The concept of mileage services was first introduced by airlines as a way to attract and retain customers. Delta Airlines and Korean Air were among the early adopters of this program. Over time, other industries such as finance, telecoms, and credit card companies began to implement similar programs.
Initially, the mileage programs were simple reward systems where customers were compensated with miles for using the service, which they could then use towards future purchases or redeem for gifts. With the advent of the internet, online advertising companies began to use the mileage system and the concept soon spread to other industries.
Today, the mileage system is widely used and known as “Points” across a range of industries, including telecoms, credit card companies, gas stations, online and offline markets, and general companies. It has evolved into various reward concepts such as discounts, payments, and cash payments.
The marketing for mileage programs, particularly for credit card companies, has expanded significantly. As a result, mileage programs have become more diverse and customers have begun to see them as a form of real payment, not just a reward program. With the development of blockchain technology, the combination of mileage and blockchain has provided increased transparency and security, making it possible for mileage programs to be used in even more areas.
In 2018, the total mileage accumulated by airlines and credit card companies in Korea was estimated to be around 6 trillion won. When combined with data from other industries, such as telecoms and shopping malls, the estimated size of the mileage market in 2019 was 20 trillion won. According to Yano Research Group, the size of the global mileage market was USD 178 billion (or 200 trillion won) in 2018.
The mileage market is growing at a rate of over 20% each year and is expected to continue to expand as smartphones become more prevalent. The growth potential of the mileage market is limitless and it is expected to expand globally as well as domestically.
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