breakfast habits change as they grow highest rate among all age groups. older. Take hot cereal as an example, They are also the most likely to eat cold AMERICAN there is a clear relationship between age cereals or even dim sum (both 49%). APPAREL and consumption incidence: Isotonic and energy drinks, which have • 15-24 years old: 37% become a trend in the West over the BRANDS • 25-34 years old: 45% last decade, are also most popular with CRAZE IN • 35-49 years old: 53% this group, with 22% drinking it regularly • 50-64 years old: 64% for breakfast. By contrast, the more HONG KONG [insert chart?] ‘traditional’ drinks such as tea (48%) and coffee (34%) are less popular with them, Ipsos Hong Kong The percentage of those aged 50-64 although still at a reasonably high level. Thought Piece consuming hot cereal for breakfast is [insert chart?] 2013 1.7 times that of the younger generation (aged 15-24)! The greatness of hot The next group (25-34s), having proudly cereal is not to be denied and much grown up and leading an active life, appreciated by the older clan. As one sees small changes in their breakfast becomes older, a lower cholesterol diet habits; a bit less milk (58%) or fruit and is preferred for health and well-being, vegetables (34% – lowest score among making hot cereal the ideal choice over all age groups). Instead they drink more others. coffee (38%), could be as wake-up routine, as stimulant to cope with their YOU ARE WHAT YOU EAT busy lifestyle; and interestingly, more The younger generations (15-24s) in yoghurt (26% – most consumed within Hong Kong have specific needs and this age group). wants. In the past, milk may not have [insert chart?] been a popular food item in Asia, however, 64% of this younger segment Age brings more responsibilities – and now regularly drink milk in the morning more stress, too, to the 35-49 year olds. (and 29% have yoghurt drinks) – the page 1

Since American traders moved to Hong Kong in 1842 following the First Opium War, American brands have proliferated to include Levi’s, Calvin Klein, GAP and DKNY..

The enthusiasm for American apparel brands has continued with American Eagle Outfitters and 7 for all Mankind entering the market in recent years.

But the craze for American clothing brands soared with the grand opening of the Abercrombie & Fitch (A&F) flagship store in Aug 2012 in Central.

In keeping with the label’s tradition, A&F flew in their hottest models hand-picked from global A&F stores for the opening debut where they flexed and posed for photo ops with Hong Kong’s enthusiastic fans. For an entire week, crowds surrounded the shirtless A&F models parading around various districts in the city of Hong Kong and on top of double decker buses driving through Central.

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YOUNGER POPULATION brands. Stylish and wholesome (aka down youth (18-24) and working class (25- SHOW THE STRONGEST to earth) appeared to drive overall liking 34) show strong affinity with American RESONANCE WITH of American labels amongst consumers labels. Positive affinity for American AMERICAN BRANDS 15 – 34. Though ‘fashionable’ (72%) and brands has room to grow amongst Hong ‘youthful’ (67%) score the highest among Kong consumers since only 10% of American brands have consistently the 11 attributes asked, these did not have consumers 35+ show some feelings of stood for freedom, independence; strong predictive influence on overall liking. liking with 29% indicating some dislike evoking the rugged west with the towards American casual wear brands. rebel as hero. This positioning seems When buying American labels, this segment compelling for a significant minority of of consumers most strongly identifies with Hong Kong’s younger consumers. In a the ‘comfort’ (89%) and ‘fit’ (48%) attributes recent survey from Ipsos Hong Kong of offered by the brands. Since comfort 1000 consumers, 22% of consumers and fit come up as strong predictors for aged 15 – 34 liked American casual wear overall liking, it is not surprising that the

18-24, female MPI = 12K Working full time Only 10% of MHI = 40K UsuallyUsua , I will buy clothes using University graduate my oown money. But when I go consumers 35+ in first job shoppingsh with my parents, ththey will usually fund my Lives with parents show some feelings purchases. Disposable income is of liking. the entire salary

