Table of Contents
Executive Summary
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- The market
- Impact of COVID-19 on the credit and consumption loan sector
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- Figure 1: Summary of impact of COVID-19 on credit card marketing, October 2020
- Market size
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- Figure 2: Accumulated number of credit cards issued by year end, 2014-2019
- Steady consumer spending growth
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- Figure 3: Growth in total consumer expenditure and bank loans approved, 2015-2019
- Online credit faces both opportunities and challenges
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- Figure 4: Growth in mobile payments by China’s banks, number of transactions and value, 2015- 2019
- Companies and Brands
- Declining growth in credit cards
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- Figure 5: Number of credit cards issued by major banks, 2017-2019
- The consumer
- Credit and consumption loan usage
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- Figure 6: Total credit and loan products usage, June 2020
- Credit spending
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- Figure 7: Total monthly credit bill amount, June 2020
- Credit bill repayment
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- Figure 8: Monthly credit bill repayment, June 2020
- Most frequently used credit card providers
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- Figure 9: Most frequently used credit cards, June 2020
- Reasons for choosing credit card providers
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- Figure 10: Reasons for choosing credit card providers, June 2020
- Innovate beyond conventional rewards for co-branding
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- Figure 11: Interest in types of cooperation for affinity credit cards, June 2020
- What we think
Issues and Insights
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- Drivers of credit and consumption loan
- The facts
- The implications
- Reimagine the role of credit
- The facts
- The implications
- Innovate for advantage
- The facts
- The implications
The Market – What You Need to Know
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- Declining growth rate of credit cards issued
- Credit transactions grow but outstanding balance is falling
- Regulatory changes restrict non-bank fintech services
Market Size
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- Slower growth in credit cards issued by major banks
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- Figure 12: Accumulated number of credit cards issued and credit cards per capita, 2014-2019
- Local banks expand their credit card businesses
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- Figure 13: Credit card business as a share of consumption loans at local banks, 2019
- 5G rollout to support growth in mobile payments and credit services
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- Figure 14: Growth in mobile payments by China’s banks, number of transactions and value, 2015- 2019
Market Drivers
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- Steady consumer spending growth
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- Figure 15: Growth in total consumer expenditure and bank loans approved, 2015-2019
- Credit card spending
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- Figure 16: Growth in credit card transaction/spending, 2019
- Investment in financial technology
- Credit card outstanding balance
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- Figure 17: Credit card outstanding balance growth rate at the six major banks, 2011-2019
- Short term consumption loan growth
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- Figure 18: Short term consumption credit as a share of short term loans, 2015-2019
- Competition from digital financial services
Key Players – What You Need to Know
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- Declining growth rate in credit cards issued by major banks
- Consolidating for competitive edge
Market Share
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- Declining growth in credit cards issued by major banks
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- Figure 19: Number of credit cards issued by major banks, 2017-2019
Key Fintech Players’ Performance
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- Alipay Huabei and Jiebei
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- Figure 20: Alipay Huabei and Jiebei as a share of Alipay’s microloans business, June 2020
- JD Baitiao
- WeChat Weilidai
- Bytedance
Competitive Strategies
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- Consumer segmentation and targeting
- Differentiate current rewards to excite existing customers
- Exclusive privileges for high income earners
- Digitisation is key to capturing lower tier cities
- Investment in financial technology
Who’s Innovating?
