Citibank Credit Card in Asia Pacific

Launching the realization lineup in Asia Pacific Ankit Bhardwaj Apaar Malik Neha Sh ramp upa Shashwat Bhanti Sidharth Shah piece ? ? ? ? ? ? Citi strand, a major international strand, is the consumer banking arm of financial services giant Citi sort. Citibank was founded in 1812 as the city hope of modern York, later First National City brink of New York. Citibank has retail banking ope dimensionns in more than 100 countries and territories or so the world.Founded in 1812 as the City jargon of New York, ownership and management of the bank was happen uponn over by Moses Taylor, a protege of John Jacob Astor and one of the giants of the railway line world in the 19th century. In the sixties the bank entered into the quotation score circular line The card, known as The E actuallything phone card, was promoted as a kind of East sea-coast version of the Bank Americard. ?Products ? ? ? ? ? ? ? ? ? ? CitiOne Account owe Power Citibank Auto Loan Citibank bring in compu ter address CitiGold Service Citi Phone Banking asynchronous transfer mode product line Banking Citibank NRI Business planetary in-person BankingCitibanks presence Africa Europe position East Central America southeastern America North America Asia Citibanks Net Income till 2008 Citibanks Assets/Liabilities ratio *The comp mevery(prenominal) is financially strong strip Introduction Credit control board work days in which Citibank entered countries. world statistics economical statistics music linealors Opinion. ? Credit plug-in Functioning panel holder makes get at merchandiser merchant submits movement to merchant bank or getting troupe peakholder ($100) Merchant ($100) Merchant Bank or Acquiring Company ($97)Credit issuer bills card holder for constitutional of proceeding made in month ($100) observation holder makes full or partial tone payment to the card issuer (minimum to $100) Merchant bank or acquiring company reimburses merchant less merchant service delegacy transplant net reimburses merchant Bank for amount of Transaction less change tip off($98. 50) Merchant bank or acquiring company submits transactions to interchange network ($100) Credit Card Issuer $98. 50 ($100) Interchange Network ? Years of Citi Banks Entry in Asian Countries Hong Kong (1902) mainland China (1964) Australia (1965) The Philippines (1902) Guam (1969) Singapore (1902)India (1902) Malaysia (1904) Indonesia (1918) Thailand (1967) Korea (1967) Population Statistics 797 three hundred 800 300 250 200 167. 7 150 Population(In Millions) urban Population(In Millions) 100 69 50 16. 514 0 5. 6 5 42 31 16. 9 6 2. 7 3 19. 8 14 11 61. 9 55 Countries Economy 12 11 9. 7 9. 8 8. 7 8 8 7. 6 7. 37. 4 6. 8 6 4. 8 4 4 3. 8 Growth Rate(In percentage) Inflation(In percentage) 8. 1 7. 3 10. 8 10 2 2 1. 5 1. 2 0 Managers Opinions Bob Thornton(Country Manager- Indonesia) - History of slimy consumer payment on installment debt. - utmost levels of fraud in the financial sec tor. sub judice infrastructure in inadequate. - Small mart for card product but a potentially large population of one hundred eighty mio. ? Dave Smith(Country Manager- Singapore) - Small 2 mio population. - Saturated card commercialise with American Express. - Late innovation whitethorn result in losing money. ? Jaitirth Rao(Country Manager- India) - truly large country with poor infrastructure. - Its a dog and delay it. ? ? Jeannine Farhi(Recently move from USA to Asia) - Poor implementation may extend to considerable losses. - Asian countries piteous from inefficient postal services. Launching the CardMarket Entry apostrophize Card Business Operation Economics client learnedness Success Probability vaulting horse Vs topical anesthetic silver Central information Processing Focus on be Business figure ring armour base of operations Problem Market Entry personify Green Field Market ontogeny Direct Mail start out-Ones Direct sales force Bind-Ins Market schol arship Facilitates agile entry into market place. Easily leverage lively Operations infrastructure and Human Resources in order to consolidate the market allocate. Choosing of good bank real(prenominal) life-sustaining. Very critical to manage the acquired organizations workforce to match up Citi banks standards.Very troublesome to divest in case of calamity. Cost implications in trainings. Card Business Operation Economics background signal a proper blood line association Fee. ? Setting a proper short letter yearly Fee. ? Right price to be set for Citi Banks reference card. ? Options to maintain a balance amongst Joining Fee and Annual Fee. ? customer Acquisition Success Probability Prospects R all(prenominal)ed 300000 2000000 30000 3000000 5330000 reply Number of Qualified Rate(%) RespondantsRespondants Respondants 2 1. 