2. MARKET TREND
Last updated
Last updated
In accordance with the statistical office, the scale of South Korea’s reward platform (mileage) market size in 2019 is around 20 trillion KRW and is increasing by 20% each year. The global reward platform (mileage) market size is expected to be around 200 trillion KRW in 2018, according to Yano Research Group.
In addition, Business Research Insight states that the global cashback / reward app market size in 2022 was around 32 billion USD, increasing up to approximately 61 billion USD by 2031. Such statistical research studies show that the rise in prices across the global market is resulting in reasonable consumption and saving culture in general.
On the other hand, the unused reward points are also increasing as the reward platform market size is growing. In accordance with the Financial supervisory service, from 2017 to 2022, 8 South Korean banks (Shinhan, Samsung, KBKookmin, Hyundai, Lotte, Uri, Hana, BC) reward points that gets unused is in average approximately 104 billion KRW. The unused airline mileage points in the first semester of 2023 for Korean Air is 2.46 trillion KRW, Asiana airline is 904 billion KRW. In addition, the three major telecommunication companies in South Korea (SKT, KT, LG U+) have over 70.1 billion KRW worth of unused reward points from 2017 to 2022 August that the customers could not use.
Antavo, a consulting company that provides solutions on customer engagement and loyalty programme stated in their 2023 global customer loyalty report that in average, only 48.6% of reward points get used by the customers.
And a report from COLLOQUY who deals with loyalty programmes and relevant statistics and trends state that just in 2017, over 460 billion USD worth of rewards points was unused globally. IT research company Gartner’s report states that in 2019, 140 billion USD worth of reward points were unused just in USA.
The main purpose of having reward points are to improve customer loyalty, promote repeat purchases, provide experience to new services or products. If reward points are not used, such goals cannot be met and result in customers shifting over to competitors and therefore the unused reward points get recorded as liability and negatively impact on the company’s finances.
In addition, a new word ‘app-tech’, which is a combination of application and financial technology has been created in the global consumption market. App-tech is carried out by using smart phone apps to earn money and is a new form of financial investment.
This is usually in a reward form, by watching advertisements in applications or participating in surveys to earn reward points. In accordance with Buzzvil data, the number of participants that earned reward points through advertisements in 2023 is around 17 million people, participating around 25 times a day per person.
The participation ratio for different age range was 40s (26%), 30s (23%), 20s (19%), 50s (16%) in respective order, where 2030s and 4050s generations are quite similar. As shown in the statistical values, the participants who take part in advertisement reward system is spread across all age groups and proves that app tech has become a norm for consumers.
