With Black Friday falling in the US on Nov. 29, South Korea’s credit card operators are rolling up their sleeves to lure online shoppers with discounts and giveaways, industry data showed Wednesday.
Overseas online retail customers -- dubbed “jikgu-jok” in Korean -- are expected to flock to various shopping sites in the upcoming season, running from Black Friday in end-November, to Cyber Monday in early December, up to Christmas and year-end.
According to Korea Customs Service, both the number and amount of spending by “jikgu-jok” were tallied 21 million and $1.5 billion, increased 42 percent and 20 percent respectively.
To draw online shoppers’ attention, the credit card operators vying one with another by offering better discounts. Some firms even hold raffle events offering a vehicle, a first-class round ticket and movie ticket giveaways to encourage customers to use more of their cards during the shopping season.
Starting Nov. 15, Shinhan Card will be offering a $10 discount for those spending $130 and a $30 discount for $500, officials said. Hyundai Card offers a 15 percent discount within the limit of $75 for purchases over $100 on the US-based online retail giant Amazon on Nov. 29, starting from 9 a.m. Korean time.
Marking a contrast, the business condition of credit card industry has worsened because of slowing consumption and reinforced regulations by the financial authorities requiring them to cut credit card commission fees. The authorities have been upping pressure on card companies to lower their commission on stores affiliated with their credit cards, such as by reducing their marketing costs instead.
The combined net profit of eight card issuers here, including Shinhan, Samsung and KB Kookmin, came to 940.5 billion won ($805 million) in the January-June period, down 2.7 percent from a year earlier, according to the data from the Financial Supervisory Service.
“It is true that majority of card firms reduced promotions, although it remains one of our marketing strategies. Since the industry started going through more difficult time compared to three or four years ago, we’re in a dilemma,” said an official from one of the top-tier card firms here, who wished to remain anonymous.
“We can’t miss big annual events such as New Year, Chuseok and Black Friday. If we don’t provide any incentives, it’s just a matter of time when they will turn away,” the official said. Marketing expenses and revenue during the holiday season by the card company was not available.
By Jie Ye-eun (firstname.lastname@example.org