More companies release credit cards as PLCC market grows
Rolling out a private label credit card (PLCC) is becoming a popular marketing strategy for companies trying to attract loyal customers.
The practice is quickly spreading in numerous industries, ranging from retail to beauty, fashion, food delivery and hotel.
PLCCs are credit cards designed with benefits and rewards from a specific brand. The cards are issued in partnership with a credit card company.
Like many credit cards, PLCCs usually have an annual membership fee.
PLCCs used to be common at department stores and discount marts. Starting last year, it has become more common to see branded credit cards tied to cafes, beauty and furniture brands and e-commerce operators.
Just last month, online shopping platform WeMakePrice introduced a PLCC with KB Kookmin Card.
Users are given up to 5 percent of purchases made at the company back in points, which can be used like cash on the platform.
Those who spent more than 500,000 won ($440) on WeMakePrice in one month will also earn 5 percent of the amount they spent on Netflix, coffee chains like Starbucks and convenience store franchises, including GS25, the following month. The 5 percent is given in WeMakePrice points.
Cosmetics firm Amorepacific and hotel chain Marriott International have partnered with Shinhan Card.
In June, Amorepacific introduced a PLCC that offers up to 15 percent of purchases back in points that can be used to buy products from the company’s cosmetics brands, like Innisfree, Sulwhasoo and Etude.
It comes in four different patterns that feature cosmetics products, like eye shadow.
Marriott International’s PLCC, introduced in March, offers a voucher for one night in a hotel every year.
The annual fee is 200,000 won ($180), but more than 7,000 cards have been issued so far.
“PLCCs are a good way to lock in customers because the points they are given for their purchases have to be spent on our platform,” said Lee Yoon-seong, a spokesperson for Woowa Brothers.
Woowa Brothers, operator of food delivery platform Baedal Minjok, introduced a PLCC with Hyundai Card in November last year.
The cards come in eight different patterns that feature different foods like tteokbokki (spicy rice cakes), a fried egg and fish.
“To young consumers, what matters just as much as the card benefit is the design. We hoped the cute and eye-catching images would appeal to customers,” Lee added.
Other brands that recently launched a PLCC include Starbucks, fashion brand Musinsa, furniture giant Ikea and Naver.
PLCC partnerships also benefit card companies because they can gain more customers and collect customer data.
“A card company cannot know what products our customers bought at which store using our credit card,” said Ha Young-jin, a spokesperson for Hyundai Card. “But under the partnership with a brand, we can receive that data and use the information to come up with card benefits that better meet the demand of potential customers.”
BY JIN MIN-JI [email@example.com]