Café Pays Hong Kong - Présentation Stéphane BREMENT

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  • 1. Stéphane BREMENT International Director at Euroka (KicKers & Robeez)
  • 2. KICKERS WORLDWIDE FIGURES 2 C O M PA N Y P R E S E N TAT I O N Number of pairs sold 4 260 000 4 140 000 Turnover (export 50%) 123 500 K€ 121 500 K€ Customers 6200 6250 2011 2012
  • 3. A GLOBAL PRESENCE, BUT STILL MOVING ON • Presence in more than 70 countries • 5 subsidiaries to date: USA, Germany, Spain, Scandinavia, Holland • 7 licensees on strategic and historical territories: UK, South America, South East Asia, Marocco and Middle East • 15 distributors • 2 agents C O M PA N Y P R E S E N TAT I O N
  • 4. Kickers around the world, but still many developments to go…
  • 5. 5 HONG KONG MARKET OVERVIEW
  • 6. 6 THE OPPORTUNITY SPACE HONG KONG MARKET MAJOR ECONOMIC INDICATORS • Retail sales is estimated at over 50 billion usd in 2013 • Retail is 64,000 establishment, is 320,000 jobs (9% of the active population)
  • 7. 7 LATEST TRADE PERFORMANCE • The world’s 9th largest trading economy • The world’s 11 largest exporter of commercial services THE OPPORTUNITY SPACE HONG KONG MARKET
  • 8. 8 CURRENT ECONOMIC SITUATION • The world’s freest economy • The world most service-oriented economy, with services sector accounting for more than 90% of the GDP • The most competitive economy in Asia • The second largest recipient of foreign direct investment (FDI) in Asia, after Chinese mainland • The third largest source of FDI in Asia, after Japan and Chinese mainland, THE OPPORTUNITY SPACE HONG KONG MARKET
  • 9. 9 HONG KONG AS A REGIONAL CENTRE • A popular venue for hosting regional headquarters or representative offices • The world’s busiest airport for international cargoes • The world’s third busiest container port • The second largest private equity center in Asia • The second largest stock market in Asia, the sixth in the world • The third largest foreign exchange market in Asia, the sixth in the world THE OPPORTUNITY SPACE HONG KONG MARKET
  • 10. 10 ECONOMIC RELATIONS WITH THE CHINESE MAINLAND • The most important warehouse for the Chinese Mainland • The largest foreign investment source of the Chinese mainland • The key offshore capital raison centre for Chinese enterprises • The Chinese mainland as Hong Kong’s largest source of external investment THE OPPORTUNITY SPACE HONG KONG MARKET
  • 11. 11 INFLUX OF MAINLAND TOURISTS • Industry players are increasingly strategizing their businesses to target Mainland Chinese tourists. • Mainland Chinese tourists contributed up to 50% of their annual sales. • Agreements established between Hong Kong and Mainland China has helped ease entry barriers of Mainland Chinese entering Hong Kong and helped to boost retail sales in Hong Kong. • After China eased visa restrictions on 15th Dec, 2010, 4 million non- permanent Shenzhen residents can travel to Hong Kong, spending an additional HK$5.6 billion per year THE OPPORTUNITY SPACE HONG KONG MARKET
  • 12. 12 GEOGRAPHIC LANDSCAPE HONG KONG A STRATEGIC GATEWAY TO CHINA THE IMPORTANCE OF HONG KONG TO THE CHINA BUSINESS • Hong Kong is an ideal platform to enter the Mainland Chinese market and/or the rest of Asia • This is attributable to the country’s stable political climate, low corporate tax, strategic location and East-meets-West culture • Retailers restructured their businesses to capture the mainland Chinese tourists. Stores are lavishly decorated and aim to create a strong impression amongst Mainland Chinese consumers • With a surging middle class segment, Mainland Chinese consumers are expected to grow more affluent and continue travelling into Hong Kong due to the latter’s close proximity, goods-and-services- tax free policy and wide availability of international brands
  • 13. 13 2nd EASIEST COUNTRY IN THE WORLD TO DO BUSINESS* • Foreign direct investment in Hong Kong is straightforward and easy to establish (6 days to establish a business, 1 day to get a construction permit) • International players are also attracted by the country’s long opening hours, absence of sales tax, low corporate tax (23% of the gross profit) and well-established transport infrastructure • Still few challenges related to official bureaucracy or corruption in Hong Kong • Now a challenge in entering an already crowded retailing environment, encompassing many Asian and Western brands * Source: “Doing Business 2013” RETAIL MARKET HONG KONG
