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31 October 2007
Shang Hai
China’s second-tier city of Xiamen reports fast growing penetration rate for credit cards – with four out of ten Xiamen consumers now owning at least one credit card – according to Nielsen China’s annual Personal Finance Monitor released today.
The annual Nielsen report revealed that penetration of credit cards in Xiamen is catching up with that of key Tier One cities, with more than half of cardholders in Xiamen owning at least two or more credit cards. Chinese consumers aged between 18 and 24 are the most avid users of credit cards, according to the Nielsen report.
“Today’s Chinese consumer is clearly not interested in saving for a rainy day, as may have been the case in their parent’s generation. Chinese consumers have been adopting Western habits and attitudes in almost every way – including their saving and spending habits. For Chinese consumers in their twenties, spending tomorrow’s cash to fund today’s needs is a big new trend,” said Bega Ng, Director, Financial Services Research, The Nielsen Company, China.
With access to over 11,500 Chinese consumers in 18 cities(1) , Nielsen China’s annual Personal Finance Monitor (PFM), provides in-depth analysis into Chinese consumers’ attitudes and behaviour in banking, the use of credit cards and insurance.
And while cash is still the main form of payment for the majority of Chinese consumers, credit card holders prefer to use their credit cards for payment as a convenient substitute for carrying piles of banknotes around. “As the Nielsen PFM reveals, credit card holders in Xiamen are putting an average of 50 percent of their monthly income on their credit card account to indulge themselves with cashless shopping,” said Ms Ng
“The credit card market in China has seen a significant shift in the last few years. Not only has the introduction and rapid penetration of credit cards changed retail banking in China, but they have also reshaped people’s shopping habits – especially in urban cities.”
Xiamen consumers have also embraced other features of credit card ownership such as cash advance and installment(2) etc.
According to the Nielsen PFM, 14 percent of credit card holders in Xiamen have made use of the repayment installment feature offered by their credit cards issuers for big ticket items and half of the credit card holders have even taken cash advances via their credit cards.
“The Chinese credit card market presents enormous potential - and profit - for both local and foreign financial institutions. With continued robust consumer spending, a growing outbound tourism market and the desire for new life-style experiences, the urban acceptance and penetration rates of credit card usage will continue to grow,” observed Ms Ng. ”Consumers will also benefit from increasingly intense competition among local and foreign banks, who are beefing up their promotional efforts to get their credit cards into the wallets of the millions of Chinese big spenders.”
About The Nielsen Company
he Nielsen Company is a global information and media company with leading market positions and recognized brands in marketing information (ACNielsen), media information (Nielsen Media Research), business publications (Billboard, The Hollywood Reporter, Adweek), trade shows and the newspaper sector (Scarborough Research). The privately held company is active in more than 100 countries, with headquarters in Harlem, the Netherlands and New York, USA. For more information, please visit,www.nielsen.com.
(1) The 18 cities include Shanghai, Beijing, Guangzhou, Chengdu, Shenzhen, Shenyang, Dalian, Tianjing,Qingdao, Xi’an, Nanjing, Wuhan, Chongqing, Hangzhou, Dongguan, Xiamen, Fuzhou, and Kunming. The survey started April 2007 and it is the first time Xiamen has being included in the survey.
(2) Credit card installment is a form of payment arranged between banks and consumers. Instead of paying their credit card payment in full, consumers pay a set amount over a certain period of time when they use their credit card to pay for large purchases.
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