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Building a Better Chinese Tourist Friendly Destination

Building a Better Chinese Tourist Friendly Destination. James Yang Chief Representative China UnionPay South Pacific. Chinese tourists purchase behaviors and payment challenges Approach to increase Chinese tourist value and experiences

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Building a Better Chinese Tourist Friendly Destination

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  1. Building a Better Chinese Tourist Friendly Destination James Yang Chief Representative China UnionPay South Pacific

  2. Chinese tourists purchase behaviors and payment challenges Approach to increase Chinese tourist value and experiences Building a Chinese tourist friendly destination across NZ Agenda

  3. China Outbound Tourists • the world fastest growing tourist source market 2012 • -- 83 Million outbound visits • The world new largest overseas spender • -- 102B USD in 2012 • 2015 Projection • -- 100million visits • Next 5 years projection • -- 400million visits • 80%+ of Chinese travelers rank shopping a must-do-activity when going overseas • FIT is most desired travelling way, if available • [Source: UNWTO,China Tourism]

  4. Overseas Chinese travelers • Why Chinese shops overseas • Culture & tradition • Lower tax and cost • Wider choice range • Genuine & High Quality • What are they looking for… • Fine Jewellery and Watches • Luxury accessories • Exclusive offers from top brands • Natural food products • Nutrition products • Why do they love FIT way? • Fully enjoy western life style • Fully control itinerary • Available to experience local culture & foods

  5. Biggest Challenges for Chinese travelling overseas • Language • get enough information and really enjoy the destination • hard to plan & implement trip • Payment • great impact to confidence in a strange places • key impact to shopping and experiences Be thrifty at home and spend liberally while travelling. -- Chinese old saying

  6. Payment Challenges for Chinese visitors • Payment barriers • RMB inconvertible • Foreign currency control • Long queue and high cost to get limit cash in foreign currency • Very few travellers cheques – not used to cheque and hard to get • International Credit card in foreign currency – you need foreign currency in advance and higher cost • Lower credit lines -- limit overseas spending How to help Chinese visitors overcome challenges and make them feel more confident ? A key task for NZ tourism industry and financial institutions in increasing Chinese tourist value and experiences

  7. 2 Approach to improve Chinese tourists value and experiences in NZ

  8. Understanding Chinese payment industry and Chinese payment preferences • China has a total different payment scheme compares to rest of world • All Chinese currency (CNY/RMB) denominated bank cards bear UnionPay logo • Each and every Chinese owns UnionPay card • Chinese gets salary, pays daily expanse and shops with UnionPay card • 40% + of China total retailers sales is by UnionPay card now • These give the answer what is Chinese tourists preferred way to pay : • Pay as in their country and feel as at home.

  9. UnionPay Background • Incorporated March 2002 , Shanghai • The unique bank card association in China represents 230+ issuing banks • The onlypayment scheme able to settle directly in RMB • China has skipped personal checks and moved directly to plastic cards

  10. UnionPay Global Presence 141 countries / markets 320 issuers around the world 3.5 billioncards in issued 19 mil issued outside China 1.5 millionATMs 10 million POS terminals

  11. In Asia/Pacific UnionPay claims: 73% of new cards issued, 26% of total transactions, 52% of total sales volume

  12. UnionPay Cards Credit cards Debit cards Prepaid cards

  13. Why Chinese prefers UnionPay payment overseas? • Use their daily payment card in NZ – every Chinese tourist has UnionPay card • UnionPay offers direct conversion NZD  RMB vs. other schemes NZD  USD  RMB • UnionPay waives currency conversion fee vs. 1.5-3% for other schemes • UnionPay uses ‘PIN+Sign’ for greater security vs. signature based transactions • UnionPay debit card provides unlimited purchasing vs. limited credit line of other scheme • UnionPay payments excluded from US$50K Foreign Currency annual personal quota • Chinese tourists preferred UnionPay

