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WELCOME

AdMart Presentation

Presented By:
Mohit Jalan
Mohit Kharkwal
Chirag Patil
Gaurav Bhattacharjee
Prakash Bansal
Introduction
AdMart

AdMart was started in early 1999, and its service began six moths later.

It was started in Hong Kong as an internet based grocery retailer which offered home delivery
services. It later expanded to include electronics and office supplies. However, after 18 month period
of intense competition, AdMart ceased trading on 11 December 2000. Mr. Lai, the owner of AdMart,
attributed the failure to overconfidence and lack of a viable business strategy.

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Mr. Jimmy Lais
Business Ventures

Timeline

Giordano
Launched Giordano in 1981,

a Gap-style retail chain

Next Media
Entered into media business in 1989
with Next magazine

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Apple Media
Newspaper Apple daily in 1995

AdMart
Started AdMart

Dot Com Doom


AdMart resulted in loss of over 900 million HK dollars for Mr. Lai and cemented the strong hold of the ParkN Shop and
Wellcome Supermarket in Hong Kong. It also led to loss of jobs of over 1500 people.

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AdMart
The next big adventure

Mr. Lai was tremendously successful in his ventures in Giordano, Next magazine and Apple
daily. He used them as his marketing muscle and the cash they generate as his war chest.
He will also use these cash cows later to fund his ambitious plan to open AdMart.

The pro-democracy tycoon is the founder of Next Media, the loudest voice
of anti-Beijing protest in Hong Kong. Mr. Lai was on the front line during
last years street protests, braving tear gas and pepper spray.
-Bloomberg

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Prime Opponents
Retail Goliaths

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Strengths
SWOT

Advertising muscle Savings on Retail Deep Pocket Delivery Network


Earlier investments in Cost saving due to lack Continuous supply of Tremendous workforce
Next magazine and Apple of expensive Brick and cash from other to provide speedy
daily Mortar store businesses delivery

Description
Main strength of AdMart was the marketing and finance channel that was provided by the previous ventures of its owner.

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Weakness
SWOT

es

Unreliable Sources Nascent Internet Inefficient Channel Prices


Lack of reliable sellers People were wary of Distribution channel was AdMart was unable to
caused dismal quality of online purchase and highly inefficient and compete to become a
products and adds to found lack of bargain a bloated cost leader
cost deal breaker

Description
Biggest weakness of AdMart turned out to be lack of support from the local suppliers. It caused unreliable quality in products and
increase in prices.

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Opportunit
SWOT

ies

Place Channels Busy Customer Internet


Honk Kong is financial Multiple channels Potential customer is Swiftly increasing
powerhouse of Asia (phone, email etc) for very busy to go and internet user base
and offer tremendous ordering leading to purchase from a local
business opportunities greater market capture store

Description
Biggest opportunity emerging was to capitalize on the rising internet penetration in Hong Kong. Another one was to bank on the
limited time the customer had to physically go and shop on a local store.

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Threats
SWOT

Opposition Replicable Model Price War Satisfaction


Pre existing market AdMart model was Deep pocketed Faults at operations
leaders ready to easily replicable so competitors ready to level causing bad
destroy new players differentiation was at slash prices and snuff word of mouth
risk out competition

Description
The well established duopoly and the strong hold they had on the local dealers was the biggest threat to the AdMart.

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0
Major Differences

ParkN Shop Wellcome Super


AdMart
market
Online Store

Cost leadership

Deep Pockets

Robust Suppliers

Quality Leadership

Robust Distribution

Happy Customers

Bargain hunting

SKUs <9000 9000 - 20000 9000 - 20000

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Where AdMart went
Lessons from AdMart for other B2C in Asia

wrong
Local Import Poor Slow Faulty Loss Duopoly
Supplier Quality Maker

Price-fixing Product Product Distribution Service Quality Financial Opponents


Assortment Quality and Delivery Performance

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Amazon
1
Difference between the two
Early Start
It created a market for
2 itself before
competitor can enter

Slower diversification
It started with books
and then diversified to 3
Electronics, Software
etc
Risk taking customers
Customers bought
4 without much need for
physical inspection

Persistent Quality
Persistent quality
caused superior 5
customer satisfaction

Collaboration
Instead of fighting, it
collaborated with
stores like Target and
Marks & Spencer

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? Thank You
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