Starbucks-Hyundai Card partnership raising eyebrows

Starbucks Coffee Korea CEO Song Ho-seob, left, poses with Hyundai Card Vice Chairman Chung Tae-young at the U.S. coffeehouse chain's The Jongno R branch in Seoul, Monday. / Courtesy of Hyundai Card

By Kim Jae-heun

On the day of Hyundai Card's ambitious decision to partner with Starbucks Korea, under which the card issuer agreed to issue a Starbucks-branded credit card, a local civic group sued Starbucks Korea CEO Song Ho-seob for violating the law on infectious disease control here.

The Public Welfare Committee (PWC) filed a lawsuit to the Seoul Southern District Prosecutor's Office claiming Starbucks Korea “ignored the government's strenuous effort” to control the spread of COVID-19, and insisted the partnership could possibly have a negative impact on customers in terms of COVID-19 outbreaks by attracting them to offline stores for sweepstakes events.

Starting from May 21, Starbucks Korea has been giving out free gifts for customers who purchased 17 drinks at their stores including three special beverages launched as part of a summer edition. One of the gifts called the “Summer Ready Bag” became so popular that people lined up in front of Starbucks coffee shops every day to receive the giveaway.

This reward program caused a huge “coffee-buying frenzy” in South Korea, with one customer being confirmed to have purchased 300 cups of beverages on May 23 and taken home 17 bags, while leaving the drinks behind at the branch in Yeouido, Seoul. Starbucks let store visitors take away the coffees for free.

The consumer craze has been witnessed many times before whenever Starbucks Korea launched seasonal campaigns giving away free gifts like the popular planner it collaborated on with Moleskine.

Hyundai Card believed it would benefit greatly by signing the agreement with Starbucks Korea. “For sure, this is not a good start and it will definitely have negative impact on their collaboration,” an industry source said.

“Of course, the impact will not be great but there has already been damage to its reputation and this can lead to fewer people applying for Hyundai Card's special card for Starbucks.” The so-called “Hyundai-Starbucks card” is set to be released in September, or October at the latest.

According to both companies, nothing has been decided on what kind of benefits the special credit card will offer.

The collaboration drew attention because it is first time a major local card issuer clarified its plan for credit cards specially designed for a particular food and beverage brand. Before the collaboration, there were no such cases of Starbucks Korea introducing a private label credit card. The two companies plan to prepare product concepts and marketing strategies by taking full advantage of its meaning as “the first card with a logo of Starbucks.”

Hyundai Card said the issue has nothing to do with the company and it has no further comment.