汇丰银行-中国-奢侈品行业-中国奢侈品消费情况一览-2019.2-59页.pdf

Disclosures&Disclaimer:This report must be read with the disclosures and the analyst certifications inthe Disclosure appendix,and with the Disclaimer,which forms part of it.Asset/SubcategoryChina DeluxeFebruary 2019Equities/Consumer and TechPlay interview withErwan RambourgEquitiesConsumer and TechFebruary 2019By:Erwan Rambourg and the Global Consumer&Retail TeamThe second edition of our China Deluxe survey focuses on consumer aspirations for premium productsDespite the headlines,our survey respondents luxury consumption still looks strong in the Year of the PigSee brand preferences and up-and-coming trends in luxury,technology,internet,travel,beverages,cosmetics,and moreChina DeluxeChecking in on luxuryconsumption in China 1 Equities Consumer and Tech February 2019 Checking in on luxury consumption in China Last March,we launched our first-ever luxury consumption survey,interviewing wealthy Chinese consumers.We check in a year later to see if things have changed.We surveyed over 2,000 wealthy Chinese consumers around Chinese New Year and asked them 50 questions.We focused on millennials aged 18-34(57%of respondents),as they are the generation most likely to drive luxury consumption in the future,and on women(57%of respondents).Our respondents annual income exceeded RMB150,000,and we split the results between Tier-1 and other tier cities(close to a 50-50 split).Whats in the report After similar premium surveys in both the US(US Holiday Deluxe,3 Dec 2018)and China(China Deluxe,7 Mar 2018);and broader consumer surveys in Poland(23 Jan 2019),the UK(16 Jan 2019),Turkey(10 Jan 2019),Russia(27 Nov 2018),Mexico(26 Nov 2018),Brazil(13 Apr 2018),the UK(13 Dec 2017),the US(18 Jan 2018),and China(3 Nov 2017),we check in with our wealthier Chinese consumers.We ask about their appetite for luxury goods,tech,sportswear,luggage,cosmetics,travel,internet,and beverages.We survey their expectations for the economy in the Year of the Pig,attitudes towards ESG,and the implications their preferences have on broader themes for these sectors.We compare the results to our China Deluxe survey from March 2018 and our US Holiday Deluxe survey from December.While c2,200 respondents are not enough to form a representative view of the entire population,the results do support themes we have been developing.See page 6 for more details about our survey demographics.Not afraid:Consumption should be up across multiple categories,including luxury,beverages,and tech,supporting our theory that domestic economy should stay strong despite negative headlines and external pressures.“Premiumization”:Quality,high-end brands matter to our respondents across categories,and they are willing to spend to get them.Our data in luxury,cosmetics,luggage,and sporting goods supports this trend towards premiumization.The pandas are staying close to home:An appetite for western brands does not necessarily translate into traveling to the west,consistent with our theme of the repatriation of growth.Top travel destinations were places near China,and most of our respondents were only planning to go abroad once or twice this year.Executive summary Equities Consumer and Tech February 2019 2 Links to previous HSBC surveys For over two years,HSBC has teamed up with Toluna to survey consumers around the world.Feel free to reach out to our analysts to discuss these surveys and what they mean for stocks.“Deluxe”surveys focusing on luxury and premium goods:US Holiday Deluxe-Anatomy of the US luxury consumer,3 December 2018 In December 2018,US consumers were not prioritizing luxury as much as Chinese consumers were,despite a positive outlook for the next year.China Deluxe-Anatomy of the future luxury consumer,7 March 2018 In March 2018,we learned that the Year of the Dog would be strong for luxury consumption from the Chinese.“Anatomy of the Consumer”surveys focusing on general consumer and retail trends:Poland:Anatomy of the Consumer Optimism peppered with caution,23 January 2019 In January 2019,Polish consumers were feeling optimistic about the economy,though their optimism is tempered by concerns about rising living costs and inflation.UK:Anatomy of the Consumer Evolution of issues,16 January 2019 In January 2019,UK consumers expressed their concern about the rising cost of living and Brexit,and their behavior shows they are concerned,despite rising real incomes.Turkey:Anatomy of the Consumer A difficult year,10 January 2019 In January 2019,Turkish consumers were feeling pessimistic about 2019 and concerned about money in the face of slowing economic growth.Russia:Anatomy of the Consumer Feeling the pinch,27 November 2018 In November 2018,we learned how Russian consumers are feeling in the context of Vladimir Putins“May Decree”,with pessimists outweighing optimists.Mexico:Anatomy of the Consumer What do Mexican consumers want?,26 November 2018 In November 2018,Mexican consumers were bullish despite macro fears ahead of the change in administration.South