Market Intelligence for China
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Market Intelligence for China

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Market Intelligence in China requires constant monitoring and quality assessment. The information available from traditional channels is often too general or inaccurate to be of any real use, but by ...

Market Intelligence in China requires constant monitoring and quality assessment. The information available from traditional channels is often too general or inaccurate to be of any real use, but by diversifying information sources, worthwhile, qual­ity material can be found and utilized effectively.

This presentation shows selected slides from a GIA white paper. To download the entire white paper that you are interested in, please visit http://bit.ly/GIAinsightWP

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    Market Intelligence for China Market Intelligence for China Presentation Transcript

    • Market Intelligence for China Webinar presentation April 20, 2011 The White Paper will be available for free downloading at www.globalintelligence.com after the webinar session. www.globalintelligence.com
    • Presenters•  Ms. Stephanie Tan, GIA ◦  Marketing Manager, Asia-Pacific ◦  Webinar conferencier•  Ms. Kim Zhu, GIA ◦  Consultant, Shanghai ◦  Webinar presenter•  Mr. Alexandre Klimis, Global Intelligence Alliance ◦  Analyst, Shanghai ◦  Webinar presenter www.globalintelligence.com
    • Webinar content outlineThis contains excerpts from GIA’s Webinar on “Optimizing MIDeliverables”. To watch the entire webinar, please visitwww.globalintelligence.com or email info@globalintelligence.com.•  Overview by region•  Challenges of conducting MI in China•  Recommended solutions•  Business cases www.globalintelligence.com
    • Overview by region www.globalintelligence.com
    • Key facts•  World’s largest population (20%)•  3rd Largest territory•  2nd spot in overall billionaire ranking with 10% of earth’s total•  World’s widest bullet train network (4800km)•  The second largest airport•  World’s largest construction market•  World’s second largest economy (and growing)•  Second largest manufacturing country•  World’s largest auto market www.globalintelligence.com
    • China regional overview China is often divided into 4 regions Heilongjiang Jilin Xinjiang Liaoning Inner Mongolia Beijing Tianjin Whole country includes: Gansu •  4 municipalities directly Hebei Ningxia Shandong Shanxi Qinghai Shaanxi Henan Jiangsu under central gov’t Shanghai administration: Shanghai, Anhui Tibet Hubei Chongqing Sichuan Jiangxi Zhejiang Beijing, Tianjin and Chongqing Hunan •  32 provinces Fujian Guizhou Yunnan Guangdong •  5 autonomous regions Guangxi Hainan •  2 special administrative Northeast China Region Eastern China Region regions: Macao and Hong Central China Region Kong Western China Region www.globalintelligence.com
    • Eastern China Cradle of China’s history and development, the region has all of the 3 main economic zones Eastern region makes up 10% of the countrys size but home to 30% of total population, and generates 55% of the country’s GDP. Bohai Rim (around Beijing) •  Strong in aviation, logistics and shipping (world’s busiest airport in Beijing) Heilongjiang •  GDP of US$1,036 billion •  Hub to Korea, Japan and Russia Jilin Xinjiang Beijing Liaoning Yangtze River Delta •  Largest and most sophisticated consumer Inner Mongolia Tianjin Gansu Hebei Qinghai Ningxia Shanxi Shandong market with strong services Shaanxi Henan Anhui Jiangsu Shanghai •  GDP of US$1061 billion Tibet Sichuan Chongqing Hubei Zhejiang •  Home of the development of bullet-train network Jiangxi Hunan Fujian •  Official financial hub of China Guizhou Yunnan Guangdong Pearl River Delta Guangxi Hainan •  First special economic zones: China reform laboratory •  GDP of US$781 billion •  Strategic hub between mainland China, HongAverage GDP per capita of 3 areas is US$5,213 Kong and Taiwan www.globalintelligence.com
    • China’s Northeast Region Economic region under development •  China’s heavy industrial center •  Still being developed (GDP is only US$456 Heilongjiang billion) Jilin Main industries Beijing Liaoning •  Steel, energy, automotive, shipbuilding, airplane manufacturing and military equipment Inner Mongolia Tianjin Gansu Hebei Qinghai Ningxia Shanxi Shandong manufacturing Shaanxi Henan Anhui Jiangsu Shanghai •  Important production base of agriculture, forestry Tibet Chongqing Hubei Zhejiang and livestock-breeding. Sichuan Jiangxi Hunan Future opportunities Fujian Guizhou •  China’s window to the Northeast Asia (Russia, the Yunnan Guangxi Guangdong Hainan two Koreas and Mongolia) •  Extension of the Bohai Rim thanks to the new rail •  Rich natural resources and relatively cheap labor and land cost. •  With the new nuclear power plant that will be constructed starting 2012, infrastructures willAverage GDP per capita of the region is US &2,788 improve www.globalintelligence.com
