2017

Project Report
Strategic Management

Project Area:
Comparison between two e-commerce platforms

Submitted To
Sir Fawad Khan

Submitted By
Noman Memon Cs1310
Daniyal Hassan Cs1310
Muhammad Masood
Syed Ali Hussain
Hammad Ahmed
 Comparison of two E-commerce platforms

Phase I: Industry Analysis

Our focused Industry:

In this digital era the craze and importance of online shopping has increased much as compare
to last five years now each and every one is preferring online shopping as rather than going
market facing traffic and other hassle they just want to buy their desired product with number
of clicks on sitting a couch with a cup of coffee. In this document we have selected ecommerce
industry to focus on their business model marketing techniques and how they are conquering
the world of ecommerce in Pakistan. In our research area we have selected two giants of
Pakistans ecommerce industry one is Daraz and second one is Telemart. Reason to focus these
both giants because they are conquering every area of ecommerce and making their sales
greater day by day and covering every product and delivering what the customer wants.

Why Daraz?
As we know that daraz has started the trend of ecommerce solutions in Pakistan from very
native stage but as the time goes daraz earned remarkable achievements with tremendous
performance. Daraz engaged many large retailers and distributors on one platform for Pakistani
peoples so they can buy whatever they want from single platform. Daraz has actually made
itself an online super market which engages many large shop keepers distributors so they can
assure that each and every product is available 24/7.
This is not enough
This online store is doing better than all others so far. Its overall friendly website experience,
product categories, brand variety, Facebook fans and online advertisement campaigns speak
for themselves. Apparently the website delivers products worldwide. Customer reviews and
experiences imply swift delivery, reasonable prices and satisfactory return services. The website
also has reward points system for customers. In terms of absolute numbers, Daraz is delivering
over 1,000 items daily, though theres no indication of how much people are spending or how
many orders those represent.

Daraz.pk is without any doubt the market leader. Over the years, it has made the right
marketing and partnership decisions allowing it to maximize its reach and improve brand name
recognition. Today, not only is it the most popular online retailer but also a household name.
Numbers never lie and with 9.3 million unique visitors every month, Daraz.pk takes the top spot
in our rankings. Thanks to a user-friendly and engaging website design, Daraz.pk claims average
visit duration of 5 minutes 6 seconds. Each visitor, on average, views 4.48 product pages on the
e-commerce store.

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Daraz.pk manages to get more than one-third of its users through direct access to its website,
another proof of brand awareness. Only a small amount of its user-base comes from Social
media and search results. Majority of the people are either redirected from ads or referrals
from other websites. A majority of visitors, who come to the website through a search engine,
are looking for Darazs website link.
By seeing this achievement and such a tremendous progress Rocket internet bought daraz as
their own startup and business in Pakistan

Why Telemart?
Telemart is a startup of student of IBA Hamza Abdul Rauf and as well as a subsidiary of trade
links enterprises, a company having 23 years of excellence in dealing with cellular phones and
consumer electronics from all the leading brands, with competitive pricing, vast range of
products and providing efficient after sales service and support to customers with convenience
through its online shopping platform and brick-and-mortar outlets spreading nationwide with a
wide range of mobile phones from all leading mobile brands, IT and networking products,
home appliances, home entertainment products and all other consumer electronics under one
roof. Why spend your time digging through market when you can shop easily and safely at
TELEMART! With such a huge variety of product range, you won't need to look elsewhere to
satisfy your cravings. Telemart strives to make it easy for customers to find the best offers; with

