Chinese Get Credit

Credit card ownership in the key Chinese cities of Beijing, Shanghai and Guangzhou is rising fast, according to data from ACNielsen. Penetration rose from 18% in 2003 to 22% in 2004 thanks in part to a mass of new product launches.

The company's Personal Finance Syndicated Study 2004 compares the behaviour and attitudes of different groups of consumers in China to reveal market opportunities in the personal finance sector, including personal banking, credit cards and lendings, life insurance and personal investment.

Data suggest that Guangzhou has the highest credit card penetration, with 25% of consumers holding at least one credit or quasi-credit card. Beijing and Shanghai have 23% and 21% respectively. Card ownership is highest among 25-34 year olds (35% overall, and 39% in Beijing).

Many local and foreign banks have introduced new card products. Mini-cards, Ladies cards, VIP cards and many others have featured in the last year. Peony Card, issued by the ICBC, was reportedly the most popular, with 13% ownership among all card owners. Dragon Card and Great Wall Card followed with an ownership of 9% and 6% respectively.

According to Glen Murphy, MD of ACNielsen China, 'The vogue of spending tomorrow's money today has caught on in the three key cities, especially among the younger generation, which in turn accelerates the banks' willingness to invest and develop the finance sector'. Murphy says the China market has began to transform from a cash to a credit society and the potential for credit cards is growing as the government relaxes banking regulations for foreign players. However, banks need to differentiate products: the survey indicates brand awareness for credit cards is still weak among consumers, who also have difficulties in identifying a credit card versus a debit card.

Other financial products and services have mixed fortunes:

The development of Personal Loans and Personal Investment appears to be stagnant - on average, 7% of people in the three cities used Personal Loans in the past 12 months, representing an increase of only 1% over last year, whereas 22% of people chose Personal Investment of various sorts, a drop of 3%
• 73% of those surveyed claimed to have a bank deposit, a 7% decline from last year - this may reflect adjustments in interest rates in recent years.
• Life Insurance is gaining traction, with 36% of consumers in the three cities claiming to purchase it, up 7% overall from last year. However, this covers a range of findings in different cities - 44% of people purchased in Shanghai, up 11% on last year; 32% in Guangzhou, up 7%; and only 29% in Beijing, up3%.

  Ping An was reported to be the leading Life Insurance provider in Beijing and Shanghai, with 11% and 20% of people as policy holders. In Guangzhou, however, China Life beat Ping An by 4%, grabbing a market share of 12%.

ACNielsen China surveyed 2,700 consumers aged 18-54 in Beijing, Shanghai and Guangzhou by telephone. Its web site is at www.acnielsen.com.cn

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

• ACNielsen China/Hong Kong
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