HDFC Bank has given
women some credit, quite literally, by launching two new cards –
Solitaire and Solitaire Premium – targeting the female population
in India. Business head for credit cards and merchant acquiring at
HDFC Bank, Parag Rao, tells Meghna Mukerjee about the new
products.
Go deeper with GlobalData
I diamonds are a
girl’s best friend, credit cards are not far behind. HDFC Bank,
India’s second-largest private sector lender by market value after
ICICI and the country’s largest issuer of credit cards, has
launched two credit cards – Solitaire Premium and Solitaire –
targeting women.
HDFC Bank’s Solitaire Premium
is the first premium women’s card in the country.
HDFC Bank’s business head for
credit cards and merchant acquiring Parag Rao says the lender
identified a lack of any “focused products” in the women’s
segment.
“A lot of women are bread
earners – there is a penetration of more women in corporates, women
entrepreneurs are coming up,” says Rao. “This is a segment of the
future, where if we focus well and have the right kind of
proposition, we can become dominant.”
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By GlobalDataHDFC Bank’s Solitaire cards
were launched on 30 November and target both salaried and
self-employed women. They offer features such as health, travel and
shopping benefits, alongside more rewards such as fuel surcharge
savers and complimentary spa memberships.
The credit limit on the
lower-end variant card – Solitaire – ranges between INR75,000
($1,400) to INR200,000. The Solitaire Premium credit limit starts
at INR200,000 and goes up to INR500,000.
An all women’s team worked on
creating the Solitaire cards features to better understand and
emphasise what women want.
“We put together a team of
women product managers,” says Rao. We also picked select women –
reasonably senior within our larger bank – and they did a lot of
data churning.
“They looked at the way
transactions happen, behaviour over retail, how it moves in the
liability side and asset side, and what kind of women take
loans.
“We did focus group studies
across Mumbai and Chennai to get a flavour and voice of the
customer – voice of the women. We spent six to eight months
researching and the macro and micro data give us a lot of
confidence.”
The research behind the
Solitaire cards revealed that Indian women do not want
stereotypically top-of-mind benefits, says Rao.
“Surprisingly things like
jewellery were actually not interesting to women,” he
adds.
HDFC Bank sent some focused
emails to its top-end customers and got “very good responses”, says
Rao, adding that “the advertising is only through word of
mouth”.
The core advertising that is
being planned for 2012 would be done through women oriented
magazines and periodicals, and tie ups with women-centric events
and conferences.
The lender will also reach
out to its women customers who comprise 40-45% of HDFC Bank’s
entire 16m customer base.
“That is a large base for us
to market to. We are initially launching the Solitaire cards in the
top 10 [Indian] cities,” says Rao.
The two Solitaire cards are
part of an ongoing series of product launches that HDFC Bank
started rolling out in mid-2011.
According to Rao, though HDFC
Bank is the market leader in the overall cards segment in India, it
is not a leader in some “crucial segments that are prevalent and
have growth potential”. These areas are the bank’s
target.
“For instance, in the super
premium segment, typically, American Express is the market leader,”
he says. “That may be a small portion of the overall card business
in India but it is significant because of the kind of customers
that are there, and given the way the Indian economy is expanding,
it is among the fastest growing segments.”
Some segments in the
e-commerce space or deep geography where credit card issuance is
very low have huge potential in the next three to five years, Rao
believes.
“Our larger philosophy of
getting into niche markets and alliances has a series of product
launches these segments,” says Rao.
Earlier in the year, HDFC
Bank launched India’s first super premium card – Infinia – on a
MasterCard-Visa platform.
“We thought: Let’s take on
Amex upfront’,” says Rao.
HDFC Bank also launched three
travel cards, which allow customers to redeem points from multiple
airlines.
HDFC Bank aims to contribute
a portion of all expenditure on the Solitaire cards to a non-profit
organisation in India, SOS Children’s Villages, helping pay the
annual education expenses of 60 girl children.
A lower-value variant of the
women-centric cards may be launched, but HDFC Bank will now focus
on “getting the product right”.
Products launches have been
part of the excitement of an overall good year for HDFC Bank, adds
Rao.
“We are clocking Y-o-Y growth
of 70% versus what we see in the industry of 26%. On the book size
we have grown by 48%, but in the industry the book has de-creased
by 5%.
“Incrementally we source
approximately 80,000 to 85,000 new credit card customers in India
every month that is about 55-60% of the incremental monthly market,
which is all issuers put together. We are really targeting
aggressive growth next year.”
More co-brands in the premium
travel space can be expected in 2012. HDFC Bank will also be the
exclusive issuer of Diners International cards in India in the next
few months.
“Diners was one of the first
credit cards in India. From our research we find it has a strong
residual connect,” says Rao.
HDFC Banks has a retail
presence in 1,141 cities across India and “50% to 60% of the
payment values may come from the non-top-20 towns in two years
time”, says Rao.
HDFC Bank has more than 2,150
branches across India and, says Rao, aims to open another 450-500
branches in 2012.