Africa:Anatomy of the Consumer Consumers are worried;spending habits will reflect this,22 October 2018 The subtitle of this October 2018 publication seems quite self-explanatory.Click the link to read more.Brazil:Anatomy of the Consumer What do Brazilian consumers want?,13 April 2018 In April 2018,we learned about the disconnect in Brazil between a distrust in institutions and brands and optimism about the economy as well as salaries.US:Anatomy of the Consumer What do US consumers want?,18 January 2018 In January 2018,American consumers were confident but not spending as much.UK:Anatomy of the Consumer Have things changed?,13 December 2017 In December 2017,we saw UK consumers were losing momentum and were concerned around living costs,terrorism and Brexit China:Anatomy of the Consumer What young,wealthy Chinese aspire to now,3 November 2017 A November 2017 deep dive highlighted many reasons to rejoice and few concerns in China.3 Equities Consumer and Tech February 2019 66%Preferred brandsTechnologyof respondents are spending moretime on WeChat than they werelast yearSource:HSBC,TolunaKey data behind Chinas affluent consumersGlobal over localadidas and Nike are still widelyfavored compared to localChinese sportswear brandsSouring AppleHuawei is now favored overApple for smartphone brandsThe Panda wears Coach is the favorite foraffordable luxury in China,butKors is the favorite in the USA crown for everyachievementThe number one preferredwatch brand is Rolex,same asin the US84%of respondents think that soft drinksare unhealthy,higher than in theUS or Mexico73%of respondentswere willing to paya premium for aglass bottleinstead of aplastic bottle67%of respondents said they would belikely to wear a smartwatch in thenear future65%of respondents are open toshopping for luxury online on TmalltopdestinationsJapan and Hong Kong are themost aspired destinations thisyear;France falls to third69%Staycation is fashionableof respondents are planning totravel abroad no more than twotimes this yearluggageSamsonite is now the mostpreferred luggage brand amongour respondents Equities Consumer and Tech February 2019 4 Ten fun facts did you know that Chinese luxury consumers had this in mind?1.Global over local adidas and Nike are still widely favored compared to local Chinese sportswear brands 2.“A crown for every achievement”the number one preferred watch brand is Rolex,like in the US 3.Souring Apple Huawei is favored over Apple for smartphone brands 4.We chat on WeChat 66%of respondents are spending more time on WeChat than they were last year 5.Plastics not fantastic 73%of respondents are willing to pay a premium for a glass bottle instead of a plastic bottle 6.Its hard to drink soft 84%of respondents think that soft drinks are unhealthy,higher than in the US or Mexico 7.Theres no place like home 69%of respondents are planning to travel abroad no more than two times this year 8.First-class traveler Samsonite is the most preferred luggage brand among our respondents,and it looks like they are trading up 9.Not like my momma taught me 41%of respondents think they spend more time on e-commerce than their parents do 10.Konnichiwa,Louis Japan is third in favorite places to buy luxury and jumped to first in travel destinations for this year 5 Equities Consumer and Tech February 2019 Whats changed since last time?Nine surprises Compared to our previous version of China Deluxe(7 March 2018),we highlight ten key changes from last year.1.ESG is a new topic in this report,and its already going mainstream 2.Luxury The appetite to spend more on luxury is more limited than last year,but not by much,given the headlines 3.Luxury Consumers want to buy luxury in Hong Kong,France,and Japan this year.Last year,they wanted to buy luxury in Hong Kong,France,and China 4.Handbags and leather goods Burberry slipped and Michael Kors gained steam 5.Watches and jewelry Tiffany and Bulgari passed Chanel in jewelry to come in second and third place,respectively.Last year,Chanel came in second 6.Tech and internet For smartphones,Huawei displaced Apple as the favorite brand,a surprising change from last year 7.Travel Japan and Hong Kong were the most preferred destinations for 2019,beating France(last years favorite)8.Skincare and makeup For these two categories,Korean brands moved up from last year,while US brands fell 9.Luggage Premiumization in luggage means that Samsonite surpassed American Tourister as the most preferred luggage brand Equities Consumer and Tech February 2019 6 Know your respondents For a breakdown of our survey data by age,gender,income,and geography,please contact us.Gender Age Source:Toluna,HSBC Source:Toluna,HSBC Annual household income Source:Toluna,HSBC Geography Source:Toluna,HSBC Female 57%Male43%Ages 18-3457%Ages 35 and older43%28%33%39%RMB150,000-199,999RMB200,000-239,999RMB240,000+Tier 1 cities46%Other tier cities54%7 Equities Consumer and Tech February 2019 Executive summary 1 Checking in on luxury consumption in China 1 Whats