"Couldn’t Do It Even During Family Month and Vacation Peak"... Card Companies Worrying About Chuseok Marketing (Comprehensive)

Government Considering 'Special Quarantine Period' During Chuseok Holiday
Minimizing Marketing Such as Chuseok Gift Discounts

[Asia Economy Reporter Ki Ha-young] As the novel coronavirus infection (COVID-19) prolongs, credit card companies continue to struggle with marketing during peak seasons. Amid concerns over a decline in card payment amounts due to the resurgence of COVID-19, they are conducting only minimal marketing.

According to the industry on the 7th, each card company is reviewing the timing and scale of Chuseok events. This is because the government has recommended refraining from visiting hometowns and relatives as much as possible after Chuseok to prevent the spread of COVID-19, and is considering applying social distancing measures equivalent to level 2 nationwide during the special quarantine period from the 30th of this month to the 4th of next month, which is the holiday period.

Currently, only some card companies have launched Chuseok events. Woori Card is running the 'Chuseok Season Merchant Event' until the end of this month. It offers discounts when purchasing Chuseok gift sets at online malls such as Market Kurly and Wemakeprice, and gift certificates when purchasing gift sets at department stores and large marts. Hana Card is also conducting gift certificate giveaways and discount events when purchasing Chuseok gifts at E-Mart, Homeplus, Lotte Mart, and Nonghyup Hanaro Mart. In other words, they are conducting minimal marketing for Chuseok.

Decrease in Marketing for Travel, Duty-Free Shops, Amusement Parks, etc.

Last year, not only gift purchase events but also fierce competition for airline tickets and hotel discounts targeting overseas travel demand took place. However, this year, airline ticket discount competitions targeting overseas travel demand have disappeared due to COVID-19. As sales in industries such as travel, duty-free shops, amusement parks, and movie theaters?where card companies fiercely competed in marketing?have significantly decreased, card companies' marketing expenses have also declined. According to the Financial Supervisory Service's Financial Statistics Electronic System, the selling and administrative expenses of seven specialized card companies in the first quarter of this year were 678.925 billion KRW, a 4.54% decrease compared to the same month last year.

Card companies cannot give up marketing despite the shrinking card payment amounts caused by weakened consumer sentiment. According to data compiled from eight specialized card companies (Shinhan, Samsung, KB Kookmin, Hyundai, BC, Lotte, Woori, Hana Card), the growth rate of personal credit card payments has slowed since the third week of August (17?23), when COVID-19 began to resurge. The total amount increased by 3.2% (316.9 billion KRW) compared to the same period last year (August 19?25), but offline consumption decreased by 3.3% (264.7 billion KRW) due to social distancing measures.

An industry official said, "With the decrease in card payment amounts due to the resurgence of COVID-19, there are concerns about declining sales, so we cannot avoid marketing," adding, "We have no choice but to conduct marketing according to government policies." Another card company official expressed concern, saying, "We suffered a big blow as we could not conduct large-scale marketing during peak seasons like Family Month and vacation season, which are considered major periods for card companies," and added, "We are worried that this trend may continue through the holidays and until the end of the year."

This content was produced with the assistance of AI translation services.