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Financial Cards and Payments in Hong Kong, China



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Euromonitor International
Feb 2011
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About this Report



This Euromonitor market report provides market trend and market growth analysis of the Financial Cards and Payments industry in Hong Kong, China. With this market report, you’ll be able to explore in detail the changing shape and potential of the industry. You will now be able to plan and build strategy on real industry data and projections.

The Financial Cards and Payments in Hong Kong, China market research report includes:

  • Analysis of key supply-side and demand trends  
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Financial Cards and Payments in Hong Kong, China?
  • What are the major operators and issuers in Hong Kong, China?
  • How will regulation impact the market?  
  • What is the current state of emerging payment technologies such as mobile commerce?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

Euromonitor’s industry reports, including Financial Cards and Payments in Hong Kong, China, originate from our database within our Consumer Finance market share and market size database, Passport, a platform which analyses Consumer Finance in 46 countries and globally.

Each report is delivered with the following components:
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Market statistics: Excel workbook

Sample Analysis

EXECUTIVE SUMMARY

Expanding consumer credit benefits from economic recovery and strong links to China

In 2010, Hong Kong benefited from its well-established position as a key international finance centre and its close ties to mainland China and was well placed to weather the storm of the global financial crisis in 2008/09. As such, financial cards and payments experienced a solid recovery in 2010. Premium credit cards and charge cards are both set to continue expanding over the forecast period, the result of Hong Kong’s growing number of high net wealth individuals and high income earners. Furthermore, the integration of Hong Kong’s business and general culture with China continued apace in 2010, fuelled by further liberalisation of cross-border business and trade, together with easier and faster visa application processes. This ongoing integration stimulated demand for diversified banking services, especially for financial cards and payments related products which targeted the frequent travellers commuting between Hong Kong and China.

Rebound in consumer confidence fettered by ongoing cautious spending habits

Consumer confidence in Hong Kong enjoyed a solid rebound in 2010 from the effects of the global economic crisis and is expected to retain its upward momentum over the forecast period. The willingness of Hong Kong consumers to spend increased in 2010 due to the territory’s bright economic prospects, manifested in falling unemployment rates and rising income levels. However, cautious money management remains the top priority for many Hong Kong consumers, especially for the territory’s middle class consumers. These trends are leading to structural changes in spending habits.

The dominant position of the Octopus card remains unchanged

Despite the privacy scandal surrounding Octopus Holdings Ltd, which was caught selling its consumers’ personal data for profit in 2010, the Octopus card retained its dominant position in pre-paid cards due to the lack of competition and absence of a comparable alternative. During 2010, Octopus proactively expanded its role in the daily lives of the majority of Hong Kong residents, becoming virtually indispensable for many. Octopus Holdings Ltd has actively increased its merchant acceptance rate since June 2009. Furthermore, Octopus continued to apply innovation in terms of its non-payment applications, such as its use to operate access controls to residential and office buildings, indicating its pervasive penetration into all aspects of the daily lives of Hong Kong’s citizens. The concerns regarding the use of Octopus Holdings Ltd of its cardholders’ personal information is unlikely to prevent Hong Kong consumers from using Octopus cards because of the overwhelming convenience Octopus offers. However, consumers may begin to have second thoughts about participating in Octopus’s rewards programme in order to avoid allowing the company access to their personal information.

China UnionPay sets an aggressive agenda for its activities in Hong Kong

As the only financial card operator in China, China UnionPay Co Ltd (CUP) is aggressively promoting dual currency services and products in Hong Kong. CUP has built up a network of 28,000 point-of-sale machines and 2,430 ATMs which accept its financial cards covering the majority of commercial areas in Hong Kong. Meanwhile, CUP is also working on becoming a household name and ubiquitous in the daily lives of Hong Kong residents. BOC Hong Kong (Holdings) Ltd and CUP jointly launched their brand new ‘dual currency credit card Shenzhen-Hong Kong cross border autopay service’, through which cardholders enjoy an auto-pay service for pay bills including public utilities, satellite and cable television subscriptions and telecoms and internet subscriptions in both Hong Kong and Shenzhen.