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features such as daily and weekly product reviews, discounted price and best seller suggestions,
Telemart helps customers make the most informed purchase decision online. TELEMART
believes in providing our customers not only value for money, but exceeding their expectations
at every level through our pre and post sales prospective. We aim to keep our customers
updated and in the loop so whether its a query for an order or any tech-update, we will go
beyond our excellence to create an ultimate online shopping experience when using our e-
commerce platform.
Telemart offers over 15,000 quality products, and this list is growing every day. Telemart lets
you sort electronics by Brand, price, customer ratings or features, so finding the right device for
you is a breeze. Our customers know they're getting the best prices and exclusive offers on a
huge range of electronics.
Whether you're upgrading to a new phone, looking for sleek new accessories for your phone,
want a new Laptop, or setting up an ultimate home entertainment, Telemart makes it easier to
find what you need at a price you wont get anywhere else.
At Telemart you will find every mobile phone brand available in Pakistan as well as latest
accessories to match your style. We have a wide range of genuine laptops, desktops, printers,
storage devices and a complete range of computer accessories as well as top notch gaming
products at unbeatable prices.
Our audio and visual entertainment category gives you a huge choice ranging from 4k ultra HD
to Smart LED and a wide range of home theatre and stereo components. Telemart will always
bring you the best for your electronic needs. With the addition of kitchen and home appliances;
we want to cater all our customers needs with just a click away. No matter you want, a
cookware, cleaning equipment or solar panels, Telemart is the place for you.

Whether you are a professional photographer or just a freelancer; at Telemart you can find
your suitable gear. Choose from a range of digital cameras to high end DSLRs and photography
equipment with the best prices and guaranteed genuine products. Our online store is a center
of attraction for other businesses as Telemart offers a vast range of office supplies from
networking solutions to office security.

Business model:
Daraz
Daraz has started with a simple business model is to engage retailers and try to get stock of
every product at every time without delay in delivery. Now a days daraz is following an
excellent business model which ensure that client will receive actual product in given time of
delivery.

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Daraz is providing a marvelous business opportunities some of are described below

Business to vendors
Shop keepers or wholesalers who are not getting walk in or having very slow progress

Daraz in next three years:

By considering daraz progress to the date and its performance it is obvious that in coming next
three years it will cover the major areas of ecommerce platform not only in Pakistan but in Asia.
As per latest business news daraz gets an investment of $55 million to step up operations in
Pakistan, Bangladesh and Myanmar the three markets it already operates in. The move,
according to TechCrunch, follows Rocket Internets earlier announcement to push for
aggressive growth in Asia with one launch per quarter to expand in emerging markets. The
company plans to use this cash to grow its business in existing markets and to expand in other
frontier markets in Asia where e-commerce is taking off.
So it is possible to conclude that daraz will excel more than any startup in Pakistan as well as in
Asia in the next three years.

Telemart in next three years:

As the time going telemart is increasing their market value day by day and also increasing their
product and brand range they are doing what is actually a competitive market wants and they
are doing their level best to boost up their business by quality of product, shortest delivery time
,customer care and covering each and every corner by both e store and as well as at their
showrooms.

It possible to say that in the coming three to four years telemart not only cover major business
areas of retail through their showrooms and they will conquer many hurdles to take their e
store above the mark of daraz. As now telemart is the authorized distributor of many
international brand as the time goes they will also become authorized dealer of those brands
which are even not available in Pakistan

Functional Strategy [Daraz]

Profitability:
Although Daraz tries its level best to provide its customers with the lowest rates it also has a good
margin for profit.
Market Share:
Daraz ranks at number 8 and 96.40% of its visitors are from Pakistan, the other being 0.80% from United

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States Of America, 0.30% from Saudi Arabia, 0.28% from United Kingdom and 0.22% from Germany
Human Talent:
Daraz has a very tough and rigorous hiring channel and it only selects the most deserving and talented
individuals
Cost Efficiency:
Daraz uses cost efficiency in a very good manner, using local courier services to deliver its product to
the customer
Product Quality:
Since it has gained a very high popularity, the quality of the product is very carefully monitored to
ensure that its customer is getting the right thing that he or she is paying for.
Innovation:
Daraz always tries to get the market by forging new ideas and discount sales like Black Friday etc

Functional Strategy [Telemart]

