1️. The Current Landscape: Co-branded Cards on the Rise
- Co-branded credit cards have seen significant growth in India recently, now representing about 12-15% of the total credit card market. This figure is expected to grow to 25% by FY28.
- Popular brands like Amazon, Flipkart, and travel chains are seeing major success with their co-branded offerings, making it a win-win for both businesses and consumers.
2️. Why Co-branded Cards? What’s Driving the Trend?
- Increased Customer Loyalty: Customers love the personalized rewards these cards offer. From VIP-like perks to cashback and discounts, consumers are enjoying tailored benefits that keep them coming back for more.
- Enhanced Shopping Experience: It’s not just a card; it’s a loyalty program in your pocket! Whether it’s premium lounge access, hotel discounts, or points for spending, the value goes beyond simple purchases.
3️. Driving Factors: The Ingredients of Success
- Brands and banks are working together to enhance the customer experience.
- For businesses, co-branded cards act as an extension of their marketing, offering unique perks that differentiate them from competitors.
- For banks, these cards lead to new customer acquisition and increased card usage. It’s a true partnership benefiting all parties involved.
4️. How Co-branded Cards Fit into Evolving Consumption Patterns
- As Indian consumers become more aspirational, preferring premium brands over budget options, co-branded cards are helping fuel this shift.
- By partnering with banks, brands can access data to fine-tune offers, giving consumers personalized benefits that drive loyalty and repeat purchases.
5️. Global Insights: Learning from Mature Markets
- In markets like the US, co-branded credit cards are a staple, with almost every major retailer offering one. India is catching on, with brands embracing this model to boost customer retention.
- There are even NGO co-branded cards in some Western markets that allow philanthropic customers to earn rewards while donating to causes they care about.
6️. What Lies Ahead?
- As brands and banks continue to innovate with unique offerings, expect to see co-branded credit cards playing a crucial role in the credit card landscape.
- With a projected CAGR of 35-40% from FY24-28, co-branded cards are here to stay, and they’re likely to reshape the way we view loyalty programs in India.