Credit card APRs remain high while prime rates remain at record lows

The prime rate which is set by Hong Kong Monetary Authority (HKMA) stabilised at 5% in 2010. This record low rate was the result of the loosened money supply in Hong Kong, which was implemented in an attempt to turn the flagging economy of Hong Kong around. Even though the cost of borrowing to Hong Kong banks diminished, banks continued to have concerns about the unfavourable debt ratios of credit card holders following the economic downturn and subsequently many banks maintained high interest rates as a way of mitigating this perceived risk. By way of a simple comparison, Hang Seng Bank’s average mortgage lending rate was 2.5% in 2010, while its credit card APR rose to 30%.

Table of Contents

Table of Contents

Financial Cards and Payments in Hong Kong, China - Industry Overview

EXECUTIVE SUMMARY

Expanding consumer credit benefits from economic recovery and strong links to China

Rebound in consumer confidence fettered by ongoing cautious spending habits

The dominant position of the Octopus card remains unchanged

China UnionPay sets an aggressive agenda for its activities in Hong Kong

Credit card APRs remain high while prime rates remain at record lows

KEY TRENDS AND DEVELOPMENTS

Expanding consumer credit benefits from Hong Kong’s strong links to China

Rebound in consumer confidence fettered by cautious spending habits

Octopus’s dominant position unchanged in spite of privacy scandal

China UnionPay undertakes aggressive expansion in Hong Kong

MARKET INDICATORS

  • Table 1 Number of POS Terminals 2005-2010
  • Table 2 Number of ATMs 2005-2010
  • Table 3 Value Lost to Fraud 2005-2010
  • Table 4 Card Expenditure by Location 2010
  • Table 5 Card Expenditure by Category 2010
  • Table 6 Financial Cards in Circulation by Type: % Number of Cards 2005-2010
  • Table 7 Domestic versus Foreign Spend 2010

MARKET DATA

  • Table 8 Consumer Payments: Value 2005-2010
  • Table 9 Consumer Payments: Number of Transactions 2005-2010
  • Table 10 Financial Cards: Number of Cards in Circulation 2005-2010
  • Table 11 Financial Cards Transactions: Value 2005-2010
  • Table 12 Financial Cards: Number of Transactions 2005-2010
  • Table 13 Financial Cards: Number of Accounts 2005-2010
  • Table 14 Financial Cards: Number of Cards by Issuer 2005-2009
  • Table 15 Financial Cards: Number of Cards by Operator 2005-2009
  • Table 16 Financial Cards: Card Payment Transaction Value by Operator 2005-2009
  • Table 17 Financial Cards: Card Payment Transaction Value by Issuer 2005-2009
  • Table 18 Consumer Payments Forecast: Value 2010-2015
  • Table 19 Consumer Payments Forecast: Number of Transactions 2010-2015
  • Table 20 Financial Cards Forecast: Number of Cards in Circulation 2010-2015
  • Table 21 Financial Cards Forecast: Value 2010-2015
  • Table 22 Financial Cards Forecast: Number of Transactions 2010-2015
  • Table 23 Financial Cards Forecast: Number of Accounts 2010-2015

