Bright spots in Asian credit card market despite Sars effect

Undeterred by the economic situation - or perhaps spurred on by it - major international credit card companies are determined to continue their penetration of Asian markets, according to recent research by business intelligence consultancy Fusion Consulting.

In the past week several international players initiated activities aimed at boosting their presence in local markets:

- In Australia, Virgin Money made its first foray outside the UK by launching the Virgin MasterCard credit card

- In Korea, Standard Chartered announced plans to enter the Korean market via an acquisition

- In Singapore, Citibank unveiled a new marketing program targeting cardholders with kids

But whether such initiatives translate into increased spending remains to be seen, especially with the uncertain economic climate and the lingering impact of the Sars outbreak.

Korean statisticians recently reported that credit card holders spent less both at home and abroad in the first quarter of 2003.

Things are looking up in Singapore however, thanks to the government's 'Step Out Singapore' programme, aimed at countering the negative impact of Sars, and the ongoing annual six-week long 'Great Singapore Sale'. Already, Singapore's DBS Bank has reported that spending by its 500,000 credit-card customers is "back to normal".

On-line shopping is an option for the more cautious consumer not yet willing to risk a crowd in the mall, and there is no better example than South Korea. The latest figures from the Ministry of Commerce, Industry and Energy reveal that B2C transactions surged to W5 trillion (US$4.2 billion) in 2002, compared with W2.6 trillion (US$2.2 billion) in 2001 and W700 billion (US$580 million) in 2000. By contrast, 75% of Internet users in Singapore don't want to shop online, mainly because of credit card fraud fears, says Fusion Consulting.

It takes two hands to clap. Credit card companies may offer all manner of programs and rewards, but only concerted efforts by both card issuers and merchants will put the spending act together.


About Fusion Consulting

Fusion Consulting is a business intelligence consultancy providing clear strategic advice on Asia-Pacific markets. With offices in Singapore and Hong Kong and a network of 200 consultants in 14 countries, the company conducts custom research and consulting to help companies understand their markets, compete more effectively and grow into new areas of opportunity.

Further information:
media@fusionc.com
www.fusionc.com



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