Cross Sectoral Business Opportunities

ARCTIC DIMENSION Design – Lifestyle Cross-sectoral Business Opportunities Business Opportunities Quick Check China and Hong Kong

HONG KONG

Country facts in a nutshell / Hong Kong
Population: 7,6 million inhabitants
number of households
age structure
GNP 23.000 USD capita
Hong Kong Island: Center, Admiralty, Causeway Bay, Kowloon: Tsim Sha Tsui, Kowloon Tong, Shatin
Marital status division (Married, Divorced, Widowed, Single) and how it differs in urban and rural areas
Educational level

Everyday lifestyle
Life in HK is busy. Work plays an important role and days are often long. Saturday is a working day as well (1/2 day).
Homes are in average small and several generations may share a flat. It is common for young professionals to live with their parents until they get married.
Eating is important part of social life and it is very common to have dinner with friends / family in a restaurant in the evening and weekends. It is said that a person eating alone has a heavy heart. All possible kitchens around the world are available in Hong Kong, but Hong Kong Chinese prefer Chinese food.
Regarding beauty for women it is ideal to be slim, and perfect, white skin is favored. For men it is good to be a bit heavy on the waist to show that one has money to take good care of the family.
Fitness, i.e. jogging and workout at gyms is more and more popular, though still more favored by westerners than Hong Kong Chinese. Tai Chi is practiced in parks throughout the year especially by middle aged and elderly.

Leading department stores in Hong Kong
Lane Crawford
Department store chain with shop-in-shop concept
Clothes, accessories, table and bedware, gifts, cosmetics
Most international brands like Mulberry, Calvin Klein, etc
Causeway Bay, Admiralty, IFC (exclusive layout), Tsim Sha Tsui
Wing On
Clothes and accessories, household and bedware
like ”Sokos”
Also foreign brands
Chinese style
Shopping malls (galleries with separate brand shops);
Harbour Place
Lee Theatre
Pacific Place
IFC
Time Square
Festival Walk, Kowloon Tong
Several other in Central, Admiralty, Causeway Bay, Tsim Tsa Tsui, Shatin, Olympic City

Japanese department stores in Hong Kong
Mitsukoshi
Shop-in-shop
Products according to brand names
clothes & bags & jewellery combined according to consumer group
Household, table and home ware, cosmetics
SOGO
Japanese department store
Products arranged according to brand names
Household, table and homeware, cosmetics
Seibu
By brands

Lifestyle chains and department stores in Hong Kong
Franc Franc – “Design for Life”
Japanese interior shop chain
present in Shinjuku, Shibuya, Osaka, Fukuoka, Hokkaido and Hong Kong
Furniture, lighting, appliances e.g. CD players, microwave ovens and rice cookers, goods specially for bedroom, bathroom and kitchen including tableware
Colorful Scandinavian style, Japanese corner, currently ”Christmas Special”- promotion
GOD –”Goods of Desire”, “For good living”
Lifestyle chain, 4 stores in HK
Furniture, lighting, home accessories, dinnerware & drink ware, bathroom / housekeeping accessories, fashion & bags, stationery and functional accessories.
Exclusive own design, GOD lable, modern Chinese, oriental style
” Race course” bed ware won Elle’s Product of the Year award

Lifestyle chains and department stores in Hong Kong
Shanghai Tang - ”Taste of China”
Chinese lifestyle chain
First and only Chinese life style brand
Idea by David Tang in 1994
Wearable, relevant, commercial products
Collaboration with leading European and Asian designers
Modernized Shanghai Style: innovative use of traditional motifs, bright colors, using old artisan techniques
Stores: Hong Kong, London, Shanghai, Singapore and New York
Designed luxury-goods: dress and suits for women and men made of silk and other prestige materials, accessories, interior decoration, gifts. Imperial tailor.
Everything with own brand and design
2006 themes: forbidden city, contemporary arts
Clients mainly tourists and westerners, not so much HK or Mainland Chinese