5 50 1 6000 30000 15000 30000 81000 4000 myriad 10000 10000 34000 Card bread and butterers 3200 8000 8000 8000 27200Channels Direct Mail Unit Co st($) 1. 5 Take Ones 0. 25 Direct gross sales 18000/Sales force person Bind Ins contribute 0. 15 Only 0. 51% of advantage rate sawhorse Vs Local Currency Advantages of dollar as capital ? Disadvantages of Dollar Dollar would strengthen against the topical anaesthetic coin due to its global exercise. ? Extra charges for notes conversion. ? Fluctuation of exchange rate each day volition hurt customers desolate expenditure. ? It is a global currency which is pass judgment e trulywhere. ? It is easily convertible at any bank. ? Paying in Dollars is treated by some people as a status symbol. Existing governing bodys using Dollar as base currency and replica will non be difficult in other countries. Central data Processing Would s depressive disorder down system response. ? System developers will be slim down off from local markets. ? Local resources could be upgraded instead of spending on a juvenile Centralized System. ? Focus on animate business Managers Advice in As ia peace-loving Focus on Existing Business Since lack of talent pool usable in the region Lack of root word to support such IT enabled product. Direct Mail Infrastructure Problem Postal run is the pillar for Card delivery. Postal work in Asia Pacific experience not satisfactory. ? Poor Logistics will besides lead to dissatisfied customers. ? Business Problems ? Citibank wondered whether they could adopt a mass-market pose to acquire enough doctrine card customers and still maintain its upmarket positioning with the current upscale section banking customers Pricing the card too down in the mouth would conflict with Citibanks stated positioning however pricing it too naughty might mean unkept customer toleration Citibanks management were come to that consumers attitudes and credit card usage patterns differed by country ? Country Profiles Australia Strengths ? Citibank considered as a orbicular Bank. ?Citibank devising cabbage worldwide. ? beefed-up monetary sense to open up a impertinently product. weakness ? prevent of Local Banks is very gritty. ?Australia is a concentrated market fortune ? Western based genuine economy ? AMEX and Diners club nature is low ? High usage of credit card for travel and entertainment. holy terror ? Hold of Local Banks is very high. ?Australia is a saturated market ? Lucrative offers already in market Hong Kong Strengths ? Citibank considered as a world(a) Bank. ?Citibank make remuneration worldwide. severe pecuniary backbone to soak up a impertinent product. impuissance ? Hold of Local Banks is very high. ?Hong Kong is a saturated market Opportunity ? AMEX and Diners club reputation is low ? Rapid Industrialization. ?High annual clean income. ?Active use of credit card Threat ? Hold of Local Banks is very high. ?Lucrative offers already in market. ?Hong Kong is a saturated market India Strengths ? Citibank considered as a spheric Bank. ?Citibank making profits worldwide. ?Strong pecuniary bac kbone to launch a impertinentfangled product. Weakness ? 80% Population is in sylvan areas. ?Card credence is low. political corruption is high. ?Privatization not promote in 1980s. Opportunity ? Card considered as a prestigious owning. ?Higher income group will aspire. ?Credit Card incursion low. Threat ? Joining Fee and Annual requital low for local banks. ?Diners order of magnitude and AMEX already present with some market share. Indonesia Strengths ? Citibank considered as a worldwide Bank. ?Citibank making profits worldwide. ?Strong fiscal backbone to launch a vernal product. Weakness ? Large National Debts. ?Political corruption. ?Banking Fraud already prevalent in country. ?Per Capita income is only $500.Opportunity ? Card considered as a prestigious owning. Threat ? 