1. ”Review China”
Saimaa Tourism Summit 20.9.2013
Jari Makkonen
Vientikeskuspäällikkö, Finpro Kiina
Peking, Shanghai, Guangzhou, Hong Kong

2. Global Outlook / World economy
27/09/2013 2© Finpro

3. Playground Asia - 2010
Source: IMF, World Economic Outlook, Sept 2011
Note: Amounts in current international dollar

4. Most dynamic Asian countries: CN, KR, TW,
HKG, SG, AST
Source: IMF, World Economic Outlook, Sept 2011
Note: Amounts in current international dollar

5. China – volume in 2012
5© Finpro
Improving
Market Position
Establishing a
Presence
Planning
Market Entry
Planning
International Growth
Acquisition
Candidate Search
Market Monitor
Sales AcceleratorEntry Options Partner Search
International
Growth Plan
Test Drive
Right Markets
Sales Channel
Development
Direct Sales
Establishing
Company
Supplier Evaluation
Export Partner
Groups
Trend Pulse
Finpro Asia (excl. India):
• 389 client projects 2012
• 318 clients 2012
• China over 60% of our volume
• Main Services:
Right markets Partner search, Direct sales,
Subcontractor search, Test Drive,
Acquisition candidate search
Industrial Services

6. China’s biggest challenge –
The middle-income trap
27/09/2013 © Finpro 6

7. Hyper-urbanization

8. Megalopolisies
27/09/2013 © Finpro 8

9. ”Do things as simple as possible, but not
simpler than that” (A. Einstein)
14/5/2013 9© Finpro
Source: McKinsey 2013

10. McKinsey Quarterly Jan 2013
“How to compete in emerging markets”
• To gain economies of scale, many multinationals develop country-
level strategies for each emerging market where they compete.
Yet in China, to give just one example, even nearby tier-one
cities can differ radically. Guangzhou and Shenzhen, two
urban areas of comparable size, are just 62 miles apart.
However, in Guangzhou a majority of consumers are locally born
Cantonese speakers, while in Shenzhen more than 80 percent are
Mandarin-speaking migrants with diverse tastes reflecting their
diverse origins. In an emerging market, global companies should
group cities into clusters with common demographics, income
distributions, cultural traits, media outlets, and transport links.
Then they can gain scale efficiencies by running operations
through a unified hub and expanding gradually, cluster by cluster.
To learn why this “deep” approach beats the “wide” one, read
“Winning the $30 trillion decathlon: Going for gold in emerging
markets” (August 2012).
14/5/2013 10© Finpro

11. ”China more than 25% of luxury goods by 2020”
27/09/2013 11© Finpro

12. China´s Outbound Tourism
• Chinese travellers abroad increased from 15 million (2001) to
65 million (2011). By the 2020 the number is expected to be
100 million.
• In the late 2000 the number of eligible countries for Chinese
tourist was 17 but by the 2012 this had risen to 140.
(Source BMI China tourism report 2013)
• In the 1980´s China started lifting barriers for outbound travel
to Hong Kong, Macao and Taiwan for the purpose of visiting
relatives.
• Self-paid international tourism was not allowed until 1990.
• Today Europe is the second biggest travel destination for
international travel, behind Asia-Pacific.
27/09/2013 12© Finpro

13. China´s Outbound Tourism (2)
• In 2012, total figure for outbound travelers was 83.18million,
increased 18.41%, in absolute terms, China has become the
biggest outbound market over United States and German.
• Till 2012, China has opened 114 travel destinations. Because of
the destination steady growth, and the increase of outbound
tourists, part of Chinese tourists begin to pay more attention to the
depth of experience and exploration destination
• Outbound destination countries and regions care more for quality
instead of quantity. Some countries start to control everyday
tourist quantity to guarantee quality
• Needs of tourists change from the original excursions into
business trips, vacations and other types of travel; travel mode
develops from the original ADS group to family-style packet group,
individual travel and other various of ways.
• Although price-driven market situation will exist for long time still,
the 2nd time travel and depth travel will flourish
27/09/2013 13© Finpro

14. Outbound Tourism 2010 - 2017
27/09/2013 14© Finpro
(Source BMI China tourism report 2013)

15. International Tourism Expenditure of Residents
and International Departures
27/09/2013 15© Finpro

16. Perusliiketoimintaosaamisen haaste - segmentointi
low-low low-mid
mid
180 -> 400
(2020)
high 18
CAPEX OPEX TCO
Transaction Sourcing Partnering
Level of partnership
Tender parameters Tender parameters Tender parameters Tender parameters

17. “Force field analysis adapted” Saimaa
Forces for Forces against
What speaks for and what against
• Clean nature
• Hobbies like fishing increasing
in popularity in China
• Novelty for experienced
travellers
• Luxury consumer goods prices
• June-August travelling season
(escape heat from big cities)
• Culture: Savonlinna Opera
Festival
• Saimaa Cruises ( to East
Finland cities and even to St.
Petersburg (VISA-free))
• Chinese New Year
• Not known at all in China (country, region)
• Middle-aged and older people cannot swim
• No DIY
• No good supply of Chinese food, needed to
be available together with Finnish food
• Some food habits to be explained (porridge,
other)
• Quality of accomodation and service normally
high in Asia; is the Finnish offering matching this?
• What Saimaa can offer to Chinese in winter?
(Chinese New Year travelling season)
• Savonlinna Opera Festival: adapt festival to
Chinese? (translations etc..)
• Chinese don´t like to stay in one place for the long time
(they want to experience and see a lot)
• Chinese need private guidance on cruises

18. China Travel Industry – top figures
27/09/2013 © Finpro 21
3 billions
Number of Chinese travelers (domestically and internationally)
100 million
Chinese national expected to travel international by 2016
USD102 billion – Tourists yearly spending abroad in 2012
Currently the Secondlargest travel market in the world
Expected to become the First by 2016

19. Next Chinese New Year Eve 30.1.2014!
22