decoding the dragon: china

DECODING THE DRAGON… BY KATHY JIANG

Politicians, Business Leaders, Economists, and Mass Media, are all talking about China… now even A-list Celebrities.

Met Ball GALA 2015 @ New York City

a.k.a. the Superbowl of Fashion

JIANG WEI

PERCEPTIONS OF CHINA

THE CHINESE EAT EVERYTHING.

China is BIG

CHINA

EUROPE

CHINA

= North America + South America + Australia + New Zealand + all Western Europe

Land Area as big as Europe. 5,000 years’ non-stop history

20% world population

China is DIVERSE 1/5 TIME ZONE Official/ Geographically 1/248

LAUNGUAGE / DIALETS

93%HAN 56 ethnic groups

CHINA IS A WORLD FACTORY

Not only do we produce

but we consume

2nd Largest Economy

Germany + France + UK

>

World’s Biggest Consumer

+7% @2014 No. 1 market for

mobile car luxury shoes

……

13

Mainland China 83.2% SOB

Taiwan 7.7% SOB Hong Kong

9.1% SOB

Source: Global Sales, Strategy and Excellence, Business Development

PROFIT CONTRIBUTION* SHARE:

40%

NET SALES SHARE:

14%

Greater China is No.2 Market for adidas group

FRANCHISE

Every 2-3 days, 1 mono-brand adidas store opens in China

8,853 234

OWN RETAIL

CHINA LOOKS LIKE THIS…

OR LIKE THIS…

Yes, but neither of them represents China as a whole

FAST URBANIZATION Since 1995,

300M people shifted into cities

Russia population x 2

SHANGHAI 1990

SHANGHAI 2012

A Comparison Shared by Bill Gates on his blog…

Source: http://www.gatesnotes.com/About-Bill-Gates/Concrete-in-China

CHINA 2011 - 2013

UNITED STATES 1901 - 2001

6.6 giga-tons 4.5 giga-tons

VS.

Cement Consumption: CHINA vs. US

3

4

5

6

7

2

1

# OF CITIES CITY TIER AVG. # OF

RESIDENTS

3 17.6M

18 6.6M

52 2.6M

159 1.1M

504 0.7M

676 0.5M

867 0.25M

HIGH TIER

LOW TIER

2,285 cities / 7 tiers

HIGH TIER CITIES Large cities + Higher Income

Luxury & Vertical brands

Shopping malls + Department stores

Adidas: 51% BCS + 93% OCS

LOW TIER CITIES Small Medium cities + Lower Income

Local brand dominate & Value/Price driven

Street level stores + State Owned shops

Adidas: Another 1000+ cities to penetrate

CHINESE PEOPLE ARE HARD TO READ

“ ”

Confrontation

Lifestyle Dining

Expression

Chinese Consumers

Increasingly diverse across generations, geographies, income level, and lifestyles

But we do share some commonalities.

Top Brand Lovers

44% vs. 16% in US 8% in Japan

Source: McKinsey & Co. Reports

Premium Retail Presentation

Premium Retail Presentation

33

Brand Hoppers

46% vs. 71% in US

Source: McKinsey & Co. Reports

Overwhelmed by choices of brands – all within a short period of time

WOMEN’S ONLY

Provide freshness through campaigns & retail concepts

COLLECTIVE STORE

NIKELAB KICK LOUNGE WOMEN’S ONLY

Provide freshness through campaigns & retail concepts

60days-ST 89% 30days-ST 91%

Celebrity Emulators

30days-ST: 35%, 60days-ST: 50%

Approval Seekers

28% vs. 49% in UK

Source: McKinsey & Co. Reports

Shopping Addict

Shopping 24/7

Largest eCom market

650M = US Population x2 online shoppers

Dominant Online Retailer 300M customers

+ >

WORLD’S BIGGEST EVER ONLINE SHOPPING HOLIDAY!

“SINGLE DAY” IN CHINA: 11.11

Buying presents for yourself to celebrate “being single”.

Invented by alibaba in 2009

8billion

340,000 In 1st min

25%

aChina

25m aGermany

42m

@Single day @2014

Premium Fresh GLocal eCom Social

To win Chinese Consumers, focus on:

“A journey of thousand miles must begin with a single step. “ Lao Tzu

How to connect with Chinese people? Here are some tips…

HANDSHAKE NAMECARD SMALL TALK HEAD NODDING

When you are at meetings with Chinese

When you are drinking the tea…

Serve the tea The way to “thank you” Sign to refill the tea

When you are invited to a dinner…

Don’t occupy the seat of host. Do leave the order to host.

Never place your chopsticks straight up in your bowl. Never flip the fish.

The most important custom: Footing the BILL

Do lower the rim when clinking glasses

Don’t unwrap the gifts before you leave

General reminders

“MAYBE.” “We’ll See.”

LUCKY NUMBER! Respect Authority “SAVING FACE”

THANK YOU!