DEFINITIONS

ATM function

Debit function

Credit function

Commercial credit cards

Charge card function

Commercial charge cards

Open Loop pre-paid function

Closed Loop pre-paid function

Store cards

Pre-paid

Contact Smart Card

Contactless Smart Card

Card Expenditure by Location

Card Expenditure by Sector

Domestic versus Foreign

Value lost to fraud

  • Summary 1 Research Sources

Financial Cards and Payments in Hong Kong, China - Company Profiles

Bank of East Asia Ltd - Consumer Finance - Hong Kong, China

STRATEGIC DIRECTION

KEY FACTS

COMPANY BACKGROUND

COMPETITIVE POSITIONING

  • Summary 4 Bank of East Asia Ltd: Competitive Position 2009

BOC Hong Kong (Holdings) Ltd - Consumer Finance - Hong Kong, China

STRATEGIC DIRECTION

KEY FACTS

COMPANY BACKGROUND

COMPETITIVE POSITIONING

  • Summary 7 BOC Hong Kong (Holdings) Ltd: Competitive Position 2009

Dah Sing Bank Ltd - Consumer Finance - Hong Kong, China

STRATEGIC DIRECTION

KEY FACTS

COMPANY BACKGROUND

COMPETITIVE POSITIONING

  • Summary 10 Dah Sing Bank Ltd: Competitive Position 2008

Hang Seng Bank Ltd - Consumer Finance - Hong Kong, China

STRATEGIC DIRECTION

KEY FACTS

COMPANY BACKGROUND

COMPETITIVE POSITIONING

  • Summary 13 Hang Seng Bank Ltd: Competitive Position 2009

Octopus Holdings Ltd - Consumer Finance - Hong Kong, China

STRATEGIC DIRECTION

KEY FACTS

COMPANY BACKGROUND

COMPETITIVE POSITIONING

  • Summary 15 Octopus Holdings Ltd: Competitive Position 2009

ATM Transactions in Hong Kong, China - Category Analysis

HEADLINES

TRENDS

  • Multiple party branding promotions become popular in ATM cards in Hong Kong during 2010. DBS Bank (Hong Kong) Ltd, in conjunction with Octopus and China UnionPay (CUP), unveiled the innovative DBS Octopus ATM card in January 2010. The new DBS Octopus ATM card combines the functions of an ATM card with the functions of the Octopus contactless smart card, offering users the convenience of banking and making payments with one card. The DBS Octopus ATM card enables users to make purchases at 50,000 Octopus payment points through 2,500 service providers covering public transport operators and retailers and 80,000 retailer point-of-sale terminals through the EPS and CUP networks in Hong Kong. By consolidating banking, everyday spending and rewards into one product in this way, the new card is tailor-made to meet the demanding lifestyle needs of Hong Kong residents.

COMPETITIVE LANDSCAPE

  • There are three ATM networks available in Hong Kong. The Electronic Teller Card (ETC) system has been built up and supported by HSBC and Hang Seng Bank Ltd. The majority of remaining banks use ETC’s major rival system JETCO, which is the largest ATM network in Hong Kong. AEON is the third and by far the smallest ATM network in Hong Kong. AEON was the first non-financial institution to provide ATM services in Hong Kong. With the a much higher presence across southern Asia and the Indian subcontinent, the AEON ATM network maintains its ground against the competition its two major competitors by providing better and cheaper services to Hong Kong’s many South Asian visitors and expatriate residents.

PROSPECTS

  • ATM cards in Hong Kong will gradually integrate with debit cards during the forecast period. Consumers will increasingly come to see the convenience of using one card to achieve effective management of their cash, payments and even investments. This integration trend will be influenced by card operators. Master Card International Inc will be more apt to collaborate with banks in a bid to compete with Visa Inc. There are already Master Card debit cards embedded with ATM function circulating in Hong Kong. The Hang Seng Alpha card is accepted by Master retailers and users are also able to withdraw money from over 1,000 Hang Seng ATMs across Hong Kong.

CATEGORY DATA

  • Table 24 ATM Cards Category Performance: 2005-2010
  • Table 25 ATM Cards Category Performance: Number of Cards in Circulation 2005-2010
  • Table 26 ATM Cards Category Performance: % Growth 2005-2010
  • Table 27 ATM Cards in Circulation Category Performance: % Growth 2005-2010
  • Table 28 ATM Cards Forecast Category Performance: 2010-2015
  • Table 29 ATM Cards Forecast Category Performance: Number of Cards in Circulation 2010-2015
  • Table 30 ATM Cards Forecast Category Performance: % Growth 2010-2015
  • Table 31 ATM Cards in Circulation Forecast Category Performance: % Growth 2010-2015

Charge Card Transactions in Hong Kong, China - Category Analysis

HEADLINES

TRENDS

  • Charge cards are regarded as a status symbol in Hong Kong and remain a niche product due to their strict eligibility criteria. The negative impact of the global economic crisis was still being felt in charge cards during 2010, although demand did pick up. The number of charge cards in circulation increased by 2% in 2010, a similar growth rate to what was recorded in 2009, while charge cards transactions value increased by 3%. Charge cards faced stiff competition from the rewards and high retailer acceptance rate offered by credit card operators.