Profitability:
Since it deals in electronic so the margin for profit is fixed.
Market Share:
Telemart ranks at number 533 and 91.71% of its visitors are from Pakistan, the other being 1.98% from
United States Of America, 1.11% from Afghanistan, 0.74% from Saudi Arabia and 0.73% from The United
Arab Emirates
Human Talent:
Telemart hires a good quality and talented staff for all of its departments whether its the backend server
or in the retail shop, or a courier person.
Cost Efficiency:
Like Daraz.pk Telemart also uses local couriers to deliver its product to its customer, but since it deals in
value and fragile materials, it also has its own fleet of delivery persons.
Product Quality:
Since it has gained a very high popularity, the quality of the product is very carefully monitored to
ensure that its customer is getting the right thing that he or she is paying for.
Innovation:
In E Commerce, innovation is always required, so telemart is always looking for new innovative ideas to
get the attention of its customers

Business Strategy[Daraz]
Mission "To be the only online shopping destination a person will need, we need to impress the
customer at every touch point. We are going to surprise every one of our consumers and suppliers by
delivering an incomparable experience".
Efforts to sell products at the lowest prices possible from manufacturers
Daraz promises to satisfy the customer by providing the lowest rates even when there are new
competitions rising every day.

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 Comparison of two E-commerce platforms

Business Strategy[Telemart]
mission "Providing one stop solution for all of your shopping needs through Telemart's Online, Retail,
Corporate and Wholesale network backed by efficient after sales service and quality branded products. "
Make all possible attempts to make the customer satisfied by providing products at the best rates
possible
Telemart promises to beat all other retail prices by using its unique Price Beating Policy

Mission/vision [telemart]
Our Vision

" To redefine the landscape of retailing and E-commerce in Pakistan by working towards a more
customer centric business approach and to ensure customer convenience and gratification. "

Our Mission

" Converging over 23 years of rich experience and pioneer status by providing one stop solution for all of
your shopping needs through Telemart's Online, Retail, Corporate and Wholesale network backed by
efficient after sales service and quality branded products. "

Mission/Vision [Daraz]
Vision
the vision for the company is to become the biggest, most profession and most customer- centric firm

Mission

Our mission is to be the only online shopping destination you will need, We need to impress the
customer at every touch point. We are going to surprise every one of our consumers and suppliers by
delivering an incomparable experience.

Five Forces [Daraz]

Competitive Rivalry - High
Competitive rivalry is a very strong force that can push a push a company to change its strategy and
remake its decisions.Daraz faces a lot of competition from its rivals.It faces competitions like
olx.com,homeshopping.pk,shophive.com

Threats of new entrants - Low

As Daraz was establish back in 2013 it has gained a lot of loyal customers and is reaching new peaks, for
a new E-Commerce website to match the level of Daraz would be nearly impossible. And also having to

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get manufacturers to register themselves to you for an amount would require trust.So the threat of new
entrants is pretty low

Bargaining Power of Suppliers - Low

Since Daraz has gained a lot of popularity, its suppliers are mostly manufacturers. And a lot of new
manufacturers are always willing to get themselves registered with Daraz as they see a lot of boom in
their business.So if a supplier attempts to increase the market rate will end up failing.Overall, the
bargaining power of suppliers against Daraz is low.

Bargaining Power of Buyers -Medium

The buyers from Daraz are both individual buyers and small businesses. Due to the low prices that Daraz
offers and also a wide variety of products, the buyers dont have much of a choice here, they will have to
buy at a higher price if they switch to another E Commerce website.The number of buyers from Daraz is
very high thus making it that more tougher for small businesses to be able to influence the market
price.But as there other new E Commerce websites are emerging, some have become successful in
grabbing a fraction of the market share by providing some of the items at a lower price than Daraz and
have also grabbed the market by providing some kind of a sale discount. Thus the bargaining power of
buyers is medium for Daraz

Threat of Sustitutes- High

Threat of substitues is high for Daraz, the top can be said that since Daraz has no physical store, the
physical retail stores that offer items at an even lower price win in this.The other is that the suppliers
are directly shipping to the customers, In this way they can have a higher profit margin because putting
Daraz out of the way ,they can directly sell to the customer, thus saving the registration fee.

