Hello everyone,

Welcome to the 126th edition of The Pattern, a weekly where we dive into the latest from the world of finance, economy and technology. Let’s get started.

A Punjabi singer from a tehsil in Jalandhar. India’s largest private bank with more customers than the population of Germany. One would think that these two worlds would never collide. Except, last week they did. And in spectacular fashion. HDFC Bank has long been the darling of investors and customers. Even a casual observer of the Indian economy will acknowledge the bank’s profound impact on the country’s financial services space—and arguably on the continent.

On the other hand, there’s Diljit Singh Dosanjh. A globally renowned performer who started out with music releases in partnership with local record labels of Punjab. After years of grunting it out, he catapulted into global fame through his music, acting and stage presence. In 2023, he became the first Indian artist ever to perform at Coachella Valley Arts and Music Festival.

On September 10th, these two worlds—chalk and cheese—merged. Diljit had announced his India tour, comprising 10 shows in as many cities. In usual fashion, tickets went on sale with an early bird pre-sale to be followed by a regular phased sale, where prices increase as the venue starts filling up.

The catch? The pre-sale was only open to folks possessing a HDFC Pixel credit card. What credit card, you ask? HDFC Bank is known for launching popular luxury cards including its Millennia, Regalia and Infinia range.

But Pixel is quite the departure. It’s a digital-only card with a focus on tech-savvy urban millennials and Gen Z. It targets this audience through not just its colours and positioning but also by allowing users to choose their own billing dates, their preferences for merchant cashbacks (from 5-6 pre-defined baskets of merchants) as well as the ability to change those merchants every 3 months.

Now, when Diljit’s concert tickets went live for a pre-sale for only Pixel cardholders, the internet erupted into commotion as passionate attendees (including this writer) jostled among their networks to find someone they could borrow the card from to book the tickets. This FOMO (fear of missing out) coupled with Diljit’s popularity proved just to be the thing that HDFC Bank needed to turn its Pixel card into a darling of the masses.

The numbers are astonishing. Almost 2 lakh tickets were sold in less than 3 days—two lakhs! Each ticket is priced between Rs 3,000 and Rs 20,000.

Most of them were bought using the HDFC Pixel card, which is how you build engagement on a brand-new product. At the right time. With the right audience.

“We’ve already sold 1.5 lakh tickets... On the first pre-sale day, 8-10,000 transactions were made in a single minute. We sold 1 lakh tickets within 15 minutes,” Janamjai Sehgal, Business Head of Saregama India Ltd. and organizer of Diljit Dosanjh’s concert, told NDTV.

The phenomenal genius of this pre-sale is in these numbers. Assuming 1.5 lakh tickets sold through Pixel card and a conservative average of 3 tickets booked in each transaction, at least 50,000 users got their Pixel cards and did an average transaction of Rs 20,000.

This is the stuff that business heads and credit card product managers dream of. Add to this the fact that another 1-2 lakh people would’ve applied and gotten the Pixel card but were unable to buy the tickets because they sold out that fast.

However, a customer acquired is a customer for life (real credit card churn is very low as most people never go to the hassle of surrendering it).

HDFC Bank now only needs to activate these users and build engagement to ensure that this one-time phenomenon turns into lifetime revenue-generating users. There, too, it has things going for it.

• First, the positioning of the card and the young audience overlap with the Diljit concert means that the bank has got the right people to buy the right card.

• Second, with the features such as cashbacks on transactions on Zomato, Amazon, Swiggy and Blinkit among others would go a long way toward repeat transactions – at least from folks who don’t already have exclusive high-reward cards or the co-branded offerings from each of these brands.

• Third, the catapult from a relatively unknown card in May’24 when it was launched to being the talk of the town will mean that it might continue to attract new young users who are already in the market for their first or second credit cards.

• Fourth and most importantly, HDFC Bank made it extremely easy for users to get this card. Existing customers of HDFC Bank got a digital card in less than five minutes by following a very simple onboarding process. This lack of friction is a big differentiator between this card and all others which try exclusive offers such as these but fail to attract a meaningful mass of applicants.

All in all, HDFC Bank might have a goldmine of young users on its hand which can then be up-selled and cross-sold infinitely. The bank just needs to play its cards right (get it?).

This is all for this week. I will see you next week. As always, leaving some reading recommendations below.

Reading List

• Banks with large commercial real estate exposure may be shortsellers' targets, says RBI Gov

• Vijay Shekhar Sharma repeats intention to reapply for payment aggregator license to RBI in due course

• HDFC in talks with global banks to offload Rs 8,400 crore in loans

• Consumption loan portfolio expands 15pc to Rs 90 lakh cr in FY'24: Report

• Bank lending to NBFCs slows, growth halves over last year

Thank you for reading. If you liked this edition, forward it to your friends, peers, and colleagues. You can also connect with me on Twitter here and follow FinBox on LinkedIn to always get all updates.

Cheers, Mayank