New cards are making pets more affordable palsJang Yeon-jeong, 29, who has been married for two years, bought her 1-year-old puppy Sena from an acquaintance last year. Jang spends about 40,000 won ($39) to 50,000 won a month on food for her puppy, and with monthly vaccinations and visits to the pet salon, she can spend up to 150,000 won on the dog every month. Early this year, Jang had to carry Sena around to three veterinary clinics for treatment after she accidentally swallowed a plum seed. Jang spent more than 1 million won in total because Sena needed stomach surgery, CT scans and blood tests.
“My puppy’s medical costs are tantamount to my husband’s,” Jang said. “Many newlywed couples want to raise a pet because having a pet helps babies’ emotional development, but they hesitate because of high costs.”
As a growing number of Koreans are concerned about the cost of raising pets, credit card companies are preparing to tap into the pet market again.
Late last year, Hana SK Card, Industrial Bank of Korea and Daegu Bank launched credit cards with exclusive benefits for purchases of pet-related costs. This year, KB Kookmin Card also caught the card industry’s pet fever.
The financial industry’s first wave of pet love started six years ago when the government changed the animal protection law in 2008.
Over the past six years, the local pet market has grown to 1.4 trillion won as more young people choose to live alone and are embracing the Western idea of living with animals as companions.
In the meantime, card companies have been introducing products with benefits for pet-related purchases, hoping the new market will be a breakthrough for their stagnant sales.
“As the existing credit card market has become saturated, card companies are targeting niche markets in order to expand their market share,” said Baek In-soo, an official at the Credit Finance Association of Korea.
IBK’s “Very Good! My Love Pet Card” is popular among pet lovers because they can put pictures of their own furry friends on the card. The card gives a 10 percent discount at about 4,500 pet-related shops across the nation, ranging from beauty shops, cafes and hotels to training centers. If card holders purchase 400,000 won or more in a month, they will get a 15,000 won discount on their card payment the next month. Spending 2 million won or more results in a 60,000 won reduction. The card also provides a 5 percent discount for services at affiliated pet funeral halls. IBK has issued about 1,500 pet cards.
Kim Ju-eun, who has one puppy and three cats, got an IBK pet card with her pets’ pictures on the front from her husband in May. She was thrilled to hear about the 10 percent discount she would get if she had to spend 100,000 won at an animal clinic.
“I started using this card because we can never expect discounts at animal clinics,” Kim said. “I think a 10 percent cut is very helpful.”
The 34-year-old homemaker uses the pet card for all her daily expenditures because her discounts increase as her previous purchase record builds up. Kim said she saves 40,000 won to 60,000 won a month because the card also offers a 5 percent discount at supermarkets.
“The average fixed cost for our pets is about 300,000 won a month,” Kim said. “We can save up to 800,000 won a year [with the card].”
“I have been raising my puppy Darong since 2002, and this card has been really useful lately as it offers discounts for not only hospitals but also pet cafes and online shopping malls selling pet products,” said Choi So-young, 32.
KB Kookmin Card’s recently released “Companion Love Card” gives similar benefits. The card gives discounts of up to 50,000 won on monthly payments, but the minimum amount of purchases made in a previous month to which the discount is applied is just 20,000 won.
Hana’s “My Pet Master of Life” has a partnership with the Korean Kennel Club to grant card owners the status of associate members and allows for discounts at about 30 affiliated shops in the country. Despite the small number of shops, the card is in high demand among pet owners because they can get memberships and discounts at supermarkets, online shopping malls, cram schools, communications and transportation.
Customers who use the card every month get 50,000 won worth of coupons for mobile shopping once a year.
Daegu Bank’s “DGB Pet Love Card” offers a 20 percent discount at animal clinics and 10 percent off for any pet-related purchase, as well as a 10 percent discount for purchases at large supermarkets and 20 percent at certain restaurants. The bank uses 10 percent of its profits from the card to raise a fund for stray animals.
The very first card for pet lovers was introduced in May 2008. Two large card businesses pioneered the market by creating a new membership system for pet owners. But at the time, profits were lower than expected because of the global financial crunch, causing companies to drop the card.
The value of the local pet market plunged from 180.2 billion won in 2008 to 168.7 billion won in 2009. However, the companion animal card industry has been revived and seems to more closely meet the needs of pet owners.
Six years ago, card companies were offering discounts that pet owners didn’t really need, such as for pet training centers or microchips.
“What pet lovers want the most is discounts on clinic fees, but most of those clinics are run by self-employed individuals, which makes it hard for card companies to make partnerships,” said an industry insider.
“Because demand for pet cards is limited, it is hard to expect immediate profit increases,” said an official in the financial industry. “But it is a niche market with high growth potential.”
BY SHIM SAE-ROM [firstname.lastname@example.org]
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