HSBC campaign to fight for credit card market share

In a bid to expand their share of the credit card market in Taiwan, Hong Kong and Shanghai Banking Corporation (HSBC) will be offering gifts to those who refer new customers.

HSBC hopes to put more credit cards in the hands of Taiwanese consumers by offering gifts such as tickets to the new Disneyland in Hong Kong to those who refer eligible friends and family to apply for cards.

To sweeten the deal, the bank will also give round-trip tickets to Hong Kong to those who achieve enough referrals.

Bank officials noted that the effort is specifically designed to expand what is currently a small segment of Taiwan’s already saturated market.

“Now is the time to grow the market share,” said Tiger Chan, senior vice president of HSBC’s Credit Card Center.

Chan expressed optimism that the latest campaign would do just that.

“No one has visited Disney and it will be a very popular destination,” he said. “And this is available to everyone.”

A local representative of VISA International, however, referred to the credit card market in Taiwan as “saturated.” According to Christopher Clark, Country Manager, Greater China Region, Taiwan, eligible cardholders in Taiwan already have four to five credit cards in their wallets. He said that most banks now focus on increasing usage.

For example, Clark noted that 53 banks issue VISA cards which comprise roughly two-thirds of the market.

“There are currently 25 million VISA cards currently in circulation,” he said. “That’s among the nine million people eligible to hold one. Everyone eligible already has an average of three VISAs.”

Clark said that the banks mostly just compete in getting their customers to use their cards though also some work to “cannibalize” their competitors card base.

Martin Spurling, Deputy CEO at HSBC Taiwan, however, still sees an opportunity for his bank to increase its market share by pushing circulation of its credit cards beyond the current 750,000.

“This, to the best of our knowledge, is the biggest campaign by HSBC here, but we believe we have achieved a critical mass that enables us to push this campaign,” he explained.

Spurling conveyed that pushing up usage comes from a stronger customer base.

“We think that to get a cobrand, such as Mitsubishi or Toyota, you have to have a million credit cards. If you don’t, you have two choices: go for it or sell off you portfolio.”

Meanwhile, Spurling feels that HSBC is well poised to accomplish the former.

“We’re a big player. We have had the fastest growth in retail assets among foreign banks. In December, we had the fastest growth of all banks. We think this is the beginning of a trend and we’re making a commitment to Taiwan.”

Cobranding, according to Spurling, is particularly important in Taiwan.

“More than any country I’m familiar with, Taiwanese consumers are very savvy credit card users,” he explained. “They know how to leverage their benefits.”

Such benefits include, for example, discounts for using a particular card at a certain store or obtaining perks, such as frequent flyer miles. Higher usage, therefore, comes from strong cobranding which, in turn, comes from high circulation.

While up and coming, Spurling says that HSBC still has some work to do in terms of simply getting cards into people hands. But he sees this in positive terms of future growth.

Chinatrust, he notes, already has 6 million cards out.

“China trust can’t get any more cards so they, like Taishin and Fubon, are focused on usage. At HSBC, we don’t have that luxury, but we have that opportunity. We are turning our weakness into our strength. For example, if you talk to your friends, most of them will have a China Trust card. China Trust couldn’t run this campaign.”

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