Financial Daily from THE HINDU group of publications
Monday, Dec 29, 2003
Financial Daily from THE HINDU group of publications Monday, Dec 29, 2003 |
|
|
|
|
|
Home Page
-
Credit Cards & Debit Cards Money & Banking - Credit Cards & Debit Cards Marketing - Marketing Research Plastic money is here, there & everywhere
Nithya Subramanian
New Delhi , Dec. 28 THE age of plastic money seems to be here to stay. A recent American Express `Share of Wallet' study among cardholders across the six cities of Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad reveals that card usage is highest for dining and shopping, while it is also popular for travel-related expenses such as air tickets, hotels and car rentals. The result of the Indian survey is in line with the other markets in the Asia Pacific region that were surveyed. Cardholders in countries such as Singapore, New Zealand, Thailand, Malaysia, Hong Kong and Australia spend 10-30 per cent more on the same services. While travel and entertainment-related expenses continue to be "big ticket" expenditure items, Indian consumers are increasingly using the plastic alternative for everyday spends such as petrol, hospitals, telephone services, home furnishing and good old eating. The survey indicates that consumers in the country are increasingly looking to use credit cards to pay school dues for their kids. In fact, this has spurred American Express to tie up with the Delhi Public group of schools to facilitate parents to pay by card. Right now, India is at a low 11 per cent in comparison to other countries in the Asia-Pacific region when it comes to using plastic money for recurring bills such as utilities, subscriptions and insurance. In this category, Malaysia tops at 42 per cent, Taiwan at 31 per cent, both even higher than Hong Kong and Australia. According to the wallet study, the frequency of card usage is expected to go up in the forthcoming months. About 32 per cent of the consumers surveyed anticipate using the card more frequently in the next six months, while 18 per cent said that they would add more credit cards to their wallets. Interestingly, 39 per cent consumers in Thailand also anticipated increased card spends while about 19 per cent expected to acquire more credit cards in the next six months. However, in the developed markets of Australia, Singapore, Hong Kong and New Zealand, the number of credit cards are expected to remain the same, obviously due to saturation. But corporate cards continue to have good potential. According to American Express, there are about 30,000 mid-market companies in India, with sales revenues from Rs 5 crore to Rs 500 crore incurring a total travel and entertainment expenditure is $2.7 billion. This expense in India is expected to grow at the rate of 8 per cent and is estimated to exceed $5 billion by year 2006. The use of corporate cards can bring savings up to 40 per cent for the middle market companies through process savings and purchase savings. The credit card market in India, according to American Express, is growing at 20-25 per cent per annum. From the half-a-million cardholders in 1992, the population is at a whopping nine million today. Also, the total billings on cards are estimated at over Rs 10,000 crore, growing at 20 per cent per annum.
Article E-Mail :: Comment :: Syndication
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|