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Supermarket Cyber Storm: Where AdMart Went Wrong,
Case Study assignment submission.

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  1. 1. Prepared By: Abhinav Gupta (11BM60015)Jaya Prakash Jain (11BM60033) Srinjoy Saha (11BM60075) Sovan Nayak (11BM60077)Abhishek Ranjan (11BM60117)
  2. 2.  Established in 1999 by Mr. Jimmy Lai Chee- ying, a Hong Kong based businessman. A direct marketing company that sold groceries through the Internet and phone-in orders. On-line shopping and free home delivery service.
  3. 3.  Venture by a well established businessman. First to enter into cyber shopping in Hong Kong. Low infrastructure cost. Huge Distribution channel and free home delivery service. Free promotion on “Apple Daily”, one of the best selling newspaper dailies in Hong Kong. Products offered could also be quickly changed based on market demand and competition.
  4. 4.  Distribution system was complex and costly to administer. No fixed agreement with the local wholesalers. Goods from unreliable sources leading to quality concerns. Limited variety of goods < 9000 SKUs.
  5. 5.  Incompetence in meeting customer order. Highly inefficient use of labor. Shortage of labor at peak hours leading to unsatisfied customer. Lack of coherent public relation campaign. No fulfillment of promise of money-refund.
  6. 6.  Favorable market segment > 2m internet user. Increasing demand for internet sales. Newly available virtual credit card facility. HKs were too busy to shop. Lack of good transport facility for the customer.
  7. 7.  High entry barrier – Duopoly in retail market. Not much technology – other bigger player can follow the same easily. Cut throat price war – had to sell product below cost price. Retail price restriction by suppliers and wholesalers. Public’s fear for online fraud.
  8. 8.  Try to target a smaller segment first and gradually build the business. Requirement of proper market research. Co-operation with the suppliers and wholesalers. Optimized distribution and delivery system. “Walk the talk” policy – Customer relationships management. Efficient use of labor resources. Should have a concrete contingency plan.
  9. 9.  Targeting - Started the business by targeting the appropriate segment. Customer Value - Brought value to the customer through better customer service, better pricing and adequate information. Supplier Relationship - Forged alliance with large number of high profile retailers. Product Range - Offered wide library of products at very competitive price. Customer Willingness - Western countries were more comfortable with online shopping. Review System – Customer views were given importance and corresponding improvements implemented.