2. KICKERS WORLDWIDE FIGURES
2
C O M PA N Y P R E S E N TAT I O N
Number of pairs sold 4 260 000 4 140 000
Turnover (export 50%) 123 500 K€ 121 500 K€
Customers 6200 6250
2011 2012
3. A GLOBAL PRESENCE, BUT STILL MOVING ON
• Presence in more than 70 countries
• 5 subsidiaries to date: USA, Germany, Spain, Scandinavia, Holland
• 7 licensees on strategic and historical territories:
UK, South America, South East Asia, Marocco and Middle East
• 15 distributors
• 2 agents
C O M PA N Y P R E S E N TAT I O N
6. 6
THE OPPORTUNITY SPACE
HONG KONG MARKET
MAJOR ECONOMIC INDICATORS
• Retail sales is estimated at over 50 billion usd in 2013
• Retail is 64,000 establishment, is 320,000 jobs (9% of the
active population)
7. 7
LATEST TRADE PERFORMANCE
• The world’s 9th largest trading economy
• The world’s 11 largest exporter of commercial services
THE OPPORTUNITY SPACE
HONG KONG MARKET
8. 8
CURRENT ECONOMIC SITUATION
• The world’s freest economy
• The world most service-oriented economy, with services sector
accounting for more than 90% of the GDP
• The most competitive economy in Asia
• The second largest recipient of foreign direct investment (FDI) in
Asia, after Chinese mainland
• The third largest source of FDI in Asia, after Japan and Chinese
mainland,
THE OPPORTUNITY SPACE
HONG KONG MARKET
9. 9
HONG KONG AS A REGIONAL CENTRE
• A popular venue for hosting regional headquarters or
representative offices
• The world’s busiest airport for international cargoes
• The world’s third busiest container port
• The second largest private equity center in Asia
• The second largest stock market in Asia, the sixth in the world
• The third largest foreign exchange market in Asia, the sixth in the
world
THE OPPORTUNITY SPACE
HONG KONG MARKET
10. 10
ECONOMIC RELATIONS WITH THE CHINESE MAINLAND
• The most important warehouse for the Chinese Mainland
• The largest foreign investment source of the Chinese mainland
• The key offshore capital raison centre for Chinese enterprises
• The Chinese mainland as Hong Kong’s largest source of external
investment
THE OPPORTUNITY SPACE
HONG KONG MARKET
11. 11
INFLUX OF MAINLAND TOURISTS
• Industry players are increasingly strategizing their businesses to
target Mainland Chinese tourists.
• Mainland Chinese tourists contributed up to 50% of their annual
sales.
• Agreements established between Hong Kong and Mainland China
has helped ease entry barriers of Mainland Chinese entering Hong
Kong and helped to boost retail sales in Hong Kong.
• After China eased visa restrictions on 15th Dec, 2010, 4 million non-
permanent Shenzhen residents can travel to Hong Kong, spending
an additional HK$5.6 billion per year
THE OPPORTUNITY SPACE
HONG KONG MARKET
12. 12
GEOGRAPHIC LANDSCAPE
HONG KONG A STRATEGIC GATEWAY TO CHINA
THE IMPORTANCE OF HONG KONG TO THE CHINA BUSINESS
• Hong Kong is an ideal platform to enter the Mainland Chinese
market and/or the rest of Asia
• This is attributable to the country’s stable political climate, low
corporate tax, strategic location and East-meets-West culture
• Retailers restructured their businesses to capture the mainland
Chinese tourists. Stores are lavishly decorated and aim to create a
strong impression amongst Mainland Chinese consumers
• With a surging middle class segment, Mainland Chinese consumers
are expected to grow more affluent and continue travelling into
Hong Kong due to the latter’s close proximity, goods-and-services-
tax free policy and wide availability of international brands
13. 13
2nd EASIEST COUNTRY IN THE WORLD TO DO BUSINESS*
• Foreign direct investment in Hong Kong is straightforward and easy
to establish (6 days to establish a business, 1 day to get a
construction permit)
• International players are also attracted by the country’s long
opening hours, absence of sales tax, low corporate tax (23% of the
gross profit) and well-established transport infrastructure
• Still few challenges related to official bureaucracy or corruption in
Hong Kong
