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Expanding to the East


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Expanding your market into Asia.

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Expanding to the East

  1. 1. EXPANDINGYOUR MARKETDURING ARECESSION Daniel Evans Chief Executive Officer June 2011© Copyright 2011 – Ormita Commerce Network Limited. All Rights Reserved MARKETING FOR FUTURE BUSINESS GROWTH
  3. 3. The Plain FactsChina:• Is the worlds fastest growing economy• Doubles in size approximately every seven years• Will be the largest economy by 2020• Is the largest country by population• Is the worlds largest lenderIndia:• Is the worlds forth largest economy• Will be the third largest economy by 2020• Has maintained growth over the past 20 years• Is the second largest country by population MARKETING FOR FUTURE BUSINESS GROWTH
  4. 4. The Future : The Worlds Largest Economies 2010 GDP PPP-adjusted Values in Trillions of USDEuropean U.S.A Russia Union China Japan India 14.9 tr 14.7 tr 9.9 tr 4.3 tr 4.0 tr 2.2 tr 2020 GDP PPP-adjusted Values in Trillions of USD China JapanEuropean U.S.A Russia Union India 30 tr 29.6 tr 28.1 tr 13.4 tr 6.8 tr 4.3 tr MARKETING FOR FUTURE BUSINESS GROWTH Source: World Bank
  5. 5. Biggest Economies in 2020MARKETING FOR FUTURE BUSINESS GROWTH Source: World Bank
  6. 6. China & India Worlds Fastest Growing20 Economies GDP GROWTH15 PER YEAR Real growth rate Values expressed as a percentage10 Australia Canada China India 5 Russian Federation United Kingdom United States European Union 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 -5-10MARKETING FOR FUTURE BUSINESS GROWTH Source: World Bank
  7. 7. The Largest Populations in the World16001400 20101200 POPULATION1000 IN MILLIONS800600400200 0 ia il ia na a an sh a s ia z si re te er d es ra hi de st us In A ta ig B C ki on la S N R ro Pa g d d Eu an In te ni B U MARKETING FOR FUTURE BUSINESS GROWTH Source: CIA World Fact Book
  9. 9. South Asia The Most Resilient Economies10 GDP GROWTH8 PER YEAR Real growth rate6 Values expressed as a percentage East Asia & Pacific4 European Union Latin Am erica & Caribbean2 Middle East & North Africa North Am erica South Asia0 Sub-Saharan Africa 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009-2-4-6 MARKETING FOR FUTURE BUSINESS GROWTH Source: World Bank
  10. 10. Global Lenders Vs Global Borrowers } United States Spain United Kingdom Italy Australia Greece BORROWERS Turkey France Rom ania South Africa 1 { Singapore Kuw ait Norw ay Netherlands Sw itzerland LENDERS Russia Saudi Arabia Germ any Japan China-1,000 -800 -600 -400 -200 0 200 400 600 MARKETING FOR FUTURE BUSINESS GROWTH Source: World Bank
  12. 12. Ja 0 50 100 150 200 250 G pan re Ic ece el an Si I d ng t a ly U B apo ni e r te lg e d iu St m a Ire tes la Fr nd Po anc rtu e g Eg al H yp u G nga t U er ry m ni te a d I ny K sr in ae gd l N A om et u he st rla ria China nd Sp s a B in ra Po zil la Tu nd N rke o y D rw en a m y MARKETING FOR FUTURE BUSINESS GROWTH M ark e So Ca xico N uth nad ew A a Ze fric al a Sa an u d Ch d i A in ra a R bia us Es sia to ni a Asian Travellers Have Less Debt DEBT AS A OF GDP PERCENTAGE GOVERNMENTSource: Cia World Fact Book
  14. 14. Motivation & Needs Chinese & Indian TravellersTravel Motivation• Rising Incomes• Need to travel for business• Travel (especially to Europe) as a status symbol• CuriosityTravel Needs• Safety of a destination• Ease of getting a visa• Other factors: – Natural Scenic Beauty – Well-known landmarks – Friendly local people MARKETING FOR FUTURE BUSINESS GROWTH
  15. 15. Business TravellersOfficial:• Travel by people employed in government or public service upon invitation of a related organisation in the destination countryBusiness:• Incentive travel, visiting exhibitions and inspections or technical visitsPurpose of Travel• Paid by company/bureau• Predominantly company of male colleagues• Convenience and time• Concentrated shopping• Appreciate flexibility and attention to time management MARKETING FOR FUTURE BUSINESS GROWTH
  16. 16. Private TravellersGroup:• First time visitors and travel in groups, given the language barriers and unfamiliarity with the destinations.• They belong to the rising middle classes.FITs:• Has a high income and big purchasing power• More likely to speak other languages• Are experienced travellers MARKETING FOR FUTURE BUSINESS GROWTH