Lifestyle chains and department stores
Muji – “Lower price for a reason”
Japanese lifestyle chain
A globally known brand
Muji is short for Mujirushi Ryohin, which means "no brand”
Natural and simple design to propose rational lifestyles for today's world, natural colors
More than 5,000 items as Muji products (private label)
Muji Products: Clothes for men, women and children,bags, accessories, cosmetics, food, home organizers
Muji Cafe / Muji Meals: bakery cafés and restaurants
Muji Campsite
Operating campsites (3 sites in Japan?)
Promoting outdoor activities
Florist selling flowers
Living spaces: home furnishing

Retailing market: lifestyle chains and department stores
JUSCO
Maybe not here, from my mind it is rather low priced concept
Little bit like “Tiimari” but with wider assortment of goods
Pacific Cafe – “The Perfect Cup”
Cafe chain with internet access
Present in Hong Kong and Singapore
Selling small items related to coffee/tea drinking
mugs
coffee beans & blends, tea
music
Environment with comfortable music selection, warm lighting, couches and sofa chairs, an international selection of newspapers and lifestyle magazines, private space and space for community socializing

Characteristics of the retailing market in Hong Kong
Offering in Hong Kong is impressive: all leading global brands are in Hong Kong
Especially clothes, shoes, handbags and jewellary
A lot of interior designers
Interior shops: Causeway Bay, My favorite shop, small stores in Sohossa
Tequila Kola, Shambala (oriental) etc. in Ap Lei Chau
Very brand oriented
Shop-in-shop concepts
Brand stores in shopping malls, small stores e.g. in Soho, spas, yacht or country or golf or fitness clubs etc.

Lifestyle concept in Hong Kong
Leading lifestyle trends
Western style is preferred over Chinese. Only modernized Chinese style is used. E.g. Shanghai Tang is mainly for westerners and tourists.
Trends, latest versions are important. Last season is not interesting anymore, and even new goods are on sale in two weeks.
Hi-tech and technical features are important
Use and sell: It is usual to up-grade to latest version and sell the older model to second hand traders or friends
How does lifestyle concept show on the consumer good market
Trecking and sports goods stores in Times Square, Mong kok
High-technology, Leisure, LOHAS, home decoration
Lifestyle issues are discussed
SCMP Theme and supplements
Promotion catalogues, HK Magazine, Perspective, and other magazines
Cooking, fashion style
Among your friends: food, clothing
Promotional events: electronics, telephones, cosmetics
Campaigns and free gifts are widely used in marketing.

Consumer groups with good consuming power
Teen age people
Get a lot of money from their parents
Working young persons living with their parents
Good income but low living expenses
Children
Parents and grandparents as purchasers

BEIJING

Beijing Facts 2004
Population 14.213 million
number of households, 4.75 million
age structure (population census in 2000)
0-14 1.36 million 13.6%
15-64 7.8 million 78%
Over 65 0.84 million 8.4%
Education level (population census in 2000)
College and above 17%
Senior secondary school 23%
Junior secondary school 35%
Primary school 18%
Marital status (2004)
population aged 15 and over 12.79 million
single 24%
first married 67%
re-married 1%
divorced 1%
widowed 4%

Beijing Facts 2004
Per capita disposable income, 15638 RMB
Per capita living expenditure, 12200 RMB
Retail sales 219.2 billion RMB
Per capita retail sales 14711 RMB

Everyday lifestyle in Beijing
Living, young people like to live separately with their parents, rent or buy apartment, young couple with child who is less than 3 years old normally live together with parents
Leisure, having dinner together with friends, go to bar, for weekend, go to the suburbs of Beijing
Fitness, 2-3 time per week to fitness center, Yoga is very popular among young ladies. Losing weight is always the hot topic.