in the report 1 Links to previous HSBC surveys 2 Ten fun facts did you know that Chinese luxury consumers had this in mind?4 Whats changed since last time?Nine surprises 5 Know your respondents 6 Macro:The pursuit of quality 8 Still upbeat 8 ESG is going mainstream 14 Luxury 16 Talking the talk and shopping the shop 16 Apparel 22 Handbags and leather goods 24 Watches and jewelry 26 Tech and internet 28 Still“in love”with phones,but brand preferences are shifting 28 Reshaping the consumption behavior of Chinese consumers 34 Travel 36 A sweet escape 36 Other consumer 38 Beverages 38 Skincare and makeup 42 Sporting goods 46 Luggage 48 Disclosure appendix 53 Disclaimer 56 Contents We acknowledge the contribution of Akshay Gupta,senior Bangalore associate,to this report.Akshay Gupta is employed by a non-US affiliate of HSBC Securities(USA)Inc.,and is not registered/qualified pursuant to FINRA regulations.Equities Consumer and Tech February 2019 8 Still upbeat From the US-China trade war to deleveraging,negative headlines about China have abounded over the past year.But despite external risks and Chinas policies to reduce financial risks,we have argued that the domestic economy matters more than ever and that it should turn out to be more resilient than feared(see China Inside Out:Its all about domestic demand,29 June 2018).Domestic consumption has already become a key growth driver in China,contributing 5.0 percentage points to the 6.6%GDP growth in 2018.Consumption growth is likely to remain steady in the coming years,thanks to both steady growth in income and a healthy household balance sheet.The service sector is still likely to grow more robustly on a trend basis,due to changing consumption patterns of urban middle class consumers,improving transportation networks,and digitalisation.And,to a very large extent,the survey results supported our views.The participants appeared optimistic on their outlook for future income and consumption.A striking 72%of all participants expect their income to improve,of which,18%expect it to improve substantially.A further 23%expect their income to be unchanged.Only less than 5%of the total respondents expect their income to decline or decline substantially.Macro:The pursuit of quality Amidst trade tensions and de-leveraging,Chinas consumers are still upbeat on their income and consumption growth Services consumption remains a key trend,confirming our view that Chinas service sector growth is organic and sustainable Contrary to popular commentaries,consumers are still looking to trade up to better quality,rather than downshift Julia Wang Economist,Greater China The Hongkong and Shanghai Banking Corporation Limited .hk+852 3604 3663 Domestic demand matters more than ever The labour market will likely hold up Source:CEIC,HSBC Source:CEIC,HSBC Survey results support our thesis that the Chinese domestic economy is strong-5051015Real GDP growth,ppt contributionNet Export of Goods and ServicesGross Capital Formation Final Consumption Expenditure51015202551015202500020406081012141618Nominal GDP,%y-o-yAverage Wage Growth,%y-o-y 9 Equities Consumer and Tech February 2019 The optimism about income growth reflects a few trends.One is that,over the past decade,growth in labour compensation has always corresponded with growth in nominal GDP.We expect this to largely remain the case in 2019,as promised policy-easing measures gradually materialize(see China in 2019:Five key macro themes,November 2018).A resilient labour market will likely continue to underpin household consumption.We also think that the impact of the ongoing tariff war on the labour market will be limited,given that the services sector(which is largely non-tradable)is the largest employer.Structurally speaking,slowing working-age population growth,industrial upgrading,and the significant improvement in Chinas human capital should also help to sustain labour income growth in the coming years.Our expectations for domestic growth seem to be supported by Chinese consumer confidence expectations.Despite a slight dip mid last year,confidence is recovering and still near all-time highs since January 2000.Service is a bigger part of consumption now Source:CEIC,HSBC 02468101214Dec-15Mar-16Jun-16Sep-16Dec-16Mar-17Jun-17Sep-17Dec-17Mar-18Jun-18Sep-18Dec-18Household consumption,ppt contributionServicesNon-Services 3.supporting income growth 4.Household balance sheet still healthy *In response to the question“How do you think your income will change this year?”Source:Toluna,HSBC Source:CEIC,HSBC Chinas domestic economy has the right mix to grow despite concerns 18%54%23%4%1%Will improve substantiallyWill improveWill remain unchangedWill declineWill decline substantiallyIncome expectations for the year ahead*0204060801001201402005200720092011201320152017RMBtrnHousehold Net AssetHousehold AssetHousehold Liability Equities Consumer and Tech February 2019 10 Chinese consumer confidence is still strong and close to a 20-year high Source:National Bureau of St