COMPETITIVE LANDSCAPE

  • American Express Co and Citigroup Inc are the leading charge card issuers in Hong Kong. The two companies captured a combined 85% share of all charge cards in circulation 2009. American Express Co maintained pole position with a 65% share of charge cards in circulation. American Express holds the dominant position in both personal and commercial charge card categories. Diners Club charge cards, issued by Citigroup, accounted for 21% of all charge cards in circulation in 2009.

PROSPECTS

  • Due to its much lower sales base, commercial charge cards will enjoy more rapid development over the forecast period, with the number of cards in circulation expected to grow by 2% CAGR. Commercial charge cards transactions is also expected to increase in constant value by 2% CAGR. Personal charge cards will remain dominant compared to commercial charge cards in terms of cards in circulation and transactions constant value.

CATEGORY DATA

  • Table 32 Charge Cards Category Performance: 2005-2010
  • Table 33 Charge Cards Category Performance: Number of Cards in Circulation 2005-2010
  • Table 34 Charge Cards Category Performance: % Growth 2005-2010
  • Table 35 Charge Cards in Circulation Category Performance: % Growth 2005-2010
  • Table 36 Personal Charge Cards Category Performance: 2005-2010
  • Table 37 Personal Charge Cards Category Performance: Number of Cards in Circulation 2005-2010
  • Table 38 Personal Charge Cards Category Performance: % Growth 2005-2010
  • Table 39 Personal Charge Cards in Circulation Category Performance: % Growth 2005-2010
  • Table 40 Commercial Charge Cards Category Performance: 2005-2010
  • Table 41 Commercial Charge Cards Category Performance: Number of Cards in Circulation 2005-2010
  • Table 42 Commercial Charge Cards Category Performance: % Growth 2005-2010
  • Table 43 Commercial Charge Cards in Circulation Category Performance: % Growth 2005-2010
  • Table 44 Charge Cards: Number of Cards by Issuer 2005-2009
  • Table 45 Charge Cards: Number of Cards by Operator 2005-2009
  • Table 46 Charge Cards Payment Transaction Value by Issuer 2005-2009
  • Table 47 Charge Cards Payment Transaction Value by Operator 2005-2009
  • Table 48 Personal Charge Cards: Number of Cards by Issuer 2005-2009
  • Table 49 Personal Charge Cards: Number of Cards by Operator 2005-2009
  • Table 50 Personal Charge Cards Transaction Value by Issuer 2005-2009
  • Table 51 Personal Charge Cards Transaction Value by Operator 2005-2009
  • Table 52 Commercial Charge Cards: Number of Cards by Issuer 2005-2009
  • Table 53 Commercial Charge Cards: Number of Cards by Operator 2005-2009
  • Table 54 Commercial Charge Cards Payment Transaction Value by Issuer 2005-2009
  • Table 55 Commercial Charge Cards Payment Transaction Value by Operator 2005-2009
  • Table 56 Charge Cards Forecast Category Performance: 2010-2015
  • Table 57 Charge Cards Forecast Category Performance: Number of Cards in Circulation 2010-2015
  • Table 58 Charge Cards Forecast Category Performance: % Growth 2010-2015
  • Table 59 Charge Cards in Circulation Forecast Category Performance: % Growth 2010-2015
  • Table 60 Personal Charge Cards Forecast Category Performance: 2010-2015
  • Table 61 Personal Charge Cards Forecast Category Performance: Number of Cards in Circulation 2010-2015
  • Table 62 Personal Charge Cards Forecast Category Performance: % Growth 2010-2015
  • Table 63 Personal Charge Cards in Circulation Forecast Category Performance: % Growth 2010-2015
  • Table 64 Commercial Charge Cards Forecast Category Performance: 2010-2015
  • Table 65 Commercial Charge Cards Forecast Category Performance: Number of Cards in Circulation 2010-2015
  • Table 66 Commercial Charge Cards Forecast Category Performance: % Growth 2010-2015
  • Table 67 Commercial Charge Cards in Circulation Forecast Category Performance: % Growth 2010-2015

Credit Card Transactions in Hong Kong, China - Category Analysis

HEADLINES

TRENDS

  • According to the Hong Kong Consumer Council, the majority of complaints regarding credit cards in Hong Kong are related to hidden fees and surcharges, which are most commonly levied when users renew their credit card services. In the majority of cases, issuing banks waive annual fees for the first year and automatically renew services annually, charging consumers without explicit notification. However, under current regulations, issuing banks are not allowed to conduct automatic renewal service without 30 days’ notice.