    • Central China Heart of China, between booming Eastern China and less developed Western regions •  Compared to other regions, Central China draws less attention before 2006 Heilongjiang •  Government issued “Rise of Center China plan” in 2006 •  Wuhan is most important city in Central China and acts Jilin as the economic and transportation center . Xinjiang Liaoning Beijing Main industries Inner Mongolia Tianjin Gansu Hebei Ningxia Qinghai Shanxi Shandong •  Agriculture, mining and raw materials. Henan Jiangsu Shaanxi Shanghai Anhui Future opportunities Hubei Tibet Chongqing Zhejiang Sichuan Jiangxi Guizhou Hunan Fujian •  Extension of Eastern China Yunnan Guangxi Guangdong •  The newly built high-speed railway has successfully narrowed the distance between Wuhan and Guangzhou Hainan from 12 hours to 3 hours. •  The region has been designated as the future power generator of China and has scheduled 4 nuclear plants, 6 windfarms and a solar energy farmAverage GDP per capita of the region is US &1,936 www.globalintelligence.com
    • Western China •  Makes up 70% of the countrys size but home to Least developed region only 27% of population and generates around 14% of total GDP •  Sichuan province is the largest in terms of population Heilongjiang Main industries Jilin •  Automobile and motorcycle manufacturing, mining, energy and tourism Xinjiang Liaoning Beijing Inner Mongolia Tianjin •  Important base of agriculture and livestock Gansu Hebei breeding. Ningxia Shandong Shanxi Qinghai Henan Jiangsu Shaanxi Shanghai Future opportunities Anhui Hubei Tibet Chongqing Zhejiang Sichuan Hunan Jiangxi Fujian •  Rich land resources Guizhou Yunnan Guangdong •  Strategic location with borders to 10 countries Guangxi •  Attracting a lot of PE investment Hainan •  Local government offer preferential policy to attract foreign investment especially in terms of : •  Tax •  Land •  Mineral resourcesAverage GDP per capita of the region is US &1,734 www.globalintelligence.com
    • Future challenges and events in China (1/2)•  Government change in 2012:Each generation of Chinese leader has pursued a specific set of goals: ◦  Mao Zedong: Industrialization ◦  Deng Xiaoping: Open up reform and normalization of diplomacy ◦  Jiang Zemin: Establish market economy and enter WTO ◦  Hu Jintao: modernization ◦  ??? : Rebalancing the country’s development, consolidate the country’s international position and stabilize the economy www.globalintelligence.com - page 11
    • Future challenges and events in China (2/2)•  Yuan listings and transactions in Hong Kong: first step towards (partial) floatationSo far, investment companies needed : ◦  400 million USD of proven cash flow for a year minimum ◦  A previous investment of 10 million USD in China ◦  OR, 10 previous succesfull investment to setup businesses in China ◦  Each major transaction was subjected to government approvalYuan listing in Hong Kong will provide opportunities: ◦  RMB liquidity pool for smaller investors to access RMB denominated securities ◦  Potential RMB futures ◦  Easy access for foreign banks installed in Hong Kong but not in Mainland China ◦  More flexible access rules www.globalintelligence.com - page 12
    • Challenges of conducting MI in China www.globalintelligence.com
    • The Chinese contradiction Fast paced and ever changing: Unlike Western countries, China can decide and implement its programs extremely fast and are hard to track: •  World expo: budget CNY400Bn and achieved among other things in the time frame of 5 years, hundreds of new hotels and more than 8 full subway lines with over a hundred stations •  High-speed train : 0 km in 2003 and 4800km in 2011 (world’s largest network both in operation and under construction with another 15000km on the work) Traditional mindset : At the same time, while the numerous reforms have opened China to modernity and market economy, decision makers and businessmen alike have kept a very traditional mentality based on Confucian values. For this reason, information is not easily publicly disclosed but rather given through a very tight network of friends (guanxi) within which one needs to be accepted . www.globalintelligence.com - page 14
    • Intelligence challenges in APAC:the challenge of data collection•  Official information While official information has been tremendously improved in the last 15 years in China, many organisms publishing statistics in China still have a hidden agenda that prevents from fully trusting the figures presented.•  Press Because of a very strict publication channel involving the government heavily, the press is not always capable of the same precision and reactivity as one is used in Western countries. As a result, industries relying on fast changes and immediate information cannot rely on the media for their needs and MI practitioners have to be very careful when handling these articles•  Associations Associations are still under development and mostly provide very basic information to this day. They also lack independence and means to conduct trustworthy MI on their own sector•  Internet As China has a rather lax policy in terms of disclosure, few information is directly available through websites and many companies do not really bother with maintaing an updated website. www.globalintelligence.com - page 15
    • Intelligence challenges in China:Diversity•  Diverse situations at a purely geographic level, China is a mix between jungle, tundra, steppes, deltas,... Each having specific advantages and inconvenients.•  Diverse governments A global market research on China is always a great challenge as each region has its own government and a high level of independance . The picture is even more blurred by autonomous entities that can be created at each administrative level (region, municipality, district, county, town,...)•  Diverse legal systems On top of the governement mosaic, China is also a mix between its historical and traditional legal system inherited from the empire and the rise of international standards. Rather than showing a trend towards replacement, both systems developped on top of each other, making the task of market entrants harder•  Diverse level of development While China is rising, the whole country is not developping at the same rate. Municipalities like Shanghai, Beijing or Hong Kong offer a profile similar to many western metropolis but Islands on the coastline are still deserted and the West in only starting to industrialize and develop itself in an attemp to catch up with the Eastern coast www.globalintelligence.com - page 16