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- China Minsheng Bank’s Innovative Credit Card Usage Model
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- Figure 21: China Minsheng Bank's “Everyone's Lifestyle” App, featuring “Everyone’s Easy Instalment", June 2020
- WePlus Card: Guangfa Bank, Tencent and Visa for Overseas Spending
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- Figure 22: WePlus Card, May 2020
- Ping An Bank Credit Card Division’s “88 Livestreaming Gala”
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- Figure 23: Poster promoting Ping An Bank's 88 Livestreaming Gala Event, August 2020
The Consumer – What You Need to Know
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- Online credit and consumption loan services dominate in China
- Credit usage is defined by consumers’ habits
- Reduce psychological barrier of entry to credit and loan products
- Marketing to high potential consumers
- Guarantee of personal data protection as a point of differentiation
Usage of Consumption Credit and Loans
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- Online payment and credit services dominate in China
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- Figure 24: Total credit and loan products usage, June 2020
- Demographic differences in consumption credit usage
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- Figure 25: Usage of consumption credit products, by gender, June 2020
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- Figure 26: Usage of consumption credit products, by generation, June 2020
- Credit cards are more popular with high income earners
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- Figure 27: Usage of consumption credit products, by monthly personal income, June 2020
- Open-minded towards credit in lower tier cities
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- Figure 28: Usage of consumption credit products, by city tier, June 2020
- Lower usage in consumption loan products
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- Figure 29: Usage of Jiebei and Weilidai compared to credit cards, by city tier, June 2020
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- Figure 30: Usage of Jiebei and Weilidai compared to credit cards, by region, June 2020
Credit Spending
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- Most consumers are careful about credit spending, especially 18-24s
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- Figure 31: Total monthly credit bill amount, June 2020
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- Figure 32: Monthly credit bill amount, by age, June 2020
- The big credit spenders: older and female
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- Figure 33: Monthly credit bill amount, by gender and age, June 2020
- Family structure affects credit and loan needs
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- Figure 34: Monthly credit bill amount, by family structure, June 2020
- Income and employment affect willingness for credit spending
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- Figure 35: Monthly credit bill amount, by monthly personal income, June 2020
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- Figure 36: Monthly credit bill amount, by employment, June 2020
Credit Bill Repayment
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- Almost two-thirds of respondents always pay in full
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- Figure 37: Monthly credit bill repayment, June 2020
- Payment flexibility allows families to manage their disparate cash flow needs
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- Figure 38: Monthly credit bill repayment, by family structure, June 2020
- Users in lower tier cities use credit instalments to navigate financial challenges
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- Figure 39: Monthly credit bill repayment, by city tier, June 2020
Most Frequently Used Credit Card Providers
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- China Construction Bank and China Merchant Bank most popular
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- Figure 40: Most frequently used credit cards, June 2020
- The most popular cards have clear consumer segmentations
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- Figure 41: Most frequently used credit cards, by age group, June 2020
Reasons for Choosing Credit Card Providers
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- Ease of use is consumers’ baseline expectation…
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- Figure 42: Reasons for choosing credit card providers, June 2020
- …Privacy protection can be a differentiator for certain consumers
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- Figure 43: Personal data protection, by age, monthly personal income, city tier, June 2020
- Shopping benefits are attractive to female users and older users
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- Figure 44: Selected reasons for choosing credit card providers, by age and gender, June 2020
- Higher credit amount is key to improving spending power
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- Figure 45: Higher credit amount, by monthly household income, June 2020
- Users with high personal income fully leverage credit card benefits
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- Figure 46: Reasons for choosing credit card providers, by monthly personal income, June 2020
Affinity Credit Card Co-branding Preferences
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- Online and offline shopping co-branding still an overall favourite
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- Figure 47: Interest in types of cooperation for affinity credit cards, June 2020
- Physical and digital benefits appeal to different age groups
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- Figure 48: Interest in types of cooperation for affinity credit cards, by age, June 2020
- High income earners drawn to health and travel privileges
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- Figure 49: Interest in types of cooperation for affinity credit cards, by monthly personal income, June 2020
- Attract families with lifestyle-related services
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- Figure 50: Interest in types of cooperation for affinity credit cards, by family structure, June 2020
- Unique co-branding opportunities to capture young consumers
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- Figure 51: Interest in types of cooperation for affinity credit cards, by age, June 2020
Meet the Mintropolitans
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- The MinTs are versatile credit users
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- Figure 52: Usage of credit and consumption loan products, by consumer classification, June 2020
- Lower interest or fees for instalment repayment
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- Figure 53: Monthly credit bill repayment, by consumer classification, June 2020
- Privacy matters as digital transformation accelerates
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- Figure 54: Reasons for choosing credit card providers, by consumer classification, June 2020
- Exclusive privileges for the MinTs
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- Figure 55: Interest in types of cooperation for affinity credit cards, by consumer classification, June 2020
Appendix – Methodology and Abbreviations
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- Methodology
- Abbreviations
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