Retailing market in Beijing
Leading department stores
Beijing Wangfujing Department Store (local)
Pacific Department Store (Taiwan)
Parkson Department Store (Malaysia)
New World (HK)
Sogo (Japan)
Leading design / decoration chains and shops
The Home World Group (local)
Orient Home (local)
B&Q (UK)
OBI (Germany)
IKEA (Sweden)

Retailing market in Beijing
L ife style concept stores: the business idea and display is build around a certain life style theme
Wangshi, sell honey, royal jelly, flower powder
Shanghai Xue, traditional Chinese dress
L’occitaine, French, body care products, fragrant products
Characteristics of the retailing market
Supermarket chain is the largest retail format. In Beijing we have Jingkelong and Wu-Mart
Hypermarkets by international retailers, Carrefour, Wal-Mart
Convenience store, 7-Eleven, Quik
Specialty stores
Home electrical appliances, Guomei, Suning, Dazhong
Home decoration and furnishings (see the above)
Clothing and apparel, casual brands from HK, Esprit, Giordano, Baleno
Branded specialty stores (typically located in shopping arcades of hotels, increasingly setting up own flagship stores).
Online purchasing is increasing, eBay, Taobao.com

Lifestyle concept in the Beijing market
Leading lifestyle trends
Healthy life
- food safety
- functional food
- nutrition products (Amway, Tishi, Babycare etc.)
- outdoor sports
- fitness center
- green decoration (non-pollution, simple style, light color)
Youth trends
- young Chinese motivated by sports fashion, music and high-tech gadgets
- Urban Chinese teenagers typically download hip-hop tunes to trendy Samsung mobile phones, wear Nike training shoes, eat MCDonald and drink Coca-Cola (From EIU)
Luxury brands keep on coming
- chain stores, like special food, outdoor sports equipments, body care products, clothing
- direct selling, like the nutrition products (Amway, Tianshi)
- shop in shopping mall, like luxury brands

SHANGHAI

Everyday lifestyle in Shanghai
Living Conditions: good
Living Surroundings: not so good
Housing: average price 7.000-15.000 RMB/M2
Leisure: dine with friends and relatives, home cinema DVD, outdoor activities and gym, shopping, Karaoke, traveling, playing cards and majiang
Working Conditions: high competition and pressure, frequent overtime, long-time and crowded traffic, higher salary, better welfare, global organization and international working method

Retailing market
Leading department stores
Pacific, Isten, Printemps, Parkson, Oriental, Friendship,
Leading design / decoration chains and shops
B&Q, IKEA, Homemart
Life style concept stores: the business idea and display is build around a certain life style theme (like Body Shop, Pentik Shops in Finland, Muji in Japan)
Watson’s, City Mart, Herborist, Natural Beauty, Chiltina, Physical, Nep.star Drug Store
Characteristics of the retailing market
Single shops or chains? Chains
Own brands (private label) or a range of branded products? Both
Shop-in-shop concepts? Yes
Are these type of shops located in shopping malls, in certain district, spas, yacht or country or golf or fitness clubs etc. Most are located in shopping malls, certain district, large resident community

Lifestyle concept in the Shanghai Market
Leading lifestyle trends: health & well-being, high tech/design, digital home, relaxing, simple and convenience
In chains and shops that are built around the lifestyle concept
Old shops may do not recognize the impact of lifestyle concept
Some new shops are leading new lifestyle concepts
What kind of lifestyle concept already are on the market like
High-technology, Leisure, relaxation and simple home decoration, on-line shopping
How widely are lifestyle issues discussed
In media like magazines and TV: Very wide in Shanghai. Shanghai have one TV channel on fashion and lifestyle, lots of magazines and papers of fashions.
Among your friends
It is widely and deeply discussion, but we will discuss it sometimes.
Which topics, themes?
Leisure (Travel, Art Show, Shopping, Drama etc.)
Have you seen promotional events around this theme? Tell examples

GUANGZHOU

Brief-Guangzhou
Guangzhou is the capital city of Guangdong Province, covers an area of 7,434.4 Sq. km. It’s the political, economic, commercial, cultural center which combines manufacturing, transportation, finance, information, education and human resources as a hub. It's the largest coastal city in the southern China, which is adjacent with Hong Kong and Macao. Guangzhou is one of the most economically dynamic and flourishing areas in China.

