Building a Better Chinese Tourist Friendly Destination

1
Building a Better Chinese Tourist Friendly
Destination
James Yang Chief Representative China UnionPay
South Pacific
2
Agenda

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

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
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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 only payment scheme able to settle directly
  in RMB
• China has skipped personal checks and moved
  directly to plastic cards

10
UnionPay Global Presence
19 mil issued outside China
320 issuers around the world
141 countries / markets
3.5 billion cards in issued
10 million POS terminals
1.5 million ATMs
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In Asia/Pacific UnionPay claims 73 of new
cards issued, 26 of total transactions, 52 of
total sales volume
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UnionPay Cards
Credit cards
Debit cards
Prepaid cards
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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 PINSign for greater security vs.
  signature based transactions
• UnionPay debit card provides unlimited purchasing
  vs. limited credit line of other scheme
• UnionPay payments excluded from US50K 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
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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

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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 US5,000 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
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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

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3

• Building a Chinese friendly destination -- China
  Ready

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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

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BNZ offers UnionPay services to Chinese tourists
Lightbox -Auckland International Airport
(arrivals area)
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BNZ offers UnionPay services to welcome Chinese
tourists
Cardholder Awareness
Air NZ Kia Ora in-flight magazine
Oriental Weekly
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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 Australias 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
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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/Australi
  a UnionPay Campaign stickers
• Westfield Sydney UnionPay stickers campaign
• Australia Tourism Export Council Chairmans
  UnionPay Lunch

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Australia displays UnionPay signage to welcome
Chinese tourist
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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

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Video conclude Reuters report
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Thank you
Contact southpacific_at_unionpay.com 61 2 9250
8888 www.unionpay.com/en