Hyundai Card, pioneer of Korean PLCC market

[First in a two-part series]

This year, PLCC (Private Label Credit Card), is the buzzword in the Korean credit card industry. As of the end of May, there were 12 PLCC cards already released by six credit card companies in Korea, and with two more new PLCC products in the pipeline, a total of 14 or more PLCC cards are scheduled to debut this year. The industry believes that this phenomenon is greatly influenced by the success of Hyundai Card’s PLCC series. Last year, Hyundai Card intensively launched PLCC products in cooperation with Korean Air, Starbucks, and Baedal Minjok (Baemin).

Until last year, most of the credit card companies in Korea except Hyundai Card did not handle PLCC, but now all seven Korean credit card companies operate PLCC products. Credit card companies are partnering up with popular retailers among millennials and Gen Z to launch PLCC products. In the face of increased competition with the big tech companies’ entry into the financial market, PLCC market is expected to continue to expand and competition is set to intensify for the time being, as the credit card issuers need to secure new revenue sources.

From left: Korean Air Card, Statbucks Hyundai Card

Hyundai Card’s PLCC reorganizes credit card market

With the successful introduction of PLCC products in the market, Hyundai Card is the pioneer of PLCC segment in the industry. To strengthen its product planning and sales capabilities, Hyundai Card moved up PLCC department’s position to division in August last year.

Hyundai Card, which launched Korea's first PLCC “E-mart e card” in May 2015, formed PLCC partnership with Hyundai Motor and Kia Motors in 2017. Then followed eBay Korea in 2018 as well as Costco, and SSG.COM, an e-commerce company affiliated with Shinsegae Group, in 2019. By the end of 2020, Hyundai Card partnered up with 10 different companies for its PLCC series. Hyundai Card has launched or is preparing to launch more PLCC products with 14 champion brands including SOCAR, MUSINSA, Genesis, and NAVER.

Thanks to the success of PLCC series, the number of individual members of Hyundai Card last year stood at 9.26 million, an increase of about 7 percent in just one year. The company’s performance also increased significantly. Hyundai Card recorded an operating income of 32.8 billion won last year, an increase of 51 percent year-on-year, boasting the fastest growth in the industry. In less than three weeks of its launch, 50,000 copies of Starbucks Hyundai Card were issued. Considering that each PLCC product focuses on providing benefits that are tailored to a specific retailer, the results are remarkable.

Reasons why champions chose Hyundai Card

All brands that have signed a PLCC partnership with Hyundai Card are leading industry players in each field. “Those companies that highly evaluated Hyundai Card’s data science capabilities chose Hyundai Card as their PLCC partner,” said a Hyundai Card spokesperson.

Although many companies, including credit card issuers, have vast amount of data collected, it is difficult to classify and refine those data to create a meaningful analysis.

In October 2015, Hyundai Card announced that the company will invest heavily in data science with the aim of becoming a leading financial tech company, and announced the company’s new slogan “Digital Hyundai Card.” Today, Hyundai Card has the best AI-based data science technology and analysis capabilities among all financial companies in Korea.

Domain Galaxy: Hyundai Card’s data alliance

As a leading financial tech company, Hyundai Card believes that PLCC and data science are inseparable. Thus, the company not only provides PLCC products but also serves as a facilitator of cross-marketing activities among its PLCC partners. Such cross-marketing platform is called “Domain Galaxy: Data Alliance by Hyundai Card.”

Hyundai Card has formed a data alliance with PLCC partner companies and is working on a new concept of collaboration.

It is a collaboration model in which Hyundai Card provides marketing plans and extracts target customer groups for each partner using the data collected. Only the top players in each field have become PLCC partners with Hyundai Card, naturally forming what is known as the “Champion’s Club.”

Hyundai Card has partnered with 14 major industry leaders to form a group “Domain Galaxy” and provides a data-based marketing platform service called “Galaxy North” to the group members.

Hyundai Card is already operating “True North,” a data platform that provides marketing promotions such as coupons by selecting customers who have high marketing effects for Hyundai Card customers.

Hyundai Card acts as a facilitator within Galaxy North, discovering collaboration opportunities between Hyundai Card and Domain Galaxy members, as well as developing and operating the Galaxy North platform for sophisticated data analysis.

On October 14, 2020, a Domain Galaxy Council was held for PLCC partner companies at Hyundai Card headquarters in Seoul, Korea

Domain Galaxy members providing marketing benefits through Galaxy North are able to reduce their advertising costs and instead invest the savings into developing customer benefits. At the same time, the company who received marketing cooperation request from a Domain Galaxy member, can provide benefits to its customers with no additional cost. The key advantage of Galaxy North is that it is easy to collaborate among multiple partners, and that innovative data alliances can be formed without integrating customer data.

For customers, such marketing promotions reduce advertisement fatigue from receiving bombarding marketing promotions and receive only selected and attractive card benefits.

This year, a total of six marketing promotions have been completed through Galaxy North, and four additional promotion projects are scheduled to be carried out soon. One of the promotion campaigns was requested by SOCAR, Korea’s largest car-sharing service provider, which required an incredibly detailed customer segmentation analysis. The promotion was to provide discount coupons to gas station chain GS Caltex’s customers who reside in the Metropolitan area and use the GS Caltex’s smart refueling service at least four times a year. This shows that incredibly specific targeted promotion service has become available.

Hyundai Card Vice Chairman and CEO Ted Chung explains the Hyundai Card Domain Galaxy to executives of PLCC partner companies on October 14, 2020

What Hyundai Card wants to achieve using data science is “super customization.” In the past, segmentation marketing focused on classifying customers by criteria such as gender and age. With super customization, it is possible to provide customized services optimized for each individual based on customers’ consumption behavior analysis.

Domain Galaxy's goal is to establish a unique data alliance that enables strong cooperation among members of different business fields, customers, and interests through Galaxy North. In addition, Domain Galaxy will serve as a catalyst for the growth of each partner.

“Companies are concerned that if they do not use technologies such as AI, they will be pushed out of competition in the future,” said a Hyundai Card spokesperson. “However, at the same time, there are companies that subordinate their investment in data science according to each industry needs, so it is not easy for all companies to develop data science technology on their own.”

Hyundai Card is looking to further develop its marketing promotion service. The company will extract and analyze the data of its PLCC customers who showed highest response to their marketing promotions and find similar target groups among those customers of each partner company.

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