  • 14. 14 RETAIL MARKET HONG KONG SHOPPING HABITS MAIN SHOPPING MALLS AND AREA • Shopping malls dominate retail development in Hong Kong. Local consumers appreciate the comfortable shopping environment and high-street brands offered by these shopping malls • The main shopping districts in Hong Kong include Central, Causeway Bay, Tsim Sha Tsui and Mong Kok
  • 15. Useful Sites • http://hong-kong-economy-research.hktdc.com • http://www.gov.hk/en/business/market/econo mic/ • http://www.francemondexpress.fr/librairie/doss iers/article/n/reussir-a-hong-kong/ • http://www.francemondexpress.fr/vue-detail- defaut/n/la-presence-francaise-a-hong-kong- interview-du-consul-general/
  • 16. 16 CHINA MARKET OVERVIEW
  • 17. 17 THE OPPORTUNITY SPACE CHINA MARKET China Citizen Average Annual Disposable Income (USD) 2005 2006 2007 2008 2009 Urban Area 10,493 11,759 13,786 15,781 17,175 Rural Area 3,255 3,587 4,140 4,761 5,153 Source: National Bureau of Statistics of China 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000 2005 2006 2007 2008 2009 RMB Year China Citizen Average Annual Disposable Income Urban Area Rural Area
  • 18. 18 THE OPPORTUNITY SPACE CHINA MARKET MIDDLE CLASS SPENDING POWER • The economic definition for a middle-class family in China is one who has an annual average household income of over 150,000 RMB (about USD 17,000) and household assets of over 620,000 RMB (about USD 80,000). • The number of China’s middle-class is estimated to be 100 million today and to reach 400 million in less than 20 years time. • Most middle-class people fall into the following 4 categories: – self-employed entrepreneurs – managerial staff at foreign companies – middle and senior managers at state-owned enterprises – professionals
  • 19. 19 KEY TRENDS IDENTIFIED IN CHINA MARKET Continued trend of increased domestic shopping (vs. overseas) • Continued growth of store openings by all brands • Improved timely availability of latest collections • Brands narrowed price gap between China and other markets • Overseas spend - lower price & better product selection Tier 2/3 cities continue to be the “new” battleground • Proliferation of real estate development in Tier 2/3 cities • Consumers’ attitudes in Tier 2 & 3 cities towards luxury and wealth similar to Tier 1 • Talent shortage and rising labor costs are hurdles for growth in Tier 2/3 cities Brand building efforts more localized & increasing • Chinese-themed campaigns and support for social welfare enhance relevance of brands/image • China is front and center in Brands’ global marketing programs CONSUMER PROFILE CHINA
  • 20. 20 KEY TRENDS IDENTIFIED IN CHINA MARKET Consumers expect comprehensive and differentiated service experience • Consumers are becoming more sophisticated and demand better service experience • Brands continue to build large flagship stores and localize after sales services • Many retailers “buying back” franchise operations to regain control over brand Continued importance of online platforms • Company websites (in Chinese) and online community (social networking) platforms remain critical marketing channels in China, particularly among consumers age 25-44 (TMALL.COM, 360Buy, Joyo Amazone,…) • Emergence of online factory outlets, overseas websites and 3rd party agents are driving internet sales growth (but still small) Gifting increasing & more diversified • Gifting remains a significant driver of luxury goods purchase in China • Gifting has become more diversified in brands selection with rising popularity of anonymous cash cards CONSUMER PROFILE CHINA
  • 21. 21 GEOGRAPHIC LANDSCAPE KEY REGIONS & CITIES IN CHINA CONDITONS OF CATEGORIZATION OF CITIES • Level 1:municipalities, special administrative regions, cities with GDP greater than RMB160 billion and population greater than 2 million • Level 2:sub-provincial cities、special economic zones 、capitals of provinces • Level 3:14 coastal cities of open economy、high economy growth and high income level APPROXIMATELY 655 CITIES IN CHINA • 160 cities with populations of 1 million or more • 12 metro areas with populations greater than 5 million • Plan for 8 mega cities (10+ million) by 2025 -Beijing, Shanghai, Chengdu, Chongqing, Guangzhou, Shenzhen, Tianjin and Wuhan
