weddings in china

8/8/2019 Weddings in China

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Weddings in China

How the occasion creates unique Opportunitiesacross a

wide range of business sectors

Fall 2008


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| Copyright 2008 Grail Research, LLC 2

In 2007, ~ 9.5 MM couples were married in China

Weddings are highly seasonal with about 25% to 30% taking place duringthe May and October holidays1

Chinas wedding industry2 reached USD 265 Bn in 2007

The industry is forecasted to grow at a rate of 10% to 20% in next 3 years

Increased spending on weddings in China is being driven by economic

and cultural change

To capture significant revenue from this large and growing market, firmsare:

Developing targeted products

Implementing specialized pricing and promotions Placing products in strategic locations

Staging events and giveaways to attract attention

Weddings in China

Executive Summary

Note: 1May Holiday is International Labors Day and October Holiday is National Day. 2Includes wedding day expenses (i.e. products and services for weddingceremony) and wedding-related expenses (i.e., house, furnishings, etc.)

Source: China Wedding Industry Service Association; Statistics Center under China International Wedding Expo Committee; Expert interviews; News release;Grail analysis


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9.5 MM couples were married in China in 2007

16% annual growth since 2005

Spike in 2006 due to Golden Pig Year1 in 2007

More than USD 265 Bn was spent on wedding and wedding-related items in 2007

Total wedding expenses have grown at a rate of 31.6% since 2005

Spend is focused in urban areas (70% of wedding day expenses) Spend on wedding-related items is higher (USD 155 Bn) and growing faster

(38%) than spend on the actual wedding event (USD 110 Bn, 22%)

Weddings in China

Market Facts

The number of weddings in China and the amount spent surrounding thewedding occasion rose significantly from 2005 to 2007

Note: 1Golden Pig Year occurs once every 60 years and Chinese believe babies born in this year will have a lucky and wealthy life

Source: China Wedding Industry Development Report (2006 - 2007), Statistics Center under China International Wedding Expo Committee, March 2006; ChinaWedding Service Market Development Analysis in 2006, Department of Commerce, 2007; Grail analysis

Total Wedding ExpensesTotal Number of Weddings

10%6%

MM USD Bn9.59.5

8.2

2005 2006 2007

81.0

74.0

155.0

2005

124.0

96.0

220.0

2006

155.0

110.0

265.0

2007E

Wedding Day Expenses

Wedding-Related Expenses


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Cultural Drivers One-Child Policy Parents can and want to give their child a

dream wedding

Parents pay for at least 20% of wedding expenses for almosthalf of all couples

14% of couples have at least 80% of wedding expensesfunded by parents

Traditional Living Arrangements Young people live withtheir parents until marriage; a new house (and associatedpurchases) are a significant part of wedding-related expenses

Generation Characteristics - Todays culture places muchmore emphasis and value on individuality; young people spendmore money on their wedding and household to reflect theirpersonal tastes and sensibilities

Economic Drivers

Growing Economy Increase in disposable income and improved economic outlook have ledto newlyweds willingness to invest more than 30% of their savings in their wedding occasion

Spending Habits Availability and cultural acceptance of debt has led to newlyweds usingcredit cards and bank loans as funding vehicles for their wedding expenses

Weddings in China

Key Drivers

Increase in wedding spending is being driven by cultural realities and economicchanges taking place in China

Source: China Wedding Industry Development Report (2006 - 2007), Statistics Center under China International Wedding Expo Committee; Chinas NationalStatistics Bureau; Chinas Central Bank; News release

The majority of

wedding couples were born

in 1980s. Most of them are

the only child in the

families and thus, their

parents would spend largeramounts of money on their

sons/daughters

weddings to ensure they

have a good wedding.

-Sales Manager forWedding Service Company

Wedding consumption

behaviors of the current

generation are featured with

impulse, reckless, and eruptive

consumption. Parents of thenewlyweds are ready to invest

their lifelong savings as well as

time and efforts into a great

wedding for their only child.

-General Secretary, the Committeeof Wedding Service Industries


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Staging Events to

Attract Media Coverage

Implementing

Specialized Pricing and

Promotions

Weddings in China

Businesses are Adapting to Take Advantage

Placing Products

Strategically

Developing

Targeted Products

Weddings Create Unique BusinessOpportunities for Product and

Service Providers

1

2

3

4

JewelryDcor

Automobile Electronics

Furniture

Wine

Gifts

Packages


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Developing Targeted Products

Developing products tailoredaround the wedding event

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Engaged couples are an important consumersegment due to their strong purchasing power,and manufacturers/providers compete for theirbusiness by creating products specificallytargeted at the wedding market

Wedding-related purchases include more than 70categories of products and services


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Examples of Targeted Products1

Manufacturers are creating products specifically targeted to the preferences and needs ofnewlywed couple setting up their first home

- Sales Manager for a Wedding ManagementService Company in Beijing

People buyJin Liu Fu(a popular Chinese whitewine brand), because they like the name. (Jinmeans gold, Liu wealth and Fu bless)

There are some newlyweds who applied forbankloans to fund their weddings The newlywedsmindset is very much different as compared ten yearsago as they now embrace credit consumption

- General Secretary for the Committee of Wedding Service

Industries under China Association of Social Workers

Novelty Items

Galanz, the largest home appliance manufacturer in China,launched its China Red series (all the products are paintedred) to attract the discerning eye of the fashionable youngcouple

Quanxing, a major Chinese white wine maker, created the520 brand to target wedding banquets ( the pronunciationof 520 is similar to that of I love you in Chinese)

Candy manufacturers offer packaged candies suggestive ofromance and bliss as the perfect wedding favor

Financial Services

Personal bank loans are offered to meet the unique financialneeds of newlyweds

The Bank of Jiangsu launched a new credit card offering upto CNY 50,000 (~USD 7,000) credit to cover weddingexpenses

Pricing With Lucky Numbers

Many vendors (particularly jewelry makers and wine sellers)cater to Chinese tradition, setting the prices of their weddingproducts at lucky numbers. The prices might include the

number 9 for longevity, 6 for luck, and/or 8 for wealth



Implementing Specialized Pricing

Applying pricing strategies toboost sales

2

Newlywed couples purchase a wide range ofproducts and services in a short period of time(normally in 2-3 months)

This creates an opportunity for product and serviceproviders to bundle their products or services anddevelop special discounts to gain an edge overcompetitors



I purchased all the stuff for my new wedding house by

joining agroup purchase organizationwhere I

bought everything at one stop at very favorable prices.