Cities with best consuming power in Guangdong province
Guangzhou,
Dongguang,
Shenzhen

Guangzhou-Population (2004) Unit: person 828,500 6,520,500 3,597,000 49% 3,779,700 51% 7,376,700 Agriculture Non-Agriculture Female Male % of Non-agricultural population: 88.39% Sex Ratio (Female=100): 105.08 By Agriculture By Sex Total Population

Guangzhou-Population (2004)
Birth Rate: 9.56%
Death Rate: 5.74%
Natural Growth Rate: 3.82%
Number of Marriage Registration (couple): 61,885
Number of Divorces: 11,265
Rate of Divorces: 18.21%
Number of Married Women of Childbearing Age: 1,445,809
Late Married Rate (aged >23): 77.64%
One-child Rate:82.36%
More than One-child Rate:0.80%
Life Expectancy: 76.83 years old

Basic Statistics on National Population Census 2000-Guangzhou
No. of Households : 2,820,647
Average Family Size (person): 3.21
Average employed person in family (person): 1.79
Population by Age Group:
Age 0-14: 1,633,142 , 16.43%
Age15-65: 7,702,721, 77.48%
Age 65 & over: 606,159, 6.10%
Population with Various Education Attainments:
College & above: 400,530, 4.03%
Junior college: 525,815, 5.29%
Secondary Technical School: 619,955, 6.24%

Guangzhou-GDP 2004
GDP per capita: over USD6,800, 14% annual average growth rate
Total Retail Sale of Consumer Goods: RMB170 billion
Per Capita Annual Disposal Expenditure for Consumption of Urban Households
377.50 1168.58 1884.15 1404.75 728.75 808.15 693.77 4504.93 11570.58 3.26% Miscellaneous Commodities & Services 10.10% Residence 16.28% Education, Cultural and Recreation Service 12.14% Transportation & Communication Service 6.30% Medicine & Medical Service 6.98% Household Facilities, Articles & Services 6.00% Clothing 38.93% Food Total Living Expenditures for Consumption (RMB)

Guangzhou-Strong Purchasing Power Disposable Income per Capita Expenditure per Capita

Guangzhou-Growing Life Quality
City employee salary total amount:
RMB44.314 billion, Increase rate -14.3 ％
Employee average salary:
RMB25104, Increase rate-13.4 ％

Guangzhou-Main Indicators of Culture (2003)
Release of Various Films (films): 91
Chinese-made Films: 47 (51%)
HK & Import Films: 44 (48%)
No. of Film Spectators (10000 person-time) : 241
No. of Cinemas (units): 27
No. of Theaters & Music Halls (unit): 15
No. of Public Libraries: 15
No. of Performance for Arts Performance Troups (time): 2892
No. of Exhibitions: 965
No. of Broadcasting Stations (unit): 2
No. of TV Stations (units): 3
No. of Newspaper published (kind): 84
No. of Books published (kind): 4946
No. of Magazines published (kind): 281

Guangzhou People Everyday Life
Eating in Guangzhou is very famous around the world. Guangzhou people enjoy delicate food, such as dim sum, gong fu tea, soups with traditional medicinal materials, healthy herbal teas. People pay more attention on the healthy, natural green food.
Guangzhou is now expanding its urban district area, people will trend to live a little far away from the downtown, with more spaces of living facilities, such as swimming pool, fitness facility, and green plants. Living quality is improving.
Weekend pleasures: shopping, massage, Yoga, facial, spa, golf, club, KTV, disco, bars, sports, tourist, etc.

Guangzhou-Retailing Market
Leading department Stores:
Friendship, Grandbuy, Xin Da Xin,
Leading shopping mall:
TeeMall, Grandview Mall (the biggest shopping mall in Asia), Hong Cheng Plaza
Life style kauppojen paikka Shopping malleissa
Characteristics of the retailing market:
Retail shops are mainly grouped in the 2 pedestrian streets, and within the shopping malls.

Friendship department stores
Chinese value Friendship stores into premium category
Higher quality department store
Mainly products made in China
Life style concepts not visible
Wide selection from home electronics to jewellery, clothes and food

Life Style Concept Stores
Clothing: Li Ren Fang, Buyizhai
Decorations: Ding Hao
Foot Massage: Mu Zu Tang
Beauty & Spa &Hair Design: Celebrity Hair Design Center
Golf Club: Guangzhou Luhu Golf & Country Club
Furniture & living decoration: Guangzhou Meiju Center
Fitness: Total Fitness Club

Cross Sectoral Business Opportunities

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