A presentation on the New Chinese Consumer given to guests at an Environics Lunch Event by Priscilla Sze, owner of our partner company, N-Dynamic Market Research & Consultancy in Shanghai.

1. 1
The New
Chinese
Consumers

2. Table of Contents
2
2
3
A New Playground for Consumerism
A New Relationship with Brands
A New Breed of Workforce
1

3. 33
A New
Playground for
Consumerism

4. New Wealth
Affluent Middle
Class
Common Folks
Top Tier
• RMB 500K +
• 9,740,000 cards
• (1% of card population)
• RMB 200-500K
• 20, 390,000 cards
• (2% of card population)
• RMB 100-200K
• 33,050,000 cards
• (3% of card population)
• RMB below 100K
• 1,020,820,000 cards
• (94% of card population)
Source: UnionPay data based on 1,084,000,000 credit and debit cards in 2014
Basic Segmentation of Credit/Debit Card Owners
• Based On Spending Levels Per Annum
4

5. 5
Chinese People’s Spending on Luxury
• In 2014, the Chinese economy reached 123 trillion RMB
• By 2015, China will represent 1/3 of global luxury spending
33%
67%
China Rest of the globe
Source: McKinsey & Co.
China 2014 Entire globe 2000
Nearly three
times the
economic
output of the
entire globe
in 2000
123
trillion
RMB

6. followed by Conrad (105%) and Indigo (45%)
Keen Interest in Travel
• Domestic travel (including business) grows by
• Overseas travel also grows by
75%
• Hyatt is China’s top choice – business up by
203%
137%
6
Source: UnionPay data based on 1,084,000,000 credit and debit cards in 2014

7. 287.1%
Chinese Tourists Now Buy the World
• Phenomenal outbound consumption growth
7
Source: UnionPay data based on 1,084,000,000 credit and debit cards in 2014

8. 8
Growth of Sending Kids Abroad to Study
• Number of Chinese studying abroad from 1978 to 2012
0
10
20
30
40
50
60
1978 1989 1992 1998 2001 2004 2007 2010 2012
By10,000
Source: The Chinese Luxury Consumer White Paper 2012

9. High Spending Power in Tier 2 cities
• Top 10 ranking by spending levels
 Shenzhen replaces Beijing as the top spending city in 2014.
 Watch out for Zhengzhou, Nanjing, Wuhan, Chengdu and Chongqing. They are
now in the top 10 !
9
Source: UnionPay data based on 1,084,000,000 credit and debit cards in 2014

10. 1010
A New
Relationship
with Brands

11. 11
A Love or Hate Relationship?
• LV grows by 45.7%, with continued strong appeal across segments
45.7%
(Top Tier : 66%, New Wealthy: 65%. Affluent Middle Class: 64% and even common folks
at 16%)
Source: UnionPay data based on 1,084,000,000 credit and debit cards in 2014

12. 12
Smaller Brands are also Growing
• Givenchy up by 131.2%, with preferences amongst all segments
131.2%
( Top tier : +145%, New Wealthy : + 183%, Affluent Middle Class + 123%, even
common folks at 78% growth)
Source: UnionPay data based on 1,084,000,000 credit and debit cards in 2014

13. 13
Overview of Luxury Brands’ Growth
Source: UnionPay data based on 1,084,000,000 credit and debit cards in 2014

14. 14
Lack of Trust in Brands in China
• When it comes to make buying decisions, Chinese rely on
people they know more than any marketing or sales channel
90%
74%
Word-of-mouth
Information from people I
know (family, friends, co-
workers)
Social Media
Such as Weibo, WeChat,
Renren
Online reviews
Expert review sites,
forums, or product
comparison
Usage
Importance in
decision
77%
39%
70%
44%

15. 15
Faith in Brands with Social Responsibility
• Chinese consumers strongly believe in brands with social
responsibility
53.9%
of Chinese consumers
think companies have
the responsibility of
creating a sustainable
society
58.6%
of Chinese consumers
state that they are willing
to buy products from a
company with more
social responsibility

16. 16
Aspirations to Foreign Brands in General
• China is adept at decoding countries as brands
• Imported products are regarded as superior and trustworthy
• Brands are now tapping into the positive impressions and
emotions they associate with the country
Romantic & Artistic Enthusiastic Strong & Innovative
Friendly, Leisurely &
Quiet

17. 1717
A New Breed of
Workforce

18. 18
37.3%
41.1% 40.9%
44.8%
50.0%
54.8%
56.9%
60.3%
58.4% 58.4%
57.5% 57.8%
35%
40%
45%
50%
55%
60%
65%
Creativity Collaboration Adaptability Customer focus
80s' Base=1756
70s' Base=416
60s' Base=308
Gen-Y regard their companies perform worst in “creativity” and then
“Collaboration” and “Adaptability”. Gen-Y state that their companies perform best
in “customer focus” but they in fact aspire to “customer focus” least
Attitude towards Corporate Culture
of Current Company
Q3:What do you think about your company performance on below segments? 1 – very bad, 5 – very good.
Source: N Dynamic IBM Generation Y study 2012

19. 19
Thank You!
N-Dynamic Market Research
& Consultancy Ltd.
www.n-dynamic.com
Contact:
Priscilla Sze
priscillasze@n-dynamic.com