Hyundai Card to enter Vietnamese market
Hyundai Card will make inroads into the Vietnamese market, joining Korean card issuers that have sought new income sources in Southeast Asia, the company said Tuesday.
This is the first time that Hyundai Card has made a direct entry into a foreign market.
On Monday, the credit card unit of Hyundai Motor Group signed a contract with Finance Company Limited for Community (FCCOM) to buy a 50 percent stake in the Vietnamese consumer finance firm for 49 billion won ($41.9 million).
FCCOM, a subsidiary of Vietnam Maritime Commercial Joint Stock Bank (MSB), mainly deals with personal loans.
After Hyundai Card’s acquisition of the stake in FCCOM, the card firm and MSB will operate FCCOM as a joint venture.
Hyundai Card will focus on sharing its know-how of financial products, marketing, risk management and digital finance, while MSB, which is familiar with the local market, will be in charge of sales and everyday operations.
According to Hyundai Card, the new joint venture will begin its operation starting from the second half of 2020, as it is expected to get approval from financial authorities in Korea and Vietnam within the first quarter of 2020.
Hyundai Card plans to deal with credit cards, auto loan and corporate financing in Vietnam.
The company has paid special attention to the growth of Vietnam’s financial market and the popularity of Hyundai and Kia automobiles there.
The personal loan market in Vietnam has shown a 60 percent annual growth rate on average, and the number of credit card users reached 7.4 million in 2018, up 27 percent from a year earlier.
Also, Hyundai and Kia cars took the top spot in the Vietnamese car market in terms of market share in 2018, accounting for 32 percent of the market.
Their sales doubled from three years ago.
Hyundai Card said it will maximize the synergy effect in the Vietnamese market through joint marketing with Hyundai Motor and Kia Motors.
“Given that our entry into Vietnam is our first expansion into the overseas market, it has a significant meaning for us,” a Hyundai Card official said. “Based on the Vietnamese market, we will expand our presence in the Southeast Asian market.”
Over the past few years, Korean card firms have made efforts for overseas expansion to boost their profitability through market diversification.
In July, Shinhan Card started a business in Vietnam, after acquiring Prudential Vietnam Finance in January 2018 and launching Shinhan Vietnam Finance.
KB Kookmin Card established its first foreign subsidiary in Cambodia in September 2018.
Lotte Card launched its Vietnamese subsidiary Lotte Finance in June and Woori Card has a local subsidiary named TUTU Finance in Myanmar.
Hyundai Card Vice Chairman and CEO Chung Tae-young