  14. UnionPay in New Zealand As a payment method, Connecting New Zealand to the fast growing China economy. ATM 38% BNZ, Kiwibank, NZCU POS 9000 merchants BNZ, Dynamic Payment UPOP UnionPay online payment for Chinese Consumers

  15. UnionPay in New Zealand • 9,000 merchant outlets - 15% • 800+ ATMs – 38% of the market • Top Brand through DFS – Burberry, Dior, Bvlgari, etc. • Duty free shops - DFS Gallery, J/R Duty Free, etc. • Top Jewelry and watch shops -- Mansors, Partridge Jewelers, Watch of Switzerland, etc. • Souvenir/gift shops across NZ • Attractions – Rotorua Museum, Real Journey, Taupo Bungy, Skyline, etc. • Hotel - Skycity, Grant Hotel, Crown Plaza, Holiday Inn,etc • Online shops - health NZ, etc

  16. UnionPay payments statistics in Australasia • Average transaction size – AUD663/NZD (March) • Biggest single purchase - AUD480,000/ NZD18,600 • Biggest restaurants and hotel bill - AUD175,000/22,500 • Think about US$5,000 cash per trip & USD50,000 quota per annual • UnionPay card - a crucial payment alternative Average UnionPay Transaction $ Value by Merchant Category Source: UnionPay Shanghai Data Centre

  17. The revenue comes for confidence – A familiar UnionPay signage • Testing in Australia: merchants with/without logo display - more than 20X sales difference • The reasons • Cardholder education • Eastern society character & language barrier • Indications • UnionPay logo – the best symbol of Chinese tourist friendly shop/attraction

  18. 3 Building a Chinese friendly destination -- China Ready

  19. NZ Market leaders in building a Chinese tourists friendly destination • BNZ • Provides ATM and merchants UnionPay ervice since 2007 • Focuses on market education and cardholders awareness building • Auckland Airport • Asia Summit focuses on HOT markets • Builds a Chinese tourists friendly airport • 75%+ airport merchants take UnionPay card • All duty free shops and souvenir shops • Great example of UnionPay posters and stickers display

  20. BNZ offers UnionPay services to Chinese tourists Lightbox -Auckland International Airport (arrivals area)

  21. BNZ offers UnionPay services to welcome Chinese tourists Cardholder Awareness Air NZ Kia Ora in-flight magazine Oriental Weekly

  22. More Works to Build a Chinese Friendly Destination • To catch up Chinese tourists big opportunity, changes and trends • Increase direct flight, hotel capacity, Chinese restaurant, Chinese tour guide, etc. • Provide enough UnionPay acceptance coverage across NZ destination • ATM 38%  90%+ • Merchants 16%  all tourist and students related merchants • One bank  all banks in payment market • Display signage to facilitate tourists shopping and travelling at NZ • Pass Chinese tourist friendly information back to China through social media/webs/ads

  23. Case Study – Australia’s China strategic -- incomplete at once • Understanding Chinese culture • Direct China marketing efforts • More flights to/from China • Mandarin speaking guides • Chinese signage ''However, the last kilometre of that highway is missing, namely how to access the deep pockets of Chinese travellers.'' The Age, 6 July 2012

  24. Building a Chinese friendly destination • Once incomplete Australia 2020 China strategy is enhancing now • Tourism Australia ,DNSW, Tourism Victoria, Tourism South Australia – signed UnionPay MOU • China Ready Program & Accreditation – include UnionPay as key element • Destination NSW -- welcome to Sydney/NSW/Australia UnionPay Campaign stickers • Westfield Sydney – UnionPay stickers & campaign • Australia Tourism Export Council – Chairman’s UnionPay Lunch

  25. Australia displays UnionPay signage to welcome Chinese tourist

  26. Case study – Philip Island • With UnionPay terminals, sales to Chinese visitors in 2012 increased 80% YOY • CNY 2013 V.S. CNY 2012 – 50% increase • UnionPay joint promotion – 50% off all purchases in the Nature Park

  27. Video conclude – Reuters report

  28. Thank you Contact: southpacific@unionpay.com +61 2 9250 8888 www.unionpay.com/en

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