Five Forces[Telemart]
Competitive Rivalry - Medium
Just like Daraz, Telemart also has a lot of competitive rivalry which causes it to change its marketing
strategies time and time again. Though not as much as Daraz, since it only offers electronic items, but
other E Commerce websites like olx.com, homeshopping.pk, and shophive.com are now also offering
electronic items. This puts the competition rivalry at a medium for telemart

Threats of new entrants - Low

As Telemart started in 2014 it has gained a lot of loyal customers looking to fulfil their desires for
consumer electronics and has gained quite a reputation. Other E Commerce websites have also started
selling electronic products but they can't quite reach the level of satisfaction that Telemart has provided
their customers, also they have a small category in consumer electronics whereas telemart sells all kinds
of electronics and that too at a much cheaper rate than anyone else can offer.

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 Comparison of two E-commerce platforms

Bargaining Power of Suppliers - Low

Since Telemart has gained a lot of popularity in consumer electronics, its suppliers are mostly
manufacturers. And a lot of new manufacturers are always willing to get themselves registered with
Telemart as they see a lot of boom in their business. So if a supplier attempts to increase the market
rate will end up failing. In conclusion, the bargaining power of suppliers against Telemart is low.

Bargaining Power of Buyers -Low

Telemart offers its buyers the lowest price so there is pretty much no margin for bargaining and also in a
country like Pakistan where theft is always a risk its better to have your electronic products home
delivered to you. Due to the low prices that Telemart offers and also a wide variety of products, the
buyers dont have much of a choice here, they will have to buy at a higher price if they switch to another
E Commerce website so the bargaining power of buyers is low

Threat of Substitutes- High

Threat of substitues is high for Telemart, one being that other physical retailers might offer a lower rate
than Telemart. The other is that the suppliers are directly shipping to the customers, by doing this they
can cut out third parties like Telemart and sell directly to the customer and also increase their profit by
this way

Current Strategy
Daraz.pk:
Daraz.pk, has been taking huge effort to overcome these challenges, which is benefiting the entire e-
commerce ecosystem. Daraz is the leading Online Marketplace in the country, and it is our responsibility
to make sure that customers, as well as sellers are always protected and have a good experience when
using our platform.

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We may not be the actual seller of a product, but when a purchase is made through Daraz, it has the
Daraz brand on it. Therefore we offer 100% Purchase Protection on all sales from our website he says.
Our goal as a true marketplace is to make availability of every product that our customers are searching
for, and we already have more than 300,000 product listings from approximately 2,000 active sellers
but we are only just getting started.

In 6-12 months, Daraz aims to have more than 1 million product listings and tens of thousands of sellers.
To support this growth, it is investing significantly into its control systems and training programs to make
sure customers continue to have a good shopping experience as it scales the assortment.

Interestingly, while the number of sellers on Daraz is growing rapidly, the cancellation rate i.e. when
the seller cannot deliver the product has decreased dramatically to less than 1%, and more than 90%
of marketplace orders are now shipped out on the same day as the order is placed. This shows that the
strategy is working and sellers are getting better each month.

According to Mikkelsen (Co-CEO Daraz Group), the cornerstone to a healthy online marketplace is an
ecosystem of reviews and ratings. Therefore, Daraz encourages customers to write reviews of the
products they purchase and will soon display each sellers operational performance to the customers on
the product page, offering complete transparency.

Rocket Internet : Rocket Internet is one of the world's largest e- commerce focused venture capital
firms and startup incubators founded in 2007 by the Samwer brothers.

Rocket Internet The founders gained visibility through successful investments in Groupon, eBay,
Facebook, Linkedin, Zynga, etc. The company's business model is to identify successful internet ventures
from other countries (often the United States) and replicate them in predominantly emerging markets.
In 2013. Rocket Internet raised close to $2 billion from investors including Russian billionaire Leonard
Blavatnik, Swedish investment firm Kinnevik, and J.P. Morgan.

Rocket Internet Rocket Internet operates in more than 50 countries and has more than 75 ventures in
their portfolio such as the e-commerce retail companies.

Rocket Internet Rocket Internet In Pakistan, latest projects of Rocket Internet

Daraz.pk

Carmudi.pk

Foodpanda.pk

Kaymu.pk

Easy Taxi

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 Comparison of two E-commerce platforms

Organizational Environment Specific Environment:

Customers To deal with customers they have provided an email address a number for giving further
information and for solving customers queries.

