As a latecomer in Korean credit card market, Hyundai Card has gradually increased the market share since it entered the business in 1999. With its tie with Hyundai motor group, the company branded itself as "Hyundai M Card". It started off by attracting buyer to consider using the card to purchase Hyundai automobile by offering discount. In later stages, the company has adopted the customer segmentation strategy to diversify its target groups of clients.
With the emphasis on market segmentation based on different groups of card holders, utilizing clients' card usage data, it has led to the unique customized service via alphabet card marketing activities. The strategy has led to great success, Hyundai Card received a Number One ranking in the Korea's National Customer Satisfaction Index.
The Korean credit card market has experienced a period of overheating due to a rapid expansion in the number of cards, reduced standards for issuing cards, etc. However, in recent years, Korean government has tighten up the policy in the credit card industry, and it results in lower % returns for the card issuer. The market has become saturated, consumers are having too many different options in card for different needs. But the fact is that most people are only using 1 or 2 cards, and the rising cost of operating business also presents an area of concern for major card player like Hyundai Card.
Hyundai Card is a credit card company in South Korea. Hyundai Motor Group and GE Capital are two of their largest shareholders. The company entered the credit card business in 1999 through the acquisition of Diners Card as a subsidiary. In 2001, the card's name was changed to "Hyundai Card".
Credit card business in South Korea is a competitive market. According to a report of The Economist, Korea has the equivalent of 4.4 cards for every member of the labor force. And Koreans made frequent transactions with credit card, on average, each Korean swipes card for 129.7 times in 2011. That number has well exceeded Americans (77.9) and Canadians (89.6).
Hyundai Card is the fourth biggest credit card issuer in South Korea. As per stats in May 2007, it captures a 9.96% share of the market. The Korean credit card market is led by Koomin (16.21%), LG (16.08%), Samsung (12.33). Among the major players in the credit card market, Hyundai is considered as a latecomer.
Hyundai card has continued to increased its market share in the competitive Korean market. As
per stats at the end of 2012, Hyundai Card had a market share of 14.3%. And Hyundai Card has
also received a good market reputation being ranked as Number One in the Korea's
National Customer Satisfaction Index.
Critical Marketing Issue
The credit card industry has underwent an adjustment period. Credit card company experience a
growth in the number of late payment and bad debts. And the card market has become saturated,
as there are too many card products in the market, which card caters for different need. In fact,
most card holder only uses 1 or 2 credit card to purchase. Another is the political factor of the
tightening government policy, it has also present a problem to card issuers as they are having
lower % of return in the business. In 2012, the
government barred card companies from
extracting higher fees from smaller merchants. And it also make it easier for customer to
compare interest rates across products and harder for less credit worthy borrowers to spend
beyond their means. As a result, many card issuing companies started to cut the budget and
become more conservative in doing their card business.
1. Try to move out of the business by selling it to a suitable buyer
Pros: If the company can find a suitable buyer and sell the business at a good price, once
and for all, the company does not need to face the problem...
Bibliography: HyundaiCard 's Marketing Strategy, by Chan Soo Park and Ronald D. Camp II, 2009
Hyundai internet home page (http://ir.hyundaicard.com/ceh/ho/cehho0101_01.hc)
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