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Prashant Gupta

· started a discussion

· 1 Months ago

Wrong interpretation please clarify (Question: 151592.3 )

The last line of second paragraph say.. people did not use payment cards. It does not imply they do not possess payment cars.

Question:

DIRECTIONS: Read the following passage carefully and answer the questions given below them. Certain words or phrases have been printed in bold to help you locate them while answering some of the questions. 


Narendra Modi, India’s technophile prime minister, this week spent a good part of his visit to America, the second in a year, hobnobbing with Silicon Valley’s great-and-good. India has long been a supplier of talent to America’s tech firms. Its business-process outsourcing firms are a vital source of export earnings. But for years, India has been an untapped market for consumer-facing technology firms. That is now changing. The rise of mobile-internet access has sparked interest in the potential of e-commerce in India. Bricks-and-mortar retailing is very fragmented. A trip to the mall can be an ordeal because of congested roads. In such difficult terrain, e-commerce may easily blossom.


Two home-grown outfits, Flipkart and Snapdeal, are vying to be the dominant player. Flipkart has the advantage of starting first. It was founded in 2007 by Sachin Bansal and Binny Bansal, two software engineers who had worked at Amazon. The head start gave Flipkart time to build its own distribution arm and to establish a good name for service. Flipkart pioneered a cash-on-delivery service for the majority of Indians who did not use payment cards.


Snapdeal began in 2010 as a seller of online coupons but a trip to China in 2011 prompted a switch in strategy. The founders, Kunal Bahl and Rohit Bansal, saw how Alibaba was thriving as a platform for online sales. Unlike Amazon or Flipkart, it had little capital tied up in stocks or warehouses. According to Mr. Bahl, owning what you sell makes you have limited range. Starting a marketplace for buyers and sellers “allowed us to scale up quickly.”


The downside of such a strategy is that bad service from a seller hurts Snapdeal’s brand. But Mr Bahl puts forward that careful screening of merchants, plus shoppers’ ratings, limit the danger. Low-rated sellers are soon starved of traffic. In some ways the two rivals’ strategies are converging. Flipkart lets competing sellers use its platform. Snapdeal has invested in Gojavas, a logistics firm, to help with the last leg of deliveries. As online shopping becomes more popular, India’s e-commerce battle may be decided by something as basic as whose app is the easiest and most enjoyable to use.


E-commerce is still tiny in India. Neither Flipkart nor Snapdeal is profitable. Even so, Flipkart was valued at $15 billion in May. Snapdeal was valued at $5 billion after a fresh round of capital-raising in August. Most of India’s 1.25 billion people do not have access to the internet. Yet the share of its 900m mobile-phone users with a smartphone is growing fast, as handset prices decrease. The cost of using a smartphone is far cheaper in India than in most places, even if the service is often patchy.


Besides, a young population is likely to take more speedily to shopping by smartphone than going to places where stubby-fingered old-timers wield more of the spending power. According to statistics, two years ago, mobile phones accounted for 5% of Snapdeal’s sales. The figure is now 75% and soaring. No wonder Silicon Valley’s tech gurus and venture capitalists are showing more interest in India.

As understood from the passage Flipkart started a cash-on-delivery service in Indians for which of the following reasons?

Options:
A) because they wanted to help Indians do online shopping and make payments in the easiest possible way
B) because card payments consume a lot of time
C) because of the abysmal infrastructure of existing payments
D) because most of the people in India do not possess cards to make a payment
E) None of the above
Solution:

Ans: (d) Refer to last line of second paragraph of the passage. It validates choice (d) as the correct option.

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