Competitors They compete with other online retailers by offering products of more then 300 brands
on their portal and by providing feasible mode of payments.

Suppliers Daraz has many suppliers and it maintains good relationship with them so overall they have
negligible supplier dependence.

Public Pressure Group Public pressure groups force new designers that offer trendy products.

Organizational Environment (PEST Analysis) General

Environment:
Political There is no such political influence to Daraz.

Economic Income growth affects positively where as inflation negatively.

Sociocultural Nowadays there is a high integration of internet in daily life so Daraz utilized this factor
by addressing the fashion need of people through their online web portal.

Technological Technological Innovation.

Performance and interface Requirements:

Hardware
Software
Domain
User Friendly Website Design

Competitive Advantages:
Cash on Delivery
Free Shipping
Free 7 Days return

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 Comparison of two E-commerce platforms

Business Model:
Business to Consumers.

Revenue Model:
Earns revenue by selling their products through their website.

Payment System:
Cash on Delivery
Debit/Credit Card
Net Banking

Marketing Strategies:
Product: Sells branded product in the category of clothing, footwear, jewelry and accessories of
men and women
Price: It offers products at affordable prices and also provides discounts.
Place: It brings products from different manufactures to its online web portal and then delivers
directly at the doorstep of customers.
Promotion: It promotes through advertisement on various websites.

SWOT Analysis:
1- Strengths:

High Security
Feasible modes of payments
Offers Ubiquity to customers
Diverse branded products in clothing category

2- Weaknesses:

Low Profit margins

Operates in few categories

3- Opportunities:

Growing E-commerce sales

Rapid Growth in internet users more customers

4- Threats:

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 Comparison of two E-commerce platforms

Security issue
Increase in online retailers

Current Strategy:

Telemart:
Jovago.pk, Pakistans first leading online hotel booking portal has collaborated with Telemart, one of the
countrys fastest emerging online and retailbrand. The MOU signing ceremony was held in the head
office of Telemart in Karachi.

With this partnership, Jovago Pakistan brings good news for Telemarts shoppers, who can use their
Telemart discount cards toavail flat 10% off on all hotel bookings across Pakistan carried out through
Jovago.pk. This discount can be availed multiple times by Telemart Discount cardholders to enjoy extra
treat while planning domestic travel through the combined effort of Telemart& Jovago Pakistan. Given
the sweltering heat, corporate visits or the holiday season, now is the most suitable time to avail this
discount on hotel bookings throughout Pakistan. Through this collaborative effort, Jovago.pk aims to
make traveling easier and affordable for travelers who want to explore the breathtaking sites of the
country. With around 2,000 hotels onboard, Jovago in line with its commitment to facilitate travelers
provides convenient hotels at an affordable rate. The recent alliance with Telemart is an extension of
this promise and it will play distinctive role in strengthening the tourism industry of Pakistan. Telemart
recently signed an MOU for strategic partnership with Avari & Beach Luxury Hotels.

All Telemart Discount Card holders can now avail Flat 10% Off on all restaurants at Avari towers & Beach
Luxury Hotel (Karachi). Buy any product from Telemart & get a free Telemart Discount Card to avail
discounts on more than 200 brands nationwide

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Telemart hosted Leopards Team at its Head Office on Friday, 19th August where an Official MOU
signing ceremony took place between the two companies. Leopards Courier Pakistan is one of the
biggest Courier Companies of Pakistan known for its wide spread network and premium quality service.

Telemart on the other hand is one of the best Online & Retail Network of Pakistan founded to serve the
customers with quality branded products with unmatchable level of service.

Telemart launched one of its kind Telemart Discount Card in the November last year which was
introduced in order to reward and value its customers. Telemart Discount Card is dispatched with every
order placed at Telemart and is currently housing over 180 Brands Nation-wide providing amazing
discounts to the Card Holders. Recently, Telemart joined hands with Leopards and welcomed them as
their Prestigious Discount Card Partner where Leopards Courier Pakistan will provide discounts to
Telemart Discount Card Holders at its express centers in Karachi, Lahore, Islamabad and Rawalpindi.

