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Retail Opportunities and Chinese New Year

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Retail Opportunities and Chinese New Year 1 How to maximise retail opportunities from Chinese New Year 24 January 2019 Housekeeping 2 • Today’s webinar is scheduled to last 1 hour including Q&A • All dial-in participants will be muted • Questions can be submitted at any time via the Go to Webinar ‘Questions’ screen • The webinar recording will be circulated after the event Agenda 3 1 May Yang, Marketing Manager, UnionPay International • Features of Outbound Tourism in 2018 • Performance of Key Markets in Europe • Mobile Payment for Outbound Travelers • Travel Destination Campaign - Europe 2 Marho Bateren, Market Intelligence Analyst, Planet • Introducing Chinese New Year • Chinese New Year Shopper Behaviour • Tourist Arrivals Forecast 3 Q&A Session About UnionPay International 4 UnionPay International (UPI) is a subsidiary of China UnionPay focused on the growth and support of UnionPay’s global business. • In partnership with more than 2000 institutions worldwide, • Established card acceptance in 174 countries and regions • Issuance in 50 countries and regions. • UnionPay International provides high quality, cost effective and secure cross-border payment services to the world’s largest cardholder base • Ensures convenient local services to a growing number of global UnionPay cardholders and merchants. 5 May Yang Marketing Manager, UnionPay International 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Marho Bateren Market Intelligence Analyst, Planet Shopping and Arrivals Growth - Summary – 2018 31 Top 5 Destination Markets Tax Free Sales Vouchers / Avg. Transaction Arrivals -1% Turnover Transactions Values (ATV) Total Sales France 3% -2% 5% 4% United Kingdom -10% -11% 1% 3% -6% Italy 7% 3% 4% 6% Total Spain -8% -5% -3% 2% Vouchers Germany -4% -9% 6% -1% +6% Top 5 Source Markets Total ATV Tax Free Sales Vouchers / Avg. Transaction Arrivals Turnover Transactions Values (ATV) +3% China 6% -5% 11% 3% USA 12% 3% 8% 7% Total Arrivals Russia -18% -15% -3% -8% Taiwan 10% -5% 16% 5% Hong Kong -11% -7% -5% 5% Shopping and Arrivals Growth – Chinese Tourists – 2018 32 6% Total Sales Top 5 Destinations Markets Tax Free Sale Vouchers/ Avg. Transaction Arrivals -5% Turnover Transactions Values (ATV) Total Vouchers France 13% 8% 6% 6% United Kingdom -13% -14% 2% 3% +11% Italy 15% 3% 12% 3% Total ATV Germany -5% -17% 14% 3% Spain -4% -4% 1% -2% +3% Total Arrivals Introducing Chinese New Year 33 What is it? • A Chinese festival that celebrates the beginning of a new lunar year • It is the most important celebration in the Chinese calendar • Often referred to as the “Spring Festival” • Each year is named after one of twelve animals, which feature in the Chinese zodiac. • Each animal has certain lucky characteristics of which the year will be associated with. • 2019 will be the year of the Pig Introducing Chinese New Year 34 How is it celebrated? Chinese new Family time and Firecrackers and Red envelopes and decorations reunion dinner fireworks New year gifts Red is the main colour for Chinese New Year is a time Fireworks have become an A common gift is a red the festival for families to come together indispensable part of the envelope containing money. festivities Red is believed to be the The important New Year's Like at Christmas, people colour of prosperity. Eve dinner is called 'reunion Firecrackers were exchange gifts during the dinner’. traditionally used to scare Spring Festival. away evil spirits. Chinese New Year is the Key Shopping Event of Q1 35 Spring Festival Sales 2018 Total Golden Week 5.2% of Sales in Store Total Chinese New Year Country % SiS for CNY 3.2% of Sales in Store ITA 3.9% of Sales in Store ESP 3.8% of Sales in Store GBR 2.9% of Sales in Store FRA 2.9% of Sales in Store DEU 2.4% of Sales in Store Wk 1 Wk 3 Wk 5 Wk 7 Wk 9Wk 11 Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 Quarter Weekly SiS Average % Chinese National Sales in Store % *Chinese new year 2018 dates 08/02/2018-22/02/2018 (includes week prior to festivities) 2018 CNY in Europe was hampered by many factors 36 Spring festival’s is historically bigger than in 2018 CNY % Share of Sales in Store Number of Chinese terrorist 4.6% stock market attacks in & Real Estate UK & turbulence France during 2017 3.2% Narrowing Catalan Referendum of Price Differentials Sterling was at its January strongest Floods in since the EU Paris referendum 2017 2018 Chinese spending power reduced 6% YOY vs. Euro 37 Euro & GBP vs RMB EUR/RMB GBP/RMB € 0.15 £0.13 € 0.14 £0.12 € 0.14 £0.12 € 0.13 £0.11 € 0.13 £0.11 € 0.12 £0.10 CNY CNY 2017 2018 € 0.12 £0.10 Number of factors that COULD affect CNY 2019… 38 Will the Chinese still spend in the same way in Europe? Slowing Chinese Economy US-China Trade Wars Crackdown on Daigou Trading Although GDP growth is still strong As the trade war escalates, it will not be easy From 1st Jan 2019, new regulations will compared to many countries, it has been for the Chinese government to use public require most online vendors to get approval slowing over the last 8 years. spending to boost investments due to its from the relevant regulatory authorities mounting debt. before selling. GDP growth went from 10.6% in 2010 to 6.6% in the last quarter …However, Chinese Arrivals for this Quarter are set to increase 12% YOY 39 Chinese Tourist Arrivals Outlook – Jan-Mar 2019 Jan-18 to Mar-18 TOTAL GBR FIN Jan-19 to Mar-19 +3.9% +12.0% +1.9% +22.8% +13.0% +15.2% IRL DEU -11.2% +7.7% +4.5% +11.2% PRT CZE +13.0% +15.2% +4.7% +17.2% ESP FRA ITA AUT -5.1% +17.5% +7.7% +2.2% +8.9% +3.3% -8.0% +47.7% The week prior to CNY registered the 2nd highest ATV of 2018 40 Spring Festival ATV 2018 Pre Chinese New Year Total Golden Week €979 ATV €834 ATV Country ATV for CNY FRA €1,800 ATV ITA €1,083 ATV ESP €677 ATV DEU €635 ATV GBR €371 ATV Wk 1 Wk 3 Wk 5 Wk 7 Wk 9Wk 11 Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 Quarter Weekly ATV Average Chinese National ATV *Chinese new year 2018 dates 08/02/2018-22/02/2018 (includes week prior to festivities) 64% of high net worth individuals plan to travel for CNY 41 Abroad of at home? Which Travel Destinations this year? (more than one destination) 36% Plan to Travel within China Europe - 39% Japan & South Americas - 36% Korea - 22% Africa - 29% South east & South Asia - 23% 64% Plan to Travel Abroad Source : Hurun Research Institute and ILTM China 2018 Digital is increasing in importance 42 Sharing gifts Catching up digitally 768 Million users used WeChat to send digital red packets During the six-day holiday period, 229.7 billion messages were sent on WeChat. This represents 78% of active platform users & 55% of the entire population of China. 2.8 billion posts and 17.5 billion minutes of voice recordings were also sent. Reunion dinner delivered Research On CNY eve, more than 300,000 Chinese families ordered reunion dinner delivery through Chinese Tourists like to research their purchases online, even before they travel. Alipay and Koubei, a restaurant review and local services platform. Attributes such as the brand’s country of origin and the story are very important. Source: The Drum & China National Tourism Administration 43 Top Tips Top Tips for Chinese New Year 44 45 Q&A 46 For further questions or comments, please contact: [email protected] 47 thank you.
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