”Review China”

Saimaa Tourism Summit 20.9.2013

Jari Makkonen

Vientikeskuspäällikkö, Finpro Kiina

Peking, Shanghai, Guangzhou, Hong Kong

Global Outlook / World economy

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Playground Asia - 2010

Source: IMF, World Economic Outlook, Sept 2011

Note: Amounts in current international dollar

Most dynamic Asian countries: CN, KR, TW,

HKG, SG, AST

Source: IMF, World Economic Outlook, Sept 2011

Note: Amounts in current international dollar

China – volume in 2012

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Improving

Market Position

Establishing a

Presence

Planning

Market Entry

Planning

International Growth

Acquisition

Candidate Search

Market Monitor

Sales Accelerator Entry Options Partner Search International

Growth Plan

Test Drive

Right Markets

Sales Channel

Development Direct Sales

Establishing

Company

Supplier Evaluation

Export Partner

Groups

Trend Pulse Finpro Asia (excl. India):

• 389 client projects 2012

• 318 clients 2012

• China over 60% of our volume

• Main Services:

Right markets Partner search, Direct sales,

Subcontractor search, Test Drive,

Acquisition candidate search

Industrial Services

China’s biggest challenge –

The middle-income trap

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Hyper-urbanization

Megalopolisies

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”Do things as simple as possible, but not

simpler than that” (A. Einstein)

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Source: McKinsey 2013

McKinsey Quarterly Jan 2013

“How to compete in emerging markets”

• To gain economies of scale, many multinationals develop country-level strategies for each emerging market where they compete. Yet in China, to give just one example, even nearby tier-one cities can differ radically. Guangzhou and Shenzhen, two urban areas of comparable size, are just 62 miles apart. However, in Guangzhou a majority of consumers are locally born Cantonese speakers, while in Shenzhen more than 80 percent are Mandarin-speaking migrants with diverse tastes reflecting their diverse origins. In an emerging market, global companies should group cities into clusters with common demographics, income distributions, cultural traits, media outlets, and transport links. Then they can gain scale efficiencies by running operations through a unified hub and expanding gradually, cluster by cluster. To learn why this “deep” approach beats the “wide” one, read “Winning the $30 trillion decathlon: Going for gold in emerging markets” (August 2012).

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”China more than 25% of luxury goods by 2020”

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China´s Outbound Tourism

• Chinese travellers abroad increased from 15 million (2001) to

65 million (2011). By the 2020 the number is expected to be

100 million.

• In the late 2000 the number of eligible countries for Chinese

tourist was 17 but by the 2012 this had risen to 140.

(Source BMI China tourism report 2013)

• In the 1980´s China started lifting barriers for outbound travel

to Hong Kong, Macao and Taiwan for the purpose of visiting

relatives.

• Self-paid international tourism was not allowed until 1990.

• Today Europe is the second biggest travel destination for

international travel, behind Asia-Pacific.

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China´s Outbound Tourism (2)

• In 2012, total figure for outbound travelers was 83.18million, increased 18.41%, in absolute terms, China has become the biggest outbound market over United States and German.

• Till 2012, China has opened 114 travel destinations. Because of the destination steady growth, and the increase of outbound tourists, part of Chinese tourists begin to pay more attention to the depth of experience and exploration destination

• Outbound destination countries and regions care more for quality instead of quantity. Some countries start to control everyday tourist quantity to guarantee quality

• Needs of tourists change from the original excursions into business trips, vacations and other types of travel; travel mode develops from the original ADS group to family-style packet group, individual travel and other various of ways.

• Although price-driven market situation will exist for long time still, the 2nd time travel and depth travel will flourish

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Outbound Tourism 2010 - 2017

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(Source BMI China tourism report 2013)

International Tourism Expenditure of Residents

and International Departures

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Perusliiketoimintaosaamisen haaste - segmentointi

low-low low-mid

mid

180 -> 400

(2020)

high 18

CAPEX OPEX TCO

Transaction Sourcing Partnering

Level of partnership

Tender parameters Tender parameters Tender parameters Tender parameters

“Force field analysis adapted” Saimaa

Forces for Forces against

What speaks for and what against

• Clean nature

• Hobbies like fishing increasing

in popularity in China

• Novelty for experienced

travellers

• Luxury consumer goods prices

• June-August travelling season

(escape heat from big cities)

• Culture: Savonlinna Opera

Festival

• Saimaa Cruises ( to East

Finland cities and even to St.

Petersburg (VISA-free))

• Chinese New Year

• Not known at all in China (country, region)

• Middle-aged and older people cannot swim

• No DIY

• No good supply of Chinese food, needed to

be available together with Finnish food

• Some food habits to be explained (porridge,

other)

• Quality of accomodation and service normally

high in Asia; is the Finnish offering matching this?

• What Saimaa can offer to Chinese in winter?

(Chinese New Year travelling season)

• Savonlinna Opera Festival: adapt festival to

Chinese? (translations etc..)

• Chinese don´t like to stay in one place for the long time

(they want to experience and see a lot)

• Chinese need private guidance on cruises

China Travel Industry – top figures

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3 billions

Number of Chinese travelers (domestically and internationally)

100 million

Chinese national expected to travel international by 2016

USD102 billion – Tourists yearly spending abroad in 2012

Currently the Second largest travel market in the world

Expected to become the First by 2016

Next Chinese New Year Eve 30.1.2014!

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