CRUISE RETAILING IN TFWA CHINA’S CENTURY CONFERENCE PRESENTATION

ADRIAN PITTAWAY, MSC CRUISES ABOUT MSC CHINA CRUISE MARKET OVERVIEW CRUISE RETAILING IN CHINA THE FUTURE OF CRUISE RETAILING IN CHINA

2 ABOUT MSC

3 OUR FAMILY STORY

nd Founded in 1970, MSC Cruises in 2003 2 largest cargo company in the world Family owned and family run for 49 years 465 cargo ships

16 cruise ships 4th largest cruise line in the world All we do is shipping Largest in-house retail operation at sea Masters of the Sea MSC CRUISES

We sail 1000 different cruises per year to 150+ of the world’s most sought-after cruise destinations

We carry over 170 different nationalities on our fleet

We are no.1 cruise line in Europe, Africa, South America, Middle East

2003 – 127,000 guests 2018 – 2.2 million guests 2027 – 5.5million+ guests

5 OUR RAPID GROWTH

6 000 000 2027: 5.5 million+

4 000 000 Number of passengers 2018: 2.2 million

2 000 000

127,000

0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 CHINA CRUISE MARKET OVERVIEW

7 TIANJIN *

JAPAN

SHANGHAI *

OKINAWA

XIAMEN * • 3-5 DAYS CRUISES MAINLY HONG KONG & SHENZHEN * • SINGLE COUNTRY (no Korea) • FOCUS ON EXCURSION & SHOPPING • SOURCE MARKET CLOSE TO PORT SANYA* • LARGEST PORT 60% PHILIPPINES • TIANJIN SECOND 20% • OTHERS 20%

8 MSC CRUISES EVOLUTION IN CHINA

2016 2018 2020

MSC LIRICA MSC SPLENDIDA MSC BELLISSIMA MSC JV with Caissa MSC China MSC China Sailing from Tianjin Sailing from Shanghai Sailing from Shanghai 1980 guests 3900 guests 4500 guests

9 CRUISING IN CHINA 2018 Market Share • 9% of Global Cruise Market • No.2 source market globally Princess SkySea 4% Star 4% 6% Costa MSC 30% Costa 8% Royal Caribbean Norwegian Dream Dream 11% MSC Star Norwegian Royal Caribbean SkySea 14% 23% Princess

10 MARKET TRENDS CRUISE CHINA 2016-21

20 55000 50000 2018 18 45000 -19.7% vs 2017 16 40000 14 35000 Into 2019: 12 Withdrawal from market of both 30000 Korea withdrawal SkySea and Norwegian 10 New build ship introduction 25000 Further Forward: 8 20000 Increasing Investment & Innovation 2016 2017 2018 2019 2020 2021 Continued varied guest profiling SHIPS BERTHS

11 NOT AN EASY CRUISE MARKET…. COSTA VENEZIA 2019 4232 guests, Costa Cruises

12 SPECTRUM OF THE SEAS 2019 4200 guests, Royal Caribbean Cruises

13 MSC BELLISSIMA 2020 4500 guests, MSC Cruises

14 CRUISE RETAILING IN CHINA

15 CRUISE RETAIL PRINCIPLE

CRUISE RETAIL IS NOT TRAVEL RETAIL CRUISE RETAIL IS EXPERIENCE RETAIL

16 CHINA CRUISE RETAILING PRINCIPLES

AIRPORTS SPACE TIME GIFT ME

CRUISE TIME SPACE ME GIFT BUILDING EXPERIENCE RETAIL ACROSS A CHINA CRUISE

EXCITING QUALITY & EVENTS RELEVANCE

UNIQUE EXPERIENCE PART OF THE COLLECTIONS RETAIL HOLIDAY

KNOWLEDGE & TRUST NO FRICTION

18 HOW CHINESE CRUISE RETAIL WORKS

DAY 1 DAY 2 DAY 3 DAY 4 DEPARTURE PORT ONE PORT TWO SEA DAY

• Present Quality of Brand • Best Price Guarantee • Reinforce Trust in Sales • “I had a great time!” Team & Best Price • Buiid Trust in Sales Team • Unique Collections • Emotional Connection • Connection to Cruise / • Products needed for • Exciting Events Port • Last Chance! voyage • Limited Availability • Gift / Memory / • No Friction Souvenirs

5% revenue 15% revenue 20% revenue 50% revenue

19 TRUST, FLEXIBILITY & UNIQUENESS 200 QUALITY BRANDS ON-BOARD

BOUTIQUES 20 EXAMPLES IN DIFFERENCES CRUISE RETAIL - CHINA

SHANGHAI Sales TIANJIN Sales

BEAUTY BEAUTY LUXURY LUXURY DUTY FREE DUTY FREE LOCAL LOCAL FASHION FASHION

21 EXAMPLES IN DIFFERENCES CRUISE RETAIL - CHINA

SENIOR Cruise FAMILY Cruise

BEAUTY BEAUTY LUXURY LUXURY DUTY FREE DUTY FREE LOCAL LOCAL FASHION FASHION TOYS THE FUTURE OF CRUISE RETAIL IN CHINA

23 DEVELOPMENTS IN CRUISE RETAIL

UNIQUENESS INNOVATION

DEVELOPING FLEXIBILITY QUALITY & CHINA CRUISE TRUST RETAIL

HOLISTIC PERSONAL EXPERIENCE

24 SMART SHIPS – THE FUTURE IS SOCIAL COMMERCE

PRE-EMBARK MOBILE ECOSYSTEM PRE-EMBARK SOCIAL COMMERCE SMART SHIPS – THE FUTURE IS SOCIAL COMMERCE

MOBILE REFERENCE MOBILE PAYMENT

MSC ZOE

26 MSC ZOE

CHINA CRUISE RETAIL DEVELOPMENT

• PERSONALIZED EXPERIENCE RETAIL • ADAPTING, RECOMMENDING AND LEARNING TO NEEDS AND WANTS OF GUESTS • ABLE TO EVOLVE AND DEVELOP WITH CHANGING GUESTS, ITINERARIES, PARTNERSHIPS

• INTRODUCED FIRST INTO THE CHINA CRUISE MARKET ON MSC BELLISSIMA IN 2020

27 THE NEXT GENERATION OF CRUISE RETAIL IS COMING…

MSC WORLD CLASS from 2022 7000 passengers LNG powered

28 In Conclusion….

• CRUISE CHANNEL IN CHINA IS COMPLEX BUT IS POSITIONED TO OFFER HIGH GROWTH • RETAILING IN THIS CHANNEL MUST BE ADAPTED OTHERWISE IT WILL NOT REACH POTENTIAL OF ENVIRONMENT • PARTNERSHIP, INNOVATION AND RELEVANCE WILL GROW THE CHANNEL IN CHINA

29 Thank you!

ADRIAN PITTAWAY

[email protected] ( +41(0)79 528 95 94