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MasterCard report Reveals Foreign and Green Brands Preferred by Affluent Chinese

Travel News Asia Latest Travel News Friday, 22 February 2008

Big foreign brand names continue to dominate as top brands for the affluent Chinese consumer, with the environment and quality being key factors determining brand choice. This is according to the latest Insights report Brand Preference of the China Affluent released by MasterCard Worldwide.

The report confirms that brands are important to the affluent consumers in China, with those in Shanghai and Guangzhou placing greater emphasis on brand names compared to their counterparts in Beijing. Among the various brands, the affluent continue to favor foreign brands over domestic brands. 36.3% of respondents surveyed prefer foreign brands compared to 19.8% of respondents who prefer up market domestic brands. Shanghai has the highest percentage of affluent consumers stating a preference for domestic Chinese brands.

While quality (as indicated by 92.7% of the affluent consumers surveyed) is the most important attribute behind brand preference, wide recognition of the brand (68.3%), a fashionable design (58.5%) and being environmentally friendly (48%) are also important factors determining brand choice.

"In stating their brand preference, the affluent consumers of China demonstrate a high degree of sophistication; and their preference for well known foreign brands are not simply driven by the demand for status symbols as commonly assumed, but real concerns over product quality, design, and environmental considerations, observed Dr. Yuwa Hedrick-Wong, economic advisor, Asia / Pacific, MasterCard Worldwide.

The study, based on a survey of 1800 qualified respondents (600 each in Beijing, Shanghai and Guangzhou), identifies the top brands of affluent consumers in key spend categories, such as automobiles, consumer electronics, fashion, sports wear, jewelry, airlines, alcoholic drinks and shopping destinations.

Highlights of the top brands in the categories surveyed include:

Most Preferred Auto Brands: The top 10 preferred auto brands are all foreign brands, with German auto brands enjoying the highest level of preference in all three cities. BMW, Volkswagen and Mercedes Benz are the top three brands in the category.

Most Preferred Electronics Brands: With the exception of household appliances, foreign brands are preferred by the Chinese affluent consumer. Sony ranks well among the electronics brands, coming in as most preferred for cameras and second for notebooks and household appliances. Nokia is the most preferred brand for mobile phones and Haier the most preferred for household appliances.

Fashion/Watches/Jewelry/Apparel: While international foreign brands are preferred when it comes to shopping for watches, fashion, sportswear and sports footwear, a Hong Kong brand emerged most preferred for jewelry. Hong Kong jeweler retailer Chow Tai Fook (as indicated by 29% of the affluent consumers surveyed) commands the lead as the top brand for the affluent Chinese consumer, well ahead of second placed Cartier (14.2%).

Chanel (15.3%) is the most preferred fashion brand for the affluent Chinese, with Giorgio Armani (15.1%) close behind. For sports brands, Nike (78% for sportswear and 51.5% for sports footwear) is a clear leader ahead of Adidas (68.8% for sportswear and 37.4% for sports footwear) and the rest of the other brands.

Travel: Air China is the dominant brand when it comes to both domestic and international travel, with Singapore Airlines as the most preferred international airline for the affluent.

Most Preferred Alcoholic Drinks: While French wine is most preferred by the affluent (80.7% of the respondents), Chinese wine is becoming increasingly popular, ranking third ahead of Spanish, Australian and German wines.

In terms of leading Chinese liquor brands, Wu Liang Ye is the top brand preferred by the affluent, closely followed by Mao Tai. There seems to be a difference in taste between consumers in northern and southern China, with Mao Tai being the most preferred in Guangzhou and Wu Liang Ye ranking tops in Beijing and Shanghai.

Most Preferred Shopping Locations and Areas: Hong Kong (as indicated by 49.7% of the respondents) is the undisputed shopping destination for the affluent Chinese. Interestingly, home cities rank after Hong Kong, followed by Europe and South-East Asia. In terms of top sources of information on shopping, fashion magazine advertising appears the most powerful, followed by TV advertising and the Internet.

Field research was conducted by the China Economic Monitoring and Analysis Center in the second half of 2007 in Beijing, Shanghai and Guangzhou. Random surveys were carried out in city centers and key shopping malls; and only those respondents with an annual income exceeding US$16,000 per year are included in the data analysis. A total of 600 qualified samples were collected in each of the three cities.

See other recent news regarding: Travel News Asia, MasterCard, Brands, Research, Survey, China, Beijing, Guangzhou, Shanghai

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