A REPORT ON
Launching the Credit Card in Asia Pacific Countries
Mr.Kiran Kumar Pedada
K.V.Ch.Madhu Sudhana Rao (32)
R.Avinash Kumar (20)
Indian Institute of Planning Management
Banjara Hills, Hyderabad.
Citigroup Inc. is an American multinational financial services company based in New York City. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate Travelers Group on April 7, 1998. Citigroup Inc. has the world's largest financial services network in the world, spanning 140 countries with approximately 16,000 offices worldwide. According to Forbes, Citigroup used to be the largest company and bank in the world by total assets until the global financial crisis of 2008. Today it is ranked 24th in size compared to HSBC which now ranks as the largest company and bank by assets in the world as of 2011. The company employs approximately 260,000 staff around the world, and holds over 200 million customer accounts in more than 140 countries. It is a primary dealer in US Treasury securities.1
In Asia Citibank started their services in India, Philippines and Hong Kong in 1902. At present they are performing their services in 11 Asian countries. Citibank’s mission in the Asia Pacific region was to be the most profitable provider of a wide array of financial services to an increasingly affluent and middle-income market, and to reach the rapidly growing middle-income households in this region.2 Objective:
Citibank believes expanding their credit card business into Asia Pacific would be a way to increase their revenue, as they are currently restricted on the number of foreign bank branches they can open. Citibank must decide in which countries of the Asia Pacific it should invest, and which countries to target first.3
We recommend in the first phase to expand the credit card business into India, the Philippines, Taiwan and Thailand. These are fairly stable untapped markets. Our strategy is to focus generally on the high status groups in these markets. The cards should be issued in the local currency but include an option for Taiwan customers to use US dollars. In the next phase enter into Malaysia, Australia and Singapore. Again focus on the high status groups in these markets. We don’t recommend expanding into Indonesia due to the unfavorable economic conditions. Marketing should focus on direct sales and bind-ins for markets high status cards and expands these channels with direct mail and take-ones where a more diversified population is targeted. Problem Statement
Citibank believes expanding their credit card business into Asia Pacific would be a way to increase their revenue, as they are currently restricted on the number of foreign bank branches they can open. Citibank must decide in which countries of the Asia Pacific it should invest, and which countries to target first. DATA & ANALYSIS
Current Performance in Asia Pacific
Citibank, with operations in 15 Asia pacific and the Middle East countries, earned $69.7 million in 1998 and was an undisputed leader in most marketplaces. The table below shows that the profit margins in Asia Pacific are a phenomenal 22% on average.
Looking at the performance of individual countries in Asia Pacific (See table below). We can see that Thailand, Indonesia, Taiwan and Singapore perform over average while Hong Kong, Philippines, Malaysia and India perform below average.
Ranked by performance*
| Hong Kong
| # Of Bank Customers(000)
| # Of Bank Accounts(000)
| Net Revenue From Fund
| Net Revenue/Customer
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