  • 22. 22 GEOGRAPHIC LANDSCAPE KEY REGIONS & CITIES IN CHINA LEVEL 1 Beijing Tianjin Shenyang Dalian Harbin Jinan Qingdao Nanjing Shanghai Hangzhou Wuhan Guangzhou Shenzhen Hong Kong Macau Chongqing Chengdu Xian LEVEL 2 Shujiazhuang Changchun Huhehaote Taiyuan Zhengzhou Hefei Wuxi Suzhou Ningbo Fuzhou Xiamen Nanchang Changsha Shantou Zhuhai Haikou Sanya Nanning Guiyang Kunming Lasa Lanzhou Xining Yinchuan Urumqi LEVEL 3 Tangshan Qinhuangdao Zibo Yantai Weihai Xuzhou Lianyungang Nantong Zhenjiang Changzhou Jiaxing Jinhua Shaoxing Taizhou Wenzhou Quanzhou Dongguan Huizhou Foshan Zhongshan Jiangmen Zhanjiang Beihai Guilin
  • 23. Significant government support in central China, where many 2nd tier markets are located • This region was boosted by the Chinese stimulus package to improve the infrastructure and transport links New commerce centers have appeared across the mainland, including • Nanjing –one of China’s leading producers of IT products, petrochemicals and automobile components • Wuhan –most populous city in central China and key transport hub –the “Chicago of China” • Kunshan–produces more than half of the world’s notebook PC’s Influx of people into the cities has also aided in the development of the retail market • Business Monitory International predicts retails sales to grow by 74% between 2009 and 2014 OPPORTUNITIES IN THE 2nd AND 3rd TIER CITIES CHINA
  • 24. ENVIRONMENT • A combination of deregulation and the need for foreign expertise has created opportunities in the wind and water sectors: • China is expected to have approximately 75GW of installed wind power capacity by 2020 • Inner Mongolia has strong potential for onshore wind power generation ► China has increased its targets for solar capacity to 20GW by 2020 • Solar station installations planned in: Gansu, Inner Mongolia, Qinghai, Shaanxi and Xinjiang • Energy-saving products will be in high demand as China’s green goals in the latest five year plan are pursued. • Wastewater will also see significant investment as the government looks to build new facilities and upgrade existing ones: • China’s wastewater output will reach 79 billion tons by 2015 (vs. 57.2 billion tons in 2009) due to rapid urbanization TOP SECTORS OF OPPORTUNITIES IN 2ND AND 3RD TIER CITIES CHINA
  • 25. TOP SECTORS OF OPPORTUNITIES IN 2ND AND 3RD TIER CITIES CHINA CONSTRUCTION • Chinese authorities will spend approximately US$3.96bn on rural road building • Airport projects planned in 2nd and 3rdtier cities • With an investment of US$67.5 billion till 2015, a total of 56 new airports will be built, 16 airports will be relocated and 91 will be renovated and expanded • Wuhan Tian he Airport T3 + Expansion: USD 2.3 billion • China will be investing billions of dollars throughout the country to enhance its ports
  • 26. TOP SECTORS OF OPPORTUNITIES IN 2ND AND 3RD TIER CITIES CHINA TRANSPORTATION • China is the largest vehicle market in the world with a double-digit sales growth every year: • Auto industry’s focus shifting to 2nd and 3rd tier cities • There are approximately 7 cars for every 100 people in these cities • As wages in the 2ndand 3rdtier cities continue to rise, consumer demand expected to rise –first entry level autos and then onwards to foreign brands • The automotive sector growth rate in 3rd tier cities exceeding those of the 1st and 2nd tier markets: • By 2020, 3rd tier cities market share will be approximately 55%
  • 27. 28 CONCENTRATING ON CHINA’S CLUSTERS CHINA Focusing on certain city clusters can yield greater benefits • Opportunity to exploit scale Top two clusters in each size category (2015 projection) • Mega: Shanghai, Beijing • Large: Nanjing, Xiamen-Fuzhou • Small: Xi’an, Hohhot City cluster strategies 1. Focus on cluster size, not city size, 2. Look beyond historical growth rates to factors of age, culture, politics that affect customer preferences, 3. Look at industries already in the cluster 4. Allow clusters to be flexible as they will slowly change over time, Source: Harvard Business Review
  • 28. FEW ADVISES TO CONCLUDE: • If your sole purpose of looking to China is for low cost manufacturing you are probably a decade too late • Domestic consumerism will be driving China opportunities • China’s growing consumerism and urbanization means China is more than just Beijing and Shanghai • In selling to China your best targets are 2nd and 3rd tier city clusters • Do your due diligence because China is at a pivotal point in its development (draw on the services of the federal and provincial Trade Commissioners) • Don’t forego common sense just because the numbers look big…