JCB seeks partners for regional expansion

The company currently has direct overseas operations in Nepal, Bhutan, Indonesia and Singapore. The Singapore unit is also responsible for Malaysia, the Philippines, Indonesia and Thailand, where the Bangkok office has management control of activities in Laos, Cambodia, Myanmar and Vietnam. 

JCB’s revenue in Thailand, where it has had a partnership with Krungthai Card (KTC) since 2008, is the largest within Asean, mainly because of the high number of tourists.

The Japanese company recently formed an alliance with Phonsavanh Bank in Laos, where it is also exploring a new partnership next year. 

It also inked a memorandum of understanding with Myanmar Pay-ment Union, which involves more than 20 banks, late last month.

In China, JCB has partnered with nine banks for a total of 6 million cardholders, while in South Korea there are 5 million JCB credit cards, 1.3 million in Taiwan and less than 1 million in Thailand. The company hopes to expand its business in the Kingdom because of the relatively low number of its cards in use here.

“The gross domestic product of countries in the region is growing, which is also reflected in their rising per capita income and is why we have to focus on regional expansion,” said Kimihisa Imada, deputy president of JCB International.

“Thailand is at the centre of Asean, which can help us expand business in the region,” he added.

Imada described KTC as his company’s most important partner in Thailand, boosting revenue and arranging attractive promotional campaigns. JCB’s Thai sales rose by 15 per cent year on year in the third quarter. 

Asia is also the most important market for JCB, which has some 70 million cardholders worldwide, mainly in Japan. JCB now has 55,000 cardholders in the Kingdom thanks to the relationship with KTC.

Rathian Srimongkol, president and chief executive officer of KTC, said the two sides would jointly create more marketing campaign throughout next year to attract more customers. 

In addition, KTC will seek more local merchants for JCB-KTC card usage, such as Japanese restaurants, fuel stations and supermarkets, to encourage more spending.

Piyasak Tejasen, senior executive vice president of KTC, said spending via KTC-JCB credit cards had soared 120 per cent year on year in October thanks to two-way promotion between Thailand and Japan. The card has captured more users among the Japanese community in Thailand.

JCB wants to increase not only the number of cardholders but also spending per card by 10 per cent, or Bt8,000 per month, he added.

Rathian said KTC had set aside Bt1 billion for marketing campaigns next year and to build on consumer spending from this year. 

The company will also form business partnerships with both local and overseas companies.

“We believe the marketing campaign launched in the current quarter will also drive our sales growth through next year, as well as double our profit [next year],” Rathian said.

Amid concern on the part of the Bank of Thailand about promotions by credit-card operators leading to people spending beyond their means, Rathian said KTC’s campaigns were not drawn up solely to enhance consumer spending but also aimed to get people to clear their debts.

“Marketing activities in the fourth quarter will lead to healthy revenue, which we want to use to offer value benefits to active cardholders. Active cards at present account for 70 per cent [of overall cards issued], against 60 per cent last year. KTC is confident of achieving targeted revenue growth of 10 per cent this year,” he said previously.

With the current quarter being the high season for credit-card and personal-loan businesses, KTC hopes revenue from October to December will grow by at least 20 per cent year on year, compared with 10 per cent in the previous quarters.

The company’s non-performing loans will be below 4 per cent at year-end, significantly lower than the 10-per-cent level at the end of last year, he said. He added that the high 2011 figure had been driven by the severe flooding in the final quarter, which resulted in a huge net loss of Bt1.6 billion for the company in the period. 

This improved to a net loss of Bt155 million in the first quarter of this year, followed by a net profit of Bt86 million in the second three months.