COMPETITIVE LANDSCAPE

  • Large commercial banks maintained the leading positions in credit cards in Hong Kong during 2009/10, extending their advantages in terms of scale over smaller banks. The top credit card issuer in Hong Kong during 2009 was HSBC Holdings Plc with a 26% share of the total number of credit cards in circulation. Standard Chartered Bank Plc ranked second with a volume share of 13%, followed by Hang Seng Bank Ltd with a volume share of 12%. BOC Hong Kong (Holdings) Ltd and Bank of East Asia rounded out the top five players with volume shares of 10% and 8% respectively.

PROSPECTS

  • The usage of Visa PayWave is expected to increase over the forecast period as increasing numbers of retailers in Hong Kong are expected to install Visa PayWave readers. It only took two years for Visa to build up a network of 7,400 Visa PayWave readers in 2,800 Visa PayWave retailers. With these facilities in place, contactless card technology is likely to become the most popular way of making small payments in Hong Kong during the forecast period. Based on a survey undertaken by Visa Inc in 2010, 70% of contactless payment users are likely to increase their usage of contactless payment features though convenience stores. Increasing numbers of banks in Hong Kong are expected to cooperate with Visa by issuing Visa PayWave compatible cards, including Hang Seng’s enJoy Visa Card, AEON KFC Visa Card, DBS COMPASS VISA and Everyday COMPASS VISA, the most popular Visa cards currently featuring PayWave contactless payment functions. This trend is also expected to enable Visa to reinforce its leading position in card operators in Hong Kong.

CATEGORY DATA

  • Table 68 Credit Cards Category Performance: 2005-2010
  • Table 69 Credit Cards Category Performance: Number of Cards in Circulation 2005-2010
  • Table 70 Credit Cards Category Performance: % Growth 2005-2010
  • Table 71 Credit Cards in Circulation Category Performance: % Growth 2005-2010
  • Table 72 Personal Credit Cards Category Performance: 2005-2010
  • Table 73 Personal Credit Cards Category Performance: Number of Cards in Circulation 2005-2010
  • Table 74 Personal Credit Cards Category Performance: % Growth 2005-2010
  • Table 75 Personal Credit Cards in Circulation Category Performance: % Growth 2005-2010
  • Table 76 Commercial Credit Cards Category Performance: 2005-2010
  • Table 77 Commercial Credit Cards Category Performance: Number of Cards in Circulation 2005-2010
  • Table 78 Commercial Credit Cards Category Performance: % Growth 2005-2010
  • Table 79 Commercial Credit Cards in Circulation Category Performance: % Growth 2005-2010
  • Table 80 Credit Cards: Number of Cards by Issuer 2005-2009
  • Table 81 Credit Cards: Number of Cards by Operator 2005-2009
  • Table 82 Credit Cards Payment Transaction Value by Issuer 2005-2009
  • Table 83 Credit Cards Payment Transaction Value by Operator 2005-2009
  • Table 84 Personal Credit Cards: Number of Cards by Issuer 2005-2009
  • Table 85 Personal Credit Cards: Number of Cards by Operator 2005-2009
  • Table 86 Personal Credit Cards Payment Transaction Value by Issuer 2005-2009
  • Table 87 Personal Credit Cards Payment Transaction Value by Operator 2005-2009
  • Table 88 Commercial Credit Cards: Number of Cards by Issuer 2005-2009
  • Table 89 Commercial Credit Cards: Number of Cards by Operator 2005-2009
  • Table 90 Commercial Credit Cards Payment Transaction Value by Issuer 2005-2009
  • Table 91 Commercial Credit Cards Payment Transaction Value by Operator 2005-2009
  • Table 92 Credit Cards Forecast Category Performance: 2010-2015
  • Table 93 Credit Cards Forecast Category Performance: Number of Cards in Circulation 2010-2015
  • Table 94 Credit Cards Forecast Category Performance: % Growth 2010-2015
  • Table 95 Credit Cards in Circulation Forecast Category Performance: % Growth 2010-2015
  • Table 96 Personal Credit Cards Forecast Category Performance: 2010-2015
  • Table 97 Personal Credit Cards Forecast Category Performance: Number of Cards in Circulation 2010-2015
  • Table 98 Personal Credit Cards Forecast Category Performance: % Growth 2010-2015
  • Table 99 Personal Credit Cards in Circulation Forecast Category Performance: % Growth 2010-2015
  • Table 100 Commercial Credit Cards Forecast Category Performance: 2010-2015
  • Table 101 Commercial Credit Cards Forecast Category Performance: Number of Cards in Circulation 2010-2015
  • Table 102 Commercial Credit Cards Forecast Category Performance: % Growth 2010-2015
  • Table 103 Commercial Credit Cards in Circulation Forecast Category Performance: % Growth 2010-2015