• Now a challenge in entering an already crowded retailing
environment, encompassing many Asian and Western brands
* Source: “Doing Business 2013”
RETAIL MARKET
HONG KONG
14. 14
RETAIL MARKET
HONG KONG SHOPPING HABITS
MAIN SHOPPING MALLS AND AREA
• Shopping malls dominate retail development in Hong Kong. Local
consumers appreciate the comfortable shopping environment and
high-street brands offered by these shopping malls
• The main shopping districts in Hong Kong include Central, Causeway
Bay, Tsim Sha Tsui and Mong Kok
17. 17
THE OPPORTUNITY SPACE
CHINA MARKET
China Citizen Average Annual Disposable Income (USD)
2005 2006 2007 2008 2009
Urban Area 10,493 11,759 13,786 15,781 17,175
Rural Area 3,255 3,587 4,140 4,761 5,153
Source: National Bureau of Statistics of
China
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
20 000
2005 2006 2007 2008 2009
RMB
Year
China Citizen Average Annual Disposable Income
Urban Area
Rural Area
18. 18
THE OPPORTUNITY SPACE
CHINA MARKET
MIDDLE CLASS SPENDING POWER
• The economic definition for a middle-class family in China is one who has an
annual average household income of over 150,000 RMB (about USD 17,000) and
household assets of over 620,000 RMB (about USD 80,000).
• The number of China’s middle-class is estimated to be 100 million today and to
reach 400 million in less than 20 years time.
• Most middle-class people fall into the following 4 categories:
– self-employed entrepreneurs
– managerial staff at foreign companies
– middle and senior managers at state-owned enterprises
– professionals
19. 19
KEY TRENDS IDENTIFIED IN CHINA MARKET
Continued trend of increased domestic shopping (vs. overseas)
• Continued growth of store openings by all brands
• Improved timely availability of latest collections
• Brands narrowed price gap between China and other markets
• Overseas spend - lower price & better product selection
Tier 2/3 cities continue to be the “new” battleground
• Proliferation of real estate development in Tier 2/3 cities
• Consumers’ attitudes in Tier 2 & 3 cities towards luxury and wealth similar to Tier 1
• Talent shortage and rising labor costs are hurdles for growth in Tier 2/3 cities
Brand building efforts more localized & increasing
• Chinese-themed campaigns and support for social welfare enhance relevance of
brands/image
• China is front and center in Brands’ global marketing programs
CONSUMER PROFILE
CHINA
20. 20
KEY TRENDS IDENTIFIED IN CHINA MARKET
Consumers expect comprehensive and differentiated service experience
• Consumers are becoming more sophisticated and demand better service
experience
• Brands continue to build large flagship stores and localize after sales services
• Many retailers “buying back” franchise operations to regain control over brand
Continued importance of online platforms
• Company websites (in Chinese) and online community (social networking)
platforms remain critical marketing channels in China, particularly among
consumers age 25-44 (TMALL.COM, 360Buy, Joyo Amazone,…)
• Emergence of online factory outlets, overseas websites and 3rd party agents are
driving internet sales growth (but still small)
Gifting increasing & more diversified
• Gifting remains a significant driver of luxury goods purchase in China
• Gifting has become more diversified in brands selection with rising popularity of
anonymous cash cards
CONSUMER PROFILE
CHINA
21. 21
GEOGRAPHIC LANDSCAPE
KEY REGIONS & CITIES IN CHINA
CONDITONS OF CATEGORIZATION OF CITIES
• Level 1：municipalities, special administrative regions, cities with GDP greater
than RMB160 billion and population greater than 2 million
• Level 2：sub-provincial cities、special economic zones 、capitals of provinces
• Level 3：14 coastal cities of open economy、high economy growth and high
income level
APPROXIMATELY 655 CITIES IN CHINA
• 160 cities with populations of 1 million or more
• 12 metro areas with populations greater than 5 million
• Plan for 8 mega cities (10+ million) by 2025 -Beijing, Shanghai,
Chengdu, Chongqing, Guangzhou, Shenzhen, Tianjin and
