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ACE Challenge 2015

Amazon Confidential

Preliminary Round: ACE Case Breakers


Case Study: Consumer Business
Introduction
Karan is a Senior Manager in the Consumer Business leadership team for Amazon.in and is working on a 3
year plan for Amazons strategy in India. Karan has been fascinated by the way the Retail sector has evolved
in India. After completing his MBA from a leading Indian institute, Karan joined Amazons Consumer
Business Team in India as a Category Manager. Karan loved the e-Commerce space. He was one of the first
employees in the India business and his passion for solving customer problems led him to grow swiftly
through the ranks.
The Amazon.in Story
Amazon.in started in June 2013 as
an online marketplace for Books,
Movies & Electronics. Amazon.in
has since expanded its offerings to
become the largest online store
with over 25 million products
across hundreds of stores. Within
a span of 2 years, Amazon.in has
been able to create a vibrant
marketplace with thousands of
sellers offering everyday products
at low prices to its customers. They
have set the benchmark for premium delivery experience with two, next and same-day guaranteed delivery.
The Logistics Team is pushing the envelope with Amazon Pickup points in 50 cities, Sunday delivery in 100
cities, and the recently launched 3-hour delivery with the Kirana Now pilot.
Indian e-Commerce Industry
According to a report by eMarketer (Dec 2014), Retail sales in India have increased from $635.25 billion in
2013 to $717.83 billion in 2014, growing at a rate of 13%. It is expected to touch $818.33 billion in 2015
registering a Y-O-Y growth of 14%. By 2018, total retail volume will grow to $1,244.58 billion, growing
steadily at 14-15% annually. Retail e-Commerce sales in India, on the other hand, which were a meager
$3.59 billion in 2013 grew to a somewhat better $5.30 billion in 2014, a Y-O-Y growth of 47.6% as compared
to 55.6% over the previous year. In the year 2015, total online retail in India is all set to touch $7.69 billion,
growing at a rate of 45.2%.

Amazon Confidential
This case and the numbers published in this case are not representative of any Amazon businesses within India or in any
other region where Amazon has offices or operations and should not be used for any public or media consumption.

ACE Challenge 2015

Amazon Confidential

Karans Problem
While working on the 3 year plan for Amazons Consumer Business in India, Karan comes across a study
done by a Marketing Intern at Amazon. The report talks about some key trends in the changing Indian
landscape, new business opportunities that could fuel the next growth phase in the e-Commerce space in
India and a largely under tapped consumer base with multiple new problems that Amazon could solve for
its customers.
Some excerpts from the report are given below:
According to the study conducted, online shopping of physical goods in India will grow to $17.52 billion by
2018 and the number of online shoppers in India will more than double to 40 million. Contrary to popular
belief, it is the Tier 2 and Tier 3 towns that have been driving the growth of e-Commerce in India and they
already contribute to a significant portion of e-Commerce sales. A growing class of aspiring consumers who
hitherto did not have access to the big brands in their cities or towns are driving this growth. Other factors
fuelling the growth are a higher penetration of internet via mobiles in these towns and heavy discounts given
by e-Commerce players making products affordable. Innovations like Cash on Delivery and EMI options have
further made online shopping possible for the earlier left out population in India.
The right kind of category focus is one of the key challenges e-Commerce companies face. E-commerce has
disrupted a number of large categories, including media, electronics, apparel, and home furnishings. If you are
shopping in these categories, theres a strong and rapidly growing chance that you are going to buy them
online. E-commerce is still a very tiny portion of total retail that happens in India. So yes, theres a lot of
headroom to grow.
An independent third-party survey conducted across 40 towns of India revealed that nearly 66% of this growth
was coming from women consumers who accounted for 21% of the online shoppers, almost doubling their
share in the past one year. The average basket size of women consumers is 4 whereas it is 3 for men. Also,
women consumers had a higher purchase frequency as compared to men.
After reading the article, Karans thought went back to the strategy that he was drawing out. Amazon saw
a strong need to dive deep into the changing market dynamics and design programs and products that are
differentiated and provide women customers in Tier 2 and Tier 3 towns, a unique shopping experience that
was not available to them earlier.
He had to answer 3 key questions:
Q1. What specific target consumer group should Amazon focus on while making its 3 year strategy?
Karan was not sure if he should be focusing on a single specific target group (TG) or build a strategy that
is more generic in nature.
Q2. What categories/selection should he focus on for the selected TG and why? What should the
selection acquisition strategy be for Karan? The list of categories are mentioned here:
Amazon Confidential
This case and the numbers published in this case are not representative of any Amazon businesses within India or in any
other region where Amazon has offices or operations and should not be used for any public or media consumption.

ACE Challenge 2015

Amazon Confidential

http://www.amazon.in/gp/site-directory/ref=nav_shopall_fullstore , your solution need not be limited to


this list.
Q3. Karan needs to come up with a strategy for customer acquisition in these regions for the selected TG.
With the TG (single or multiple) selected, he also had to answer the following:

How will Amazon provide a differentiated shopping experience to this TG?

How can Amazon build loyalty with this TG in the long run?

Key Guidelines:

Your solution should not exceed 3 pages in all, preferably one page per question. Appendix can
be extra for only providing data supporting your recommendations/solutions. Recommendations
given in the appendix will not be considered for evaluation.

Original ideas would be preferred over suggesting existing Amazon programs/features available
or implemented globally.

Provide the source for every data point provided in the solution.

Clearly state any assumptions you make while giving recommendations/solutions.

In case of any financial model you want to provide (not mandatory), please attach the excel sheet
separately along with the 3 pager solution.

Amazon Confidential
This case and the numbers published in this case are not representative of any Amazon businesses within India or in any
other region where Amazon has offices or operations and should not be used for any public or media consumption.