    • Intelligence challenges in China Time Factors •  The absence of secondary data requires Cost Factors increased time (and money) investment in primary research •  Need for primary research to gain full understanding •  Telephone interviews have limited success with some Asian cultures so interviews must often be •  Industry experts are part of a very wealthy elite conducted in person that requires luxurious and thus expensive treatment. •  Decision makers can be difficult to access •  Real estate prices are growing higher and higher •  Travel to and from interviews can take 1-2 hours and reaching levels similar to major Western cities each way in many regions or even cities •  Travel costs may be lower in price but become an •  Survey techniqes may require large samples due important cost factor due to the frequence of travel to demographic segmentation required to cover the whole territory •  More focus groups must be conducted to •  Consultants cannot possibly cover the whole research the entire market, again due to diversity territory and it is thus necessary to hire a whole team .to hope gathering relevant data www.globalintelligence.com - page 17
    • Recommended solutions www.globalintelligence.com
    • Thank You for Your AttentionFor the rest of thispresentation, please visitwww.globalintellgence.comFor additional information about GlobalIntelligence Alliance and our services,please send an email toinfo@globalintelligence.comor visit the GIA websitewww.globalintelligence.com www.globalintelligence.com
    • About GIA www.globalintelligence.com
    • GIA is a strategic market Intelligenceand advisory groupGlobal Intelligence Alliance (GIA) was formed in 1995when a team of market intelligence specialists,management consultants, industry analysts andtechnology experts came together to build a powerfulsuite of customized solutions ranging from outsourcedmarket monitoring services and software, to strategicanalysis and advisory.Today, we are the preferred partner for organizationsseeking to understand, compete and grow ininternational markets. Our industry expertise andcoverage of over 100 countries enables our customersto make better informed decisions worldwide. www.globalintelligence.com
    • Access local knowledge in over100 countriesGIA Group has 12 offices on 4 continents.Together with affiliated GIA Membercompanies, certified GIA Research Partnersand consultants, GIA provides access tolocal knowledge in over 100 countries.All GIA Network companies adhere to GIA’sResearch and Analysis Quality System aswell as the SCIP Code of Ethics. www.globalintelligence.com - page 22
    • We understand your businessWith a track record of supporting thousands of clients Industry Practicesaround the world, we bring you practical expertise in your Automotive Chemicalsmarkets, as well as knowledge from our practices covering Construction & Property Development11 industries and all the key business functions. Consumer & Retail Energy, Resources & Environment Financial Services Private Equity Logistics & Transportation Manufacturing & Industrial Pharmaceuticals & Healthcare Telecommunication, Technology & Media Functional Practices World Class Market Intelligence MI for Strategic Planning MI for Marketing & Sales MI for Product & Innovation Management MI for Supply Chain Management M&A and Partnering www.globalintelligence.com
    • International Global Intelligence Alliance Group info@globalintelligence.comBaltic Region Gateway Baltic baltics@globalintelligence.comBelgium Global Intelligence Alliance Belgium belgium@globalintelligence.comBrazil Global Intelligence Alliance Latin America brazil@globalintelligence.comCanada Global Intelligence Alliance Canada canada@globalintelligence.comCentral & Eastern Europe EasyLink Business Services cee@globalintelligence.comChina Global Intelligence Alliance China china@globalintelligence.comFinland Global Intelligence Alliance Finland finland@globalintelligence.comFrance RV Conseil france@globalintelligence.comGermany Global Intelligence Alliance Germany germany@globalintelligence.comHong Kong Global Intelligence Alliance Hong Kong hongkong@globalintelligence.comIndia Global Intelligence Alliance India india@globalintelligence.comJapan McRBC japan@globalintelligence.comNetherlands Global Intelligence Alliance Netherlands netherlands@globalintelligence.comRussia ALT R&C. russia@globalintelligence.comSingapore Global Intelligence Alliance Singapore singapore@globalintelligence.comSouth Africa Butterfly Effect Intelligence southafrica@globalintelligence.comTunisia Tunisie RV Conseil tunisia@globalintelligence.comUK Global Intelligence Alliance UK uk@globalintelligence.comUnited Arab Emirates GCC Consulting uae@globalintelligence.comUSA East Coast Global Intelligence Alliance USA East Coast usaeast@globalintelligence.comUSA West Coast I.S.I.S. – Integrated Strategic Information Services, Inc. usawest@globalintelligence.com www.globalintelligence.com