Present on the occasion to sign the MOU were Telemarts Young dynamic Directors Hamza Rauf Essa &
Ahmed Rauf Essa accompanied by Mr Sajid Khan (General Manager Strategy Leopards Courier Service
Pvt Ltd.) and Mr Muhammad Qasim Anis (General Manager Leopards COD & E Commerce Solutions).
Other members from Team Telemart present on the occasion were Mr Zeeshan Salem (Project Head
Telemart Discount Card) and Mr Saqib Khatri (Manager Telemart Online).

The detail of Discounts being offered by Leopards Courier Service Pakistan to Telemart Discount Card is
as follows :

1. 10 % on Domestic Shipments

2. 7 % on International shipments

3. 7 % on Loveline products

Commenting on the occasion, Nadine Malik, CEO Jovago Asia said, We are excited to collaborate with
Telemart. These two e-commerce players will contribute towards delivering convenience to our
customers

Our Vision:
Converging 24 years of rich experience and pioneer status by providing one stop solution for all of your
Cellular, Designer & Consumer Electronics need through Wholesale, Retail, Online & Corporate network.

Marketing Strategies:
Telemart makes sure that it is selling right products, at right price, in right place and using most suitable
promotional strategies.

Products: Telemart provides variety of product for all age of groups. It provides a solution of
different needs and luxuries at a single platform.It offers over 15000 products. Telemart is
offering different products given below: 24KT Gold Plated Products. Mobile phones Tablets TVs
and Video Laptops DSLRs IT products Home audio and theater Consoles and games Smart
Watches Home Appliances Perfumes Cosmetics Clothing

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Price: Telemart provides best prices and exclusive offers on different products. Moreover, it
offers discount card on more than 150 brands. In online services it offers cash on delivery
service. Credit card services are also part of telemart. Online and retail stores prices are same.

Place: Telemart is available everywhere in metropolitan cities like: Karachi, Lahore, and
Faisalabad. It is broadening its horizons by entering in market of USA and UAE. Telemart deliver
goods on your doorstep and you can shop its retail stores as well.

Promotion: Telemart promote its products and services through TV commercials and online
marketing. The more focus is placed on below the line marketing (BTL). Because it is customer
oriented and focuses on every customer individually. Discount cards are provided.

Market Segmentation:
From geographic point of view telemart target the individuals from metropolitan cities of Pakistan which
includes Karachi and Lahore. In demographics it focuses on male, female, transgender from the age
group of 15 to 30. From behavioral point of view it targets premium customers. From Psychographic
point of view it focuses on luxurious life style of people.

Unique Selling Proposition:

Our USP is that we have all four business models plus we provide better services to our customer. The
products we import, we wholesale the same and same goods are available on retail and online stores. In
result we sell them on feasible price which make us unique from others.

Market share:
Since there is no such report on market share of online stores but roughly speaking we consider
ourselves on second number after Daraz.pk.

CustomerRetention:
Our USP helps us retain customers. We deliver the products and render the services which we promise.
We take care of time maturity and price fluctuation. Usually we provide gift to our customers.

Competitors:
On a whole, we dont have any competitor but on different wings there can be many. In wholesale
different vendors from different areas competes us. In retail we dont have competitor because we sale
on very low price and provide premium services. In online business we have some competitors like:
Home shopping, Symbios, Ishopping.

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CorporateSocialResponsibility (CSR):
Telemart believes in creating social value. Recently on 14th August Telemart Pakistan run blood
donation drive in Indus Hospital in which their employees donated blood. On 23rd March telemart run a
traffic awareness campaign on rules and regulations.

SWOT Analysis:
1- STRENGHTS:

Financial Strength

Pricing

Online Market

Strong Management

2- WEAKNESSES:

Limited target market

Marketing not rigorously

3- OPPURTUNITIES:

International Expansion

New Technology

4- THREATS:

Existing competition

Brand loyal customers

Government Regulations

Political Risks

Volatile Costs

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