Wuhan
24. Significant government support in central China, where many 2nd tier markets are
located
• This region was boosted by the Chinese stimulus package to improve the
infrastructure and transport links
New commerce centers have appeared across the mainland, including
• Nanjing –one of China’s leading producers of IT products, petrochemicals and
automobile components
• Wuhan –most populous city in central China and key transport hub –the “Chicago
of China”
• Kunshan–produces more than half of the world’s notebook PC’s
Influx of people into the cities has also aided in the development of the retail
market
• Business Monitory International predicts retails sales to grow by 74% between
2009 and 2014
OPPORTUNITIES IN THE 2nd AND 3rd TIER CITIES
CHINA
25. ENVIRONMENT
• A combination of deregulation and the need for foreign expertise has created
opportunities in the wind and water sectors:
• China is expected to have approximately 75GW of installed wind power capacity
by 2020
• Inner Mongolia has strong potential for onshore wind power generation
► China has increased its targets for solar capacity to 20GW by 2020
• Solar station installations planned in: Gansu, Inner Mongolia, Qinghai, Shaanxi
and Xinjiang
• Energy-saving products will be in high demand as China’s green goals in the latest five
year plan are pursued.
• Wastewater will also see significant investment as the government looks to build new
facilities and upgrade existing ones:
• China’s wastewater output will reach 79 billion tons by 2015 (vs. 57.2 billion tons
in 2009) due to rapid urbanization
TOP SECTORS OF OPPORTUNITIES IN 2ND AND 3RD TIER CITIES
CHINA
26. TOP SECTORS OF OPPORTUNITIES IN 2ND AND 3RD TIER CITIES
CHINA
CONSTRUCTION
• Chinese authorities will spend approximately US$3.96bn on rural road building
• Airport projects planned in 2nd and 3rdtier cities
• With an investment of US$67.5 billion till 2015, a total of 56 new airports will be built,
16 airports will be relocated and 91 will be renovated and expanded
• Wuhan Tian he Airport T3 + Expansion: USD 2.3 billion
• China will be investing billions of dollars throughout the country to enhance its ports
27. TOP SECTORS OF OPPORTUNITIES IN 2ND AND 3RD TIER CITIES
CHINA
TRANSPORTATION
• China is the largest vehicle market in the world with a double-digit sales growth
every year:
• Auto industry’s focus shifting to 2nd and 3rd tier cities
• There are approximately 7 cars for every 100 people in these cities
• As wages in the 2ndand 3rdtier cities continue to rise, consumer demand expected
to rise –first entry level autos and then onwards to foreign brands
• The automotive sector growth rate in 3rd tier cities exceeding those of the 1st and
2nd tier markets:
• By 2020, 3rd tier cities market share will be approximately 55%
28. 28
CONCENTRATING ON CHINA’S CLUSTERS
CHINA
Focusing on certain city clusters can yield
greater benefits
• Opportunity to exploit scale
Top two clusters in each size category (2015
projection)
• Mega: Shanghai, Beijing
• Large: Nanjing, Xiamen-Fuzhou
• Small: Xi’an, Hohhot
City cluster strategies
1. Focus on cluster size, not city size,
2. Look beyond historical growth rates to factors
of age, culture, politics that affect customer
preferences,
3. Look at industries already in the cluster
4. Allow clusters to be flexible as they will slowly
change over time,
Source: Harvard Business Review
29. FEW ADVISES TO CONCLUDE:
• If your sole purpose of looking to China is for low cost manufacturing
you are probably a decade too late
• Domestic consumerism will be driving China opportunities
• China’s growing consumerism and urbanization means China is more
than just Beijing and Shanghai
• In selling to China your best targets are 2nd and 3rd tier city clusters
• Do your due diligence because China is at a pivotal point in its
development (draw on the services of the federal and provincial Trade
Commissioners)
• Don’t forego common sense just because the numbers look big…