Favorite American brands: A&F, Hollister, GAP

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breakfast habits change as they grow highest rate among all age groups. older.25-34, Take female hot cereal as an example, They are also the most likely to eat cold BUILDING A CLOSER there is a clear relationship between age cereals or evenI have dim a sum favorite (both 49%). RELATIONSHIP WITH Working full time andMPI consumption= 30K incidence: Isotonic andrepertoire energy drinks,of brands which have HONG KONG CONSUMERS MHI = 60K • 15-24 years old: 37% become athat trend I visit in the whenever West over I the With the recent re-ignition of the • 25-34 years old:Post-graduate 45% last decade,go are shopping. also most After popular with having a child, I shop passion for American labels, brands • 35-49 years old:education 53% this group, with 22% drinking it regularly less frequently than now face the task of deepening • 50-64 years old: 64% for breakfast. By contrast, the more Married with one child when I was single. So, their engagement with Hong Kong [insert chart?] ‘traditional’I don’t drinks really such look as attea the (48%) and consumers to gain more share of Dual income family coffee (34%)price are tag. less If popularI like it, Iwith them, wallet. Several key drivers will shape The percentage of those aged 50-64 although still at willa reasonably buy it. high level. consumer expectations and needs in Favorite American brands: the casual wear category. consumingGuess, hot True cereal Religion for breakfast is [insert chart?] 1.7 times that of the younger generation Like their global counterparts, (aged 15-24)! The greatness of hot The next group (25-34s), having proudly staying connected and proactive cereal is not to be denied and much grown up and leading an active life, engagement are two key drivers in appreciated by the older clan. As one sees small changes in their breakfast purchase decisions. As technology APPETITEbecomes older, FOR a lower AMERICAN cholesterol diet habits;income a ofbit belowless milk HKD (58%) 5000, or youngfruit and enables constant connectivity on-the- APPARELis preferred for LARGER health and well-being,THAN vegetablesconsumers (34%need to– lowestget creative score about among go via smartphone or mobile device, satisfying their appetite for American consumers expect equally smooth SPENDINGmaking hot cereal the ideal choice over all age groups). Instead they drink more branded clothing. access on mobile as on PC1, as well others. coffee (38%), could be as wake-up Along with other international brands, as user-friendly websites and apps. American brands command a price routine,In qualitative as stimulant research, to cope recent with theirHK premium.YOU ARE Hong WHAT Kong YOU youth EAT are busyuniversity lifestyle; graduates and interestingly, revealed morethat Looking across different customer willingThe younger to pay, ongenerations average, 14%(15-24s) more in yoghurttheir parents (26% – mostor part-timeconsumed workwithin segments, customers engage with forHong American Kong have brands specific compared needs andto thisfunded age group).their clothing expenses. brands in one of two ways. Active localwants. brands In the (e.g., past, Bossini, milk may Giordano). not have [insertYoung chart?]graduates also noted their participation in conversation by the preference for purchasing with consumer takes place in social blogs, However,been a popular since foodHK youthitem in perceive Asia, American brands to be priced at 2-3 discounts: seasonal sale, borrowing online forums or discussion groups. however, 64% of this younger segment Age brings more responsibilities – and times higher, coupled with a relatively a friends’ VIP card or using a store Consumers will contribute to topic lownow regularlymedian drinkmonthly milk in thepersonal morning morestaff discount.stress, too, to the 35-49 year olds. threads, leave comments and share (and 29% have yoghurt drinks) – the

2 3 experiences via product ratings/ IMPLICATIONS reviews. But brands can also play an active role in shaping consumer American brands have clearly hit the expectations and perceptions. For emotional sweet spot with younger example, Hong Kong consumers and professional consumer segments. show openness for brands to actively Given the rapidly expanding success get in touch with them via push of the high design high value brands notifications and seem willing to be like Zara and H&M, it might be worth synced in to receive information (news considering alternative collections or non commercial information). to bring younger consumers into Given the above trends, mobile the brand franchise by lowering the shows great potential for brands to cost of entry for the 15-24 fashion more proactively engage with target conscious consumer. customers. The market has also seen several successful forays by luxury brands into the 30’s consumer segment (DKNY, CK) which has the potential It might be worth to not only expand the fan base but also to tap into larger disposable considering incomes. alternative With this two-pronged approach, collections to American apparel brands can continue to grow in their appeal to the bring younger Hong Kong market. consumers into the REFERENCE Think Mobile [http://www.thinkwithgoogle.com] brand franchise China Luxury Forecast (2012) [www.ipsoshk.com]

4 Hiroe Li Research Manager Ipsos Loyalty

hiroe.li @ipsos.com

About Ipsos Loyalty:

Ipsos Loyalty is the global leader in customer experience, satisfaction and loyalty research with over 1,000 dedicated professionals located in over 40 countries around the world. Our creative solutions build strong relationships which lead to better results for our clients. This has made us the trusted advisor to the world’s leading businesses on all matters relating to measuring, modeling, and managing customer and employee relationships.

About Ipsos:

Ipsos is an independent market research company controlled and managed by research professionals. Founded in France in 1975, Ipsos has grown into a worldwide research group with a strong presence in all key markets. In October 2011 Ipsos completed the acquisition of Synovate. The combination forms the world’s third largest market research company. With offices in 84 countries, Ipsos delivers insightful expertise across six research specializations: advertising, customer loyalty, marketing, media, public affairs research, and survey management.

IPSOS LOYALTY website: www.ipsoshk.com

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