amazon decide on

    er as
    what direction to take. How will you go about it?

    co
    Refer exhibits given below, that shall help you reach conclusion:

    eH w
    o.
    rs e
    ou urc
    o
    aC s
    v i y re
    ed d
    ar stu
    sh is
    Th

    EXHIBITS

    This study source was downloaded by 100000829449267 from CourseHero.com on 08-21-2021 03:49:27 GMT -05:00

    https://www.coursehero.com/file/64995172/Case-study-ChipKartdocx/
    m
    er as
    co
    eH w
    o.
    rs e
    ou urc
    o
    aC s
    v i y re
    ed d
    ar stu
    sh is
    Th

    This study source was downloaded by 100000829449267 from CourseHero.com on 08-21-2021 03:49:27 GMT -05:00

    https://www.coursehero.com/file/64995172/Case-study-ChipKartdocx/
    ----------------------------------------------------------------------------------------------------

    m
    er as
    co
    According to Nielsen’s Global Connected Commerce Survey, about 83%

    eH w
    consumers in India preferred using cash on delivery as a mode of
    payment for online purchases.

    o.
    rs e
    Consumers still dither to use credit cards due to online fraud risks.
    ou urc
    Factors that contribute COD Growth
    o

     Convenience
    aC s
    v i y re

     Familiarity with cash payments

     Less Credit Card Users


    ed d
    ar stu

     Lack of secure payment gateaways

     Fear of Online Scam


    sh is
    Th

    According to Exhibits,

    There are different purchasing trends among the different demographic


    groups, and that those differences have significant strategic implications.

    The 22-32 and 32-42 age customer segments have good credit card
    penetration. However, the younger end of the spectrum appears to be
    lower-price focused.

    This study source was downloaded by 100000829449267 from CourseHero.com on 08-21-2021 03:49:27 GMT -05:00

    https://www.coursehero.com/file/64995172/Case-study-ChipKartdocx/
    According to Exhibit C, the 22-32 age group seems to be purchasing a
    larger amount than would be expected, by value.

    According to Exhibit B and C

    Both ChipKart and the overall market skew heavily toward older
    segments, when transactions are measured by value rather than quantity.

    In both cases, this suggests that the older population is buying more
    items per order or more expensive items.

    m
    er as
    co
    eH w
    o.
    Revenue= Number of Transactions X Average Price
    rs e
    ou urc
    The highest-revenue categories are:

    1. Mobiles, Camera & Computers


    o

    2. Home Entertainment
    aC s

    3. Clothing, Shoes & Jewelry


    v i y re

     It might be challenging to set up cash on delivery (COD) initially. It


    ed d

    requires finding, hiring, and training a network of delivery personnel,


    ar stu

    and setting up oversight to ensure respectable quality control.


     Cash on Delivery economics do not work for certain products
    because there is a fixed shipping cost of Rs 50 which reduces the share
    sh is

    of the transactions.
     Relative to online bank and credit card transactions, the
    Th

    transaction cost 2.5% of the transaction value.


     Looking at demographics, one can deduce that older (42+)
    customer segments buy items more suitable for Cash on Delivery
    because they are purchasing higher-value shipments on average, and are
    much less likely to own credit cards.
     As a Consultant I would suggest Amazon to target younger
    segments with cheaper items, and place an emphasis on high-volume
    purchasing. It should allow only bank and credit card transactions.

    This study source was downloaded by 100000829449267 from CourseHero.com on 08-21-2021 03:49:27 GMT -05:00

    https://www.coursehero.com/file/64995172/Case-study-ChipKartdocx/
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