Amazon ACE Challenge 2016

Consumer Business Case

Study

Team: 3 Stars
Mahesh Telangi
Santhosh Alampally
Rohith Chanda

Answer 1
What is the present scenario?
Currently only 34.8% of Indian population is connected to internet and its growing
tremendously in recent past. It wont be not wrong to assume that most of the internet
subscribers are from urban areas. More than 70% of Indian population is based in rural
and semi-urban area and the median age of our population is around 25 years. More

than 45% of population is between 18-45, who has the potential to use and understand
internet. Amazon already has a fair bit of customer base in urban areas where people are
aware of advantages of online shopping. To increase the customer base to 200mn in next
two years Amazon has to penetrate the untouched market i.e. semi-urban and rural
which constitutes the major portion of our population.
Idea to make people aware?
To capture this market, we need to create curiosity among the masses in rural
area and then create awareness by initiating some campaigns and drives. The curiosity
can be created by distributing leaflets in local newspaper or putting up banners and
hoardings (refer picture 1) in villages leaving an imprint on their mind. Amazon can put
up something saying we are coming to your home in regional language of that
particular village or town. Once people start talking about this, Amazon should disclose
their plan about how they are coming to their place and then initiate an awareness drive
where people are made aware of the benefits of shopping online and the huge discounts
and offers they can avail seasonally or during festivals. Usually village people go to
nearby city for shopping electronic goods, clothes, some equipments and luxury items.
Here we are coming with an idea called AMAZON ON WHEELS (picture 2)
How it works?
Amazon on wheels is a self-sufficient multi utility van or a vehicle that has
integrated amazon machines which has access to online amazon store. This vehicle will
visit the town or village once in a week and in its initial phase Amazon will give decent
discounts to attract the new customers and make them addicted to use the AMAZON ON
WHEELS frequently. May be on every Thursday the vehicle visits the village and stay
there all day long at a certain place which carries the orders which were placed in the
prior week. The vehicle has multiple machines for people to step in and take a look, with
an amazon correspondent to help them understand and make sure they have a smooth
shopping experience. People from rural areas are always curios about such fancy things
and would surely end up visiting the store. Village or town being a small place, every
second person knows each other. The initial campaigns and drives would spread by word
of mouth and once they get a real hand on experience it would turn out to be a success.
Here we are saving on infrastructure as there are no separate warehouses and we
are also cutting down on transportation charges as the delivery is only to be taken care
of on that particular day.

1.

2.
We are coming to your
home

Answer 2

Multi utility vehicle: AMAZON ON

WHEELS

Among the three biggest challenges that are mentioned, Amazon should look
forward to target the first challenge in the next 2 years. As people in India face network
issues irrespective of any network they use, loading of amazon page takes a lot of time.
This issue is something which is often faced in places like semi-urban or small towns in
India. It is very much required to find a solution for first challenge rather than second
challenge because the app/website should be user friendly and easily accessible to
customers despite the trouble they face with networks. Unless customers get a perfect
platform to search and order a product, it doesnt make sense in improving the
infrastructure or logistics.
Issues faced by people due to network issues in India:
People in India have started moving from the world of desktops to smart phones. Every
task is being performed using a smart phone. Below are two issues customers face due
to bad network:
1) Either the page doesnt load at all despite a number of trails.
2) Page loads but it does take a lot of time for a person to direct from one page to
another page.
In both the issues, customer gets frustrated and will not show any enthusiasm to visit the
page. This will have a lot of impact on the customer base of Amazon as customers would
be reluctant to frequently use it as it consumes lot of mobile data usage.
How Amazon can find a solution to counter the network issue in India:
Amazon should look into compressing the size of the images of products. This can be
achieved at a most minimal expenditure by using certain tools which are available in
market. This will ensure that the page gets loaded in minimal amount of time and there
by the app/website can work perfectly fine on 2G network also. The advantage of
implementing this feature is that with the increase in customer base, the amount of time
spent by the customers on app for a particular day will also increase. Add promotions can
be done as you are stuck in traffic, Why waste time??? Shop on Amazon and get
100 MB free.
With the increase time spent by customer on Amazon app/website, the chances that
customer would buy a price will also increase. So, amazon should provide certain MB of
data at free of charge for every product that they order from Amazon.
This will in a way benefit the amazon to get in tie ups with mobile network companies.
With the advent of JIO release into market by reliance, everything including voice calls
are also depending on the data package of a mobile.

Before
After

Answer 3
After implementing the above suggestions in order to face the existing challenges,
there will be many newer challenges that Amazon would face. One among these is
supply and demand issue. As the amount of demand increases, there would be mismatch
in the supply and demand and it should be in the interest of amazon to consider this
challenge as well.
What Amazon should do:
There is huge potential for Amazon to capture the SME and thereby increase the
seller base. Amazon should identify those SMEs which are in the vicinity of towns where
Amazon is trying to expand customer base. This will in a help Amazon in reducing the
logistics costs. Also, Amazon can get the information about the customer base in that
region from SME. One thoughtful question that might arise is: Why would SME provide
customer base data?? The logic behind this is that Amazon will provide commission for
SME and as well provide discounts for customers. So, SME would respond in positive way
as the target of any SME would be to have regular flow of customers who will be loyal to
the organization in the long run.
Long run opportunities for Amazon:
With the existing competition with Snap deal, Flipkart and Myntra, Amazon should look to
create a new market by creating a blue ocean strategy and not being marketing myopic.
In the long run, Amazon would get penetrated into each and every small towns
and villages and this would become a brand in the long run which people with get
associated with.
Tie-ups with SMEs with also help the amazon to get into distribution channel in the
coming future and thereby eliminating the multiple distribution channels that are
currently present.

Manufacturer -> Distribution -> Small distribution channel -> SME -> Consumers
With Amazon entering into distribution channel
Manufacturer -> Amazon -> SME with Tie-up (Towns and villages) -> Consumers
Here Amazon should encash the margin that distribution channels from cities to
villages charge and provide the commissions to SMEs in villages and small towns.