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12
August 2004
Hong Kong
Mini-cards, Ladies cards, VIP cards… a myriad of credit
cards or quasi-credit cards have been launched in China just
over the last year, driving credit card penetration from 18%
in 2003 to 22% in 2004 in the key cities of Beijing, Shanghai
and Guangzhou, according to the latest survey by ACNielsen,
the global market research company.
Surveying 2,700 consumers aged 18-54 in Beijing, Shanghai
and Guangzhou by telephone, the ACNielsen Personal Finance
Syndicated Study 2004 compares the behavior and attitudes
of different groups of consumers in China and unveils the
market opportunities that lie in the personal finance sector
covering a host of products such as personal banking, credit
cards and lendings, life insurance and personal investment,
etc.
“Both domestic and foreign banks have been eyeing with
great interest the credit card market in China for years –
and for good reason,” said Glen Murphy, Managing Director
of ACNielsen China. “The vogue of spending tomorrow’s
money today has caught on in the three key cities, especially
among the younger generation, which in turn accelerates the
banks’ willingness to invest and develop the finance
sector.”
The ACNielsen study found Guangzhou to have the highest credit
card penetration, with 25% of consumers holding at least one
credit or quasi-credit card. Beijing and Shanghai trailed
Guangzhou with penetration rates of 23% and 21% respectively.
The ownership of credit cards was found to be highest among
the age group of 25-34, with an average of 35% claiming to
have held at least one credit or quasi-credit card. Beijing
led the market with 39% of people in the same age group having
a card.
Amidst the keen competition among local and foreign banks
to introduce new card products, Peony Card issued by the ICBC
was reportedly the most popular, with 13% ownership among
all card owners. Dragon Card and Great Wall Card followed
with an ownership of 9% and 6% respectively.
Murphy pointed out that the China market had began to transform
from a cash to a credit society in the recent decade and the
potential for the credit card market continues to unfold as
the government relaxes banking regulations for foreign players.
To further develop this market however, banks need to establish
a clear product differentiation and value proposition for
themselves. This is further evidenced by findings of this
survey which indicate that brand awareness for credit cards
is still weak among consumers and they have difficulties in
identifying a credit card versus a debit card.
“While it seems elementary, it is important for banks
to continue to educate consumers about the privileges and
convenience of credit cards in order to increase usage and
therefore better capture consumers share of wallet.”
The average credit card spending has seen continued growth,
partly due to the increasingly affluent consumers and therefore
stronger spending power.
ACNielsen’s study showed the other personal finance
products are currently at different stages of development.
The development of Personal Loans and Personal Investment
appears to be stagnant. According to the ACNielsen survey,
on average, 7% of people in the three cities used Personal
Loans in the past 12 months, representing an increase of 1
percentage point over last year, whereas 22% of people chose
Personal Investment of various sorts, a drop of 3 percentage
points vs. 2003.
“All our figures show that there is still huge potential
to be tapped in most personal finance products,” said
Murphy. “With more money in their pockets, consumers
tend to spend more and invest more. “
The adjustment in interest rates in recent years might have
led to a drop in the usage of bank deposits across the cities.
73% of people surveyed by ACNielsen claimed to have a bank
deposit, a 7% decline from last year.
On the other hand, Life Insurance is gaining traction, with
36% of consumers in the three cities claiming to purchase
it, up 7 percentage point from last year. Propensity of Life
Insurance grew the fastest in Shanghai, with 44% of people
purchasing, representing an 11 percentage points increase
over 2003, followed by Guangzhou with 7 points increase (32%
v.s. 25% in 2003). The development of Life Insurance in Beijing
is lagging behind, increasing only 3 percentage points (29%
v.s. 26% in last year).
Ping An was reported to be the leading Life Insurance provider
in Beijing and Shanghai, with 11% and 20% of people as policy
holders. In Guangzhou, however, China Life beat Ping An by
4%, grabbing a market share of 12%.
ACNielsen
ACNielsen, a VNU business, is the world’s leading marketing
information company. Offering services in more than 100 countries,
the company provides measurement and analysis of marketplace
dynamics and consumer attitudes and behavior. Clients rely
on ACNielsen’s market research, proprietary products,
analytical tools and professional service to understand competitive
performance, to uncover new opportunities and to raise the
profitability of their marketing and sales campaigns.
For further information, please visit www.acnielsen.com.cn.
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