AdMART Case-Study

Submitted By: Ranjeet Kumar Singh(11BM60068)

Introduction

• Started in early 1999 with Groceries and Electronic products businesses

• Target- Market worth HK$55 billion per year

• Online purchase and delivery

• Direct competition with entrenched brick & mortar retailer stores - Park’N Shop and Wellcome.

SWOT Analysis

Strengths• Saved on retail store setup and

maintenance cost.• Promotion through owner’s

other well established newspaper business

• Deep pockets• Enjoyed good brand recall• First mover advantage• Virtual credit cards scheme

increased customer base• Convenience offered• Widespread reach(95% area

coverage)

Weaknesses• Lack of cooperation from local

distributors.• Unreliable quality of imported

goods• Traditional buying culture• 24X7 retail store in all

neighbourhoods.• Small order size making

delivery unprofitable• Low internet penetration• Low efficiency due to

distributed warehouses• Inabilities to lower prices of

groceries due to contracts

SWOT Analysis……(contd)

Opportunities• Ability to cater to tech-savvy &

busy customer segment• Cost benefits derived from non-

requirement of retail stores can be passed on to the end-customers

• Scope to expand product portfolios

• Future tie-ups with the established brands

• Horizon wise expansion of the premier product

Threats• High entry barriers to the

market

• Stiff Market competition from established player.

• Replication of the model was easy

• Deep pocketed competitors

Lessons Learnt

 

•Tie-ups with the suppliers should be established before hand and the relationship should be maintained properly.

•Extensive research to make sure that the idea will work out as planned.

•Product quality is of utmost importance and should not be compromised.

•Important to establish and maintain healthy customer relationships.

•Contingency plan should be put in place

Amazon.com & ADMART

• The mode of ordering and delivery for both Amazon.com and AdMART is same, but the market to which they cater was different.

• Amazon.com charged for shipping whereas AdMART had free shipping.

• Product quality was more relevant in case of AdMART as compared to Amazon.com

• Amazon.com offered a greater choice of products vis-à-vis its competitors as compared to AdMART

• Amazon.com established extensive collaborations with its suppliers which ADMART was lacking