Citi Bank India Credit Cards: Strategy for Profitable Growth

4321 Words18 Pages



Learning Team A5: Mohammad Al-Ali, Greta Carlson,

Patricia Ligon, Scott Schultz, Mike Xu, Max Young

Word Count: 1496

In assessing the marketing strategy of Citibank India's credit card business, Harpreet

Grewal is faced with two choices: maintain the current strategy, with its higher margins but

shrinking growth opportunities, or expand into new target segments/geographies with their

attendant challenges and uncertainties. He would likely find that a new product launch is

justified. While Citi's position in the super-affluent/affluent segment remains strong, its falling

market share combined with the growth of the emerging affluent (E.A.) and mass market

suggest a change
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The credit card customer in India can be segmented by Citi's own classifications - super-

affluent, affluent, E.A., and mass market - or by India's Socio-Economic Classification (SEC)

scheme. Citi's classification is more useful, as it provides more granular data. From data in

Exhibits 7 and 10 as well as in the text, Grewal can produce Exhibits A1 & A2, which summarize

the breakdown of the Indian population by wealth as well as geographic location, i.e. top 8

cities, remaining urban areas, and rural areas. To simplify the analysis, Grewal can assume all

households are the same size - while this is not exactly the case, it provides a sufficient

approximation. There are roughly 85 million people in the largest 8 Indian cities, of which 6-7

million are in the super-affluent or affluent segments that are Citi's current focus. As its

shrinking market share demonstrates, however, growth of the Indian credit card industry is

passing Citi by, due in part to expansion of the two sectors Citi left behind after the financial



If Citi wishes to adjust its strategy, there are two sensible choices for new targets - the E.A.

and/or mass-market consumer in the top 8 cities, or the super-affluent/affluent in other

urban/rural areas within India (See Exhibit A2). The former offers a much larger potential

market (12 million new

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