Egg plc, Europe’s leading digital financial services company, announces
today that its first consumer proposition in France will be a market
leading International VISA Card, la Carte Egg, which consumers can apply
for at www.egg.fr with effect from Saturday, 2nd November 2002.
A highly attractive market
Egg announced earlier this year that its international expansion would
begin in France, a highly attractive market.
France is the world4s third largest card market in terms of balances.
However it is driven by store cards and private label networks, which
account for the majority of outstanding balances, rather than traditional
credit cards. Our focus group research indicates that French consumers
believe the interest rates are too punitive and are now looking for
alternative ways to manage and service their debt. Egg believes that la
Carte Egg will prove attractive to consumers who are now seeking a
different way of managing their money.
Internet penetration set for explosive growth
Recent research from MORI*4 indicates that internet penetration in France
has increased by a phenomenal 25% over the past 12 months. The Egg France
Index shows that 32% of French adults (15 million) are using technology –
be it Internet, Digital TV or WAP. 26% of French consumers (12 million) are
using the internet, with the geographic majority of users residing in
Paris. 24% of French internet users are now banking online, and this is
expected to grow to over 7 million by the end of 2004.
La Carte Egg – France’s first VISA card with cashback
Egg4s first product in France will be the most competitive and compelling
card in the French market, backed by a brand which has researched well
amongst the focus groups we have been running for the past 18 months. la
Carte Egg will be unique to the French market in that it will offer 1% cash
back on all purchases as well as offering a highly competitive APR of 12.99%.
In addition Egg is offering a great deal to consumers at launch whereby
customers applying before 31 December 2002 will have their annual fee
waived for the first year (normally Euro 35 p.a.) and can enjoy 5% cash
back on purchases up to the year-end.
Marketing and distribution
Egg will launch in France on the back of a major brand and marketing
campaign including over 2,300 TV spots and 7.5 million press and magazine
inserts. This is expected to reach over 20 million consumers including 94%
of Egg4s target market. This target market is a group of consumers – 11
million in total – aged between 25 and 49, urban, with a cosmopolitan
lifestyle, above average incomes and with internet access.
In addition to our direct distribution plans, in order to accelerate
customer acquisition and provide physical outlets where customers can
purchase la Carte Egg, Egg is pleased to announce a new retail distribution
deal in France with Avenir Telecom, a leading distributor of communication
products. This partnership allows Egg to distribute la Carte Egg through
Avenir Telecom4s retail network of 59 Internity stores throughout France.
Internity staff have been specially trained and incentivised by Egg to
handle applications from new customers in-store.
Management team
Our French management team combines the best of Egg’s existing experience
with local and international market expertise. The two senior people
managing the French business are:
Richard Duvall (Chief International Officer): a founder and launch director
of Egg in the UK who is responsible for Egg’s international development;
Olivier de Montity (President du Directoire, Egg France); founder and
former CEO of online broker Fimatex, and founder and CEO of Zebank.
Building a business of scale
Egg announced the completion of its acquisition of Zebank in May this year
for Euro 5.5 million, giving it a scaleable call centre in Tours, a digital
platform and a qualified workforce. Since that time, we have undergone a
recruitment campaign, aimed at increasing our French workforce to a total
of 600 people by the end of this year, with a total French workforce of
1,000 by the end of 2004.
As announced last week at our 3Q results, Egg has invested #19.4m (Euro
30m), in its French business to date and intends this profit and loss
account investment to grow to Euro 160 million by the end of 2004. Egg has
indicated that it expects this to include a #50m (Euro 80m) brand and
marketing spend – of which Q4 spend is likely to account for #8 m (Euro 12
m) – and #15m (Euro 24m) on development costs. This investment is expected
to acquire 1 million customers.
As in the UK, we are targeting our product at an upmarket customer base
ABC1, aged 25-49 with above average income. This is important as focused
targeting in our marketing impacts positively on our credit performance.
Managing our new lending book in a controlled and disciplined manner is a
key focus. As you would expect, we will remain diligent and careful with
regard to the credit quality of our customers.
In time, Egg intends to introduce further products into the French market,
which should lead to it achieving similar levels of income per customer by
the end of 2004 as are currently being enjoyed in its UK business.
Paul Gratton, Chief Executive of Egg plc, said:
“We are very excited about developing our business in France, which is an
important first step in our aim to become the leading international online
financial services company.
“We believe that the market conditions for our launch are highly
attractive; we have a compelling proposition, a meaningful and distinctive
brand, an online banking market about to take off and a new breed of
consumer who is demanding to understand and control his money more
efficiently.”