  17. 17. Who Are The Travellers ?• Well educated (with tertiary education)• With higher income• Top management of companies and government bureaus• Working professionals and semi-professionals• Small groups on an incentive trip• Tech-savvy and fashionable (interested in cutting-edge gadgets and latest fashions)• 4:2:1 (3 generations – grandparents, parents and single child)• Young (20-39 years old) MARKETING FOR FUTURE BUSINESS GROWTH
  18. 18. Accommodation Preference5045 Chinese Indians4035302520151050 5 Star Hotels & 4-Star Hotel 3-Star Hotel 2-Star Hotel Others Resorts MARKETING FOR FUTURE BUSINESS GROWTH Source: World Travel Forum
  19. 19. China: Major Travel Generating RegionsNorthern China (Beijing and Northeast China) – Most of the official travel is from Beijing – Beijingers are engaged in politics and love socialising – Work comes second to friends and familyEastern China (Shanghai and the Coastal Provinces Zhejiang and Jiangsu) – Regions with a history of overseas travel, resulting in relatives abroad – Wealthiest in terms of average income – Shanghainese are trendy and internationally oriented – Very price-driven, shrewd business people who drive hard bargainsSouth China (Guangdong Province and Neighbouring Provinces) – Guangdong benefits from its proximity to Hong Kong as the commercial gateway into China – Its capital city, Guangzhou, is a major trading and commercial centre – Consumer spending is the highest among China’s provinces – People in the south prefer higher standard of services to cheap prices MARKETING FOR FUTURE BUSINESS GROWTH
  20. 20. When Do They Travel?• Outbound mainly for business and official travel, hence not reliant on peak seasons• Private travel is mainly concentrated during the public holidays and school vacations – School vacations take place around Chinese New Year (4 weeks in Jan/Feb) and in summer (July and August) – Preferred destinations are domestic destinations and South East Asia – October is chosen for long haul destinations – 5 to 15 days paid holidays are available since 2008 MARKETING FOR FUTURE BUSINESS GROWTH
  21. 21. Travel Preferences• Short Haul to Long Haul: Significant growing interest to ‘less discovered’ European destinations; trips to S.E. Asia, Japan, Korea and Oceania still popular• Group Tour to Independent Travel: More Chinese travellers are able to apply for individual visas (as long as they showcase sound financial and employment status)• Multi-Country Packages to Hybrid Tours: Travellers are interested in in- depth travel rather than multi-country packages. They are keen to return to destinations enjoyed the first time.• The Chinese ‘top priorities’ in life are keeping fit & healthy, professional development and spending time with family & friends.• In terms of holidays, taking domestic holidays is at least ‘quite important’ for 80% and ‘extremely important’ for 9%. Foreign holidays are regarded as at least ‘quite important’ for a smaller proportion (61%) and ‘extremely important’ for 10%. MARKETING FOR FUTURE BUSINESS GROWTH
  22. 22. Chinese Travellers Approved Destination Status (ADS)• Approved Destination Status (ADS) Policy is a bilateral government agreement defining the arrangement between the Chinese Government and a foreign destination whereby Chinese tourists are permitted to undertake leisure travel in groups to that destination. Business and official travel to overseas destinations are not included.• Was first introduced in the early nineties for destinations in Southeast Asia such as Singapore, Thailand and Malaysia.• Countries without an ADS agreement are not allowed to receive tourism groups from China or to promote their destination in China for tourism and are restricted to business and official travel groups only.• More than135 different countries and territories have been granted ADS. The EU Member States, Switzerland, Norway, Iceland, USA, Canada, Australia and New Zealand are some of the major countries with ADS agreement. MARKETING FOR FUTURE BUSINESS GROWTH
  23. 23. D es tin at io n W 0 10 20 30 40 50 60 70 eb 80 si te s A Tr dv av er el tis Ag in g en at ci B es or de rs /A N irp ew sp o rt ap s er s /M ag az in es R Tr ec om av el m Bo en da o ks tio B n ill fro bo m ar ds O th & er Pr s om ot MARKETING FOR FUTURE BUSINESS GROWTH io na lS ig ns China TV /R ad io India Travel Information SourcesSource: World Travel Forum