The wedding management service company also

helped me get everything done in a total package

Examples of Specialized Pricing2

Product and service providers use discounts and bundles to capture their share ofnewlywed spending

- Newlywed from Shanghai

- Sales Manager for a Well-Known ChineseWhite Wine Distributor

Sometimes other products likecigarettes and

wedding candiescould also bebundledwith

wedding wines.

Bundling Products

Fivestar, an electronics chain retailer, held a promotional

campaign in 2007 targeting newlyweds Bundles of electronics and home appliances were offered

at a high discount

Bundles accounted for 70% of revenue during promotion;~ 90% of bundles were purchased by couples setting upnew homes

In 2007, Jin Liu Fu, a wine provider, collaborated withLaofengxiang Jewelry to bundle wine and jewelry in weddingpackages

HaoTian Wedding, a wedding planning company in Chengdu,partnered with the provider of Love you for 10,000 years wineto sell the wine as a part of its wedding management services

Bulk Sales

Tuangou, the practice of arranging large scale grouppurchases, has migrated to the web and now such sites offerwedding-related products and services

Newlywed Discount

In 2006, Nanjing FIAT car company held a sale offeringnewlywed couples a discount of CNY 3,888 (USD 555) on the

purchase of a new car



Placing Products Strategically

Strategically placing products toreach target buyers

3

In the relatively unstructured wedding market, it isdifficult to reach target buyers and stand out fromcompetitors

Placing products in locations frequented bycouples planning weddings helps providers attractbusiness



Getting exposure in the right places can really give businesses an edge over thecompetition

Examples of Product Placements3

To seize the chances of contacting consumers, wenormallyexhibitsome bottles of ourweddingwinesin the offices of wedding service providers, orset up aexhibition shelfin the restaurant of fivestar hotels

Webookedthewedding photography service

at theWedding Expo There weremore visual

displaysas references to help us tomake a

decision.

- Newly-Married Professional

- Sales Manager for a Well-Known ChineseWhite Wine Distributor

Wedding Venues

Vendors place advertisements targeting engaged couples at

certain sites to create touch points with prospective customers: Local Civil Affair Bureaus where couples register for

marriage

Photo studios where wedding photos are taken

Hotels where wedding ceremonies are held or that arepotential honeymoon destinations

Wedding Expos

Each year wedding vendors exhibit at wedding expos and

attend industry promotion fairs in major Chinese cities (e.g.2007 Chinese International Wedding Expo featured 250+vendors from 30 countries)

Potential vendors often offer discounts at events to encourageimmediate purchases (e.g. Tourbillon Watch and Jinfo Watchoffered a 30% discount at a 2008 exhibition)



Staging Events and Giveaways to Attract Attention

Creating novel events and giveawaysto fuel brand awareness

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To promote their products and services, vendorslook beyond advertising and product placementto attract attention to their offerings

Sponsoring weddings and contests can buildreputation and prominently associate a brandwith the wedding occasion



Sponsoring weddings and sweepstakes attracts media coverage and helps build brandawareness and association

4Examples of Events and Giveaways

Weddingshave taken on other social functions.For example, public relations shows(i.e., avendor holds a wedding for their clients) andsocialnetworking opportunitiesfor thenewlyweds and their parents.

- Industry Analyst in Chinese Wedding Association

It is acommon practicefor real estatedevelopersto sponsor wedding-themedmarketing activities.

Contests and Giveaways

In 2006, Gu Loulan, a wine manufacturer, offered Chery QQ

cars for the wedding ceremonies of 6 couples who bought theirwine

Jinsihou, a major wedding candy maker, offered free weddingdress rental to its customers

Quanxing, a Chinese white wine maker, gave away aninstruction guide on wedding ceremonies and held publicwedding culture education road shows to build their reputationand boost sales

- Industry Analyst in China Wedding Association

Sponsored Weddings

Traditional Chinese white wine maker, Xifeng, sponsoreda 34 couple wedding event in Baoji city in 2007 to

promote its specially-designed catering services

Jiangmen photography studio group, Guangdong Sese,sponsored a package in 2008 that included a collectivewedding ceremony, photography services and ahoneymoon trip

Id if i U i B i O i i i Chi



Identifying Unique Business Opportunities in China

How can we help your organization?

Grail Research Firm of Choice for Market Intelligence in China

Local office in Beijing

Experienced, talented, multilingual staff

Extensive primary and secondary research expertise in the regionacross a wide range of industries

Deep local knowledge (information sources, databases, vendors,industry contacts, etc.) and relationships to access unpublished

data

Focused on getting clients the answers they need to makeimportant strategic decisions


15/15| C i h 2008 G il R h LLC

For More Information Contact:Grail Research([email protected])

Copyright 2008 by Grail Research, LLC

No part of this publication may be reproduced, stored in a retrievalsystem, or transmitted in any form or by any means electronic, mechanical, photocopying, recording, or otherwise without the permission of Grail Research, LLC

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