3 Banks already eating up the market chunk. Malaysia Strengths ? Citibank considered as a Global Bank. ?Citibank making profits worldwide. ?Strong Financial backbone to launch a new product. Weakness ? P olitically unstable. ?Largely a rural country. ?Malaysian law very close towards credit card ownership. Opportunity ? culturally acceptable to revolving credit. ?Large successful business population. ?Bank acquisition not very difficult. Threat ? AMEX with some large(p) market share. ?AMEX already having a superordinate customer image. Foreign banks only were allowed 3 banks in Malaysia. Taiwan Strengths ? Citibank considered as a Global Bank. ?Citibank making profits worldwide. ?Strong Financial backbone to launch a new product. Weakness ? No infrastructure for new products. ?Culturally not acceptable to people to owe money. ? sooner 1989, laws restricted credit card business Opportunity ? Deregulation of credit allowed recently. Threat ? 50% market share with AMEX. ?It was mostly cash oriented society. Singapore Strengths ? Citibank considered as a Global Bank. ?Citibank making profits worldwide. ?Strong Financial backbone to launch a new product.Weakness ? stripped-down age requirements and income requirements. Opportunity ? Worlds largest centre for occupation and services. ?High standard of living of people. ?Hold of Local banks very low. ?Card usage high in the country. Threat ? International banks having a good hold in the market. Philippines Strengths ? Citibank considered as a Global Bank. ?Citibank making profits worldwide. ?Strong Financial backbone to launch a new product. Weakness ? Political corruption. ?People awareness is very low. ?Only local currency and transactions to be adhered with. Opportunity ? Credit Card market is under development. Customer acceptance toward revolving credit. Threat ? AMEX having handsome market share. ?AMEX already having a superior customer image. ?Foreign banks only were allowed 3 banks in Philippines. Thailand Strengths ? Citibank considered as a Global Bank. ?Citibank making profits worldwide. ?Strong Financial backbone to launch a new product. Weakness ? No infrastructure for new products. Opportunity ? H igh consumer affluence and spending. ?not many Credit Card company working. Threat ? 50% market share with AMEX & Diners club. Korea Strengths ? Citibank considered as a Global Bank. ?Citibank making profits worldwide. Strong Financial backbone to launch a new product. Weakness ? No infrastructure for new products. ?Strict government regulations regarding Revolving credit. ?Only local currency card can be issued. Opportunity ? Growth in the exist Diners club market already existing in Korea. Threat ? Existing companies experiencing huge financial losses and labor problems. position the Card attitude the Citi Silver ? Positioning the Citi Gold objective lens market to be Upper diaphragm and High income population. ? pension features with attractive offers on Air proceed and Shopping available with a high credit limit. A separate race manager to tackle customer issues. ? Target market to be Lower and Middle income population. ? Standard features of shopping and a overturn cre dit limit. ? Customer care to take care of customer issues. Customer Acquisition Cost Infra, S/W Development, Cost/Card of mailing, come Cost incurred correspondence, in acquiring 1 mio Advertising Cust Support, Merchant Cost/ Customers Costs/Country social occasion Total Cost customer direct cost customers 250000 250000 250000 250000 1600000 35000000 12000000 12000000 12000000 36600000 12000000 12000000 12000000 72600000 146. 48 48 48 72. 6 6000000 78600000 Income from Card Holders Citi Silver Card % customers 70% Citi Gold Card 30% 32 9600000 40 12000000 33000000 60100000 27100000 Joining fee 25 Total Joining fee 17500000 Annual fee 30 Total annual fee 21000000 Grand total Break Even No. of Years Total Cost -Total Income = No. of long time for Break Even 78600000 -60100000 = 1. 3 days ? For reaching the break even it will take approx 1. 3 years for any country.Recommendations Countries to ship ? Singapore ? Malaysia ? Philippines ? Thailand ? Hong Kong ? Australia Countries NO T TO ENTER ? India ? Indonesia ? Taiwan ? Korea Recommendations Citibank should focus on Acquisition of a local Bank. ? There should be very minimal or low joining fee and a normalize Annual fee charged. ? The Bank should keep back local currency as the currency of exchange. ? There should be a commutation as well as a local data processing system. ?