Hyundai Card announced the company and Starbucks Coffee Korea would launch a Starbucks-branded card in Korea. The two Seoul-based companies signed an agreement for the private label credit card partnership on June 15.
This is the first time that Starbucks Coffee is rolling out a branded credit card anywhere in the world outside of the United States. The Starbucks-branded card will be out in the latter half of 2020. Details of the card’s benefits, rewards and annual fees will be unveiled in tandem with the launch.
“Starbucks Coffee Korea and Hyundai Card have agreed to jointly design and launch the Starbucks branded credit card, offering a variety of services and benefits,” said a Hyundai Card spokesperson. “Hyundai Card will be in charge of supporting the card management and marketing campaigns.”
Having entered Korea in 1999, Starbucks hasn’t launched any kind of credit cards including those offering rewards here. Korea, noted for an explosive increase in the number of coffee lovers recently, has around several million Starbucks Rewards members on a Starbucks smartphone app. The company picked Hyundai Card as an exclusive partner in recognition of its brand power and branded card capabilities built over the course of managing partnerships with globally renowned top brands: eBay, Costco and the Korean Air Lines.Why Hyundai Card pushes ahead with branded card strategy
For Hyundai Card, Starbucks is not the first private label credit card partner. Ever since launching the private label credit card business in 2015, Hyundai Card has forged exclusive partnership with a series of global household names such as eBay, Costco and most recently, the Korean Air Lines – leaders in the e-commerce, retail and airlines. (*Private label credit cards in Korea can be used at other retailers instead of the branded partner alone.)
Lying behind years of partnership are Hyundai Card’s unique business strategies. Under the partnership, the brand owner and Hyundai Card burden product development and marketing costs and share profits together. Card issuers are able to slash costs and gain new customers at the same time. When it comes to conventional credit cards for rewards, card issuers are supposed to manage all expenses and revenues from the card products. Brand partners are only supposed to attract subscribers.
Also through the partnership, card issuers and their partner brands may get an access to an integrated customer base and thus expand the pool of customer-related big data. Hyundai Card’s advanced machine learning and big data analysis technologies can be mobilized to analyze customers’ consumption pattern and their taste, which will eventually make possible for both parties to offer customized services. The services may include coupons at shopping destinations that specific customers prefer. Partners may also design various systems to capitalize on together.
Customers are also encouraged to spend more with private label credit cards to gain more rewards than with conventional credit cards. That would naturally enhance brand loyalty and recognition. PLCCs now make up a crucial pillar of Hyundai Card’ business. When adding several hundred thousand new customers in a year is considered a success in the local credit card community, Hyundai Card could have accumulated over a million annually since launching the branded card business.
Aside from the global brands, Hyundai Card’s local brand credit card partners come from a variety of fields and they are all No. 1 players in their own fields – from Hyundai Motor and Kia Motors to E-mart supermarket chain and SSG e-commerce, both belonging to the country’s top retail mogul, Shinsegae.
Prompted by Hyundai Card’s success, other Korean credit card issuers have also been jumping on the bandwagon of private label credit card business recently. Similar trend was spotted in the United States, the home turf of credit cards, from way before.Hyundai Card’s PLCC partnership with global big players
|Card release date
|Starbucks Coffee Korea
|Second half 2020
|Korean Air Lines
The Korean Air Lines-branded card, released in April 2020, is affiliated with its Skypass frequent flyer program and comes in four types according to annual fees. Cardholders’ purchases are converted into heftier bonus miles than other conventional airline mile credit cards already out there. Various other travel-related benefits including discount coupons for flight tickets and duty free shopping are provided.Costco Korea
Costco migrated from Samsung Card, an 18-year partner in Korea, to Hyundai Card for its private label credit card. Costco card, to be valid for 10 years from May 2019, offers 1 to 3% reward points on purchases. “We chose Hyundai Card because it fits into the global standard we pursue,” said Costco Korea in a release.eBay Korea
The partnership card offers the greatest benefits at the e-commerce sites run by eBay Korea such as G Market, Auction and G9. Particularly when the cardholder makes payments with SmilePay, a payment system developed by eBay Korea, 2.3% of the purchases are converted into cash points. The 2...3% rate is almost eight times the basic conversion rate at 0.3% for non-cardholders. The card has gained so much traction that it attracted over 830,000 new subscribers in just two years.