ARCTIC DIMENSION

Design – LifestyleCross-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 millionsingle 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 storesBeijing 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 BeijingLife 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-MartConvenience store, 7-Eleven, QuikSpecialty stores• Home electrical appliances, Guomei, Suning, Dazhong• Home decoration and furnishings (see the above)• Clothing and apparel, casual brands from HK, Esprit, Giordano,

BalenoBranded 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 trendsHealthy 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• How does lifestyle concept show on the consumer good market

- 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

• How does lifestyle concept show on the consumer good market • In chains and shops that are built around the lifestyle concept

Old shops may do not recognize the impact of lifestyle conceptSome 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)

Total Population

By Sex By Agriculture

Male Female Non-Agriculture Agriculture

7,376,700

3,779,70051%

3,597,00049%

6,520,500 828,500

Sex Ratio (Female=100):

105.08

% of Non-agricultural population:

88.39%

Unit: person

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

Total Living Expenditures for Consumption (RMB)

11570.58

Food 4504.93 38.93%

Clothing 693.77 6.00%

Household Facilities, Articles & Services 808.15 6.98%

Medicine & Medical Service 728.75 6.30%

Transportation & Communication Service 1404.75 12.14%

Education, Cultural and Recreation Service 1884.15 16.28%

Residence 1168.58 10.10%

Miscellaneous Commodities & Services 377.50 3.26%

Guangzhou-Strong Purchasing Power

1688416683

15638

Disposable Income per Capita

13121 1263112200

Guangzhou

Shanghai

Beijing

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