Debit Transactions in Hong Kong, China - Category Analysis

HEADLINES

TRENDS

  • Even though the effects of the global financial crisis abated in 2010 and the economy of Hong Kong is expected to rebound even more strongly in 2011, the Hong Kong economy remained fragile and the ongoing effects of the economic crisis remained uncertain in 2010. Furthermore, relatively high unemployment rates in 2009 led Hong Kong consumers to become increasingly cautious about their spending and choose more reliable money management products. The number of debit cards operated through the EPS system reached 13.5 billion in 2010, while the number of debit cards operated through the China UnionPay system reached 1.4 billion. This represented an increase of 152 million debit cards in circulation and 70% of the debit cards newly issued in 2009.

COMPETITIVE LANDSCAPE

  • HSBC Holdings Plc remained the leading debit card issuer in Hong Kong during 2009 with a 26% share of total debit cards in circulation. Standard Chartered Bank Plc and Hang Seng Bank Ltd followed in second and third positions respectively, each with a volume share of 12%. BOC Hong Kong (Holdings) Ltd ranked fourth with a 10% share, while Bank of East Asia Ltd rounded out the top five players with an 8% volume share.

PROSPECTS

  • HSBC, Standard Chartered Bank and Hang Seng Bank are all expected to remain the dominant players in debit cards in Hong Kong during the forecast period, building on the 49% of all debit cards in circulation they accounted for combined in 2009. As for operators, although China UnionPay had a share of 10% of all debit cards in circulation in 2010, which is very low in comparison to the 91% share of EPS, China UnionPay enjoyed tremendous growth in terms of newly issued debit cards during the review period as its share of debit cards in circulation increased by 12% in 2009, while EPS’s share of debit cards in circulation increased by only 1%. China UnionPay’s volume share of debit cards is expected to continue increasing strongly over the forecast period, mainly because the company continues to benefit from the increasing economic collaboration and cultural exchange taking place between mainland China and Hong Kong.

CATEGORY DATA

  • Table 104 Debit Cards Category Performance: 2005-2010
  • Table 105 Debit Cards Category Performance: Number of Cards in Circulation 2005-2010
  • Table 106 Debit Cards Category Performance: % Growth 2005-2010
  • Table 107 Debit Cards in Circulation Category Performance: % Growth 2005-2010
  • Table 108 Debit Cards: Number of Cards by Issuer 2005-2009
  • Table 109 Debit Cards: Number of Cards by Operator 2005-2009
  • Table 110 Debit Cards Payment Transaction Value by Issuer 2005-2009
  • Table 111 Debit Cards Payment Transaction Value by Operator 2005-2009
  • Table 112 Debit Cards Forecast Category Performance: 2010-2015
  • Table 113 Debit Cards Forecast Category Performance: Number of Cards in Circulation 2010-2015
  • Table 114 Debit Cards Forecast Category Performance: % Growth 2010-2015
  • Table 115 Debit Cards in Circulation Forecast Category Performance: % Growth 2010-2015

Pre-Paid Card Transactions in Hong Kong, China - Category Analysis

HEADLINES

TRENDS

  • Pre-paid cards continued to register the fastest growth in the number of cards in circulation of all financial cards categories in Hong Kong during 2010, slightly faster than ATM cards. The number of closed loop pre-paid cards in circulation increased by 14% in 2010 while the number of open loop pre-paid cards in circulation increased by 21%. Despite the well-publicised privacy scandals which hit Octopus Holdings Ltd in 2010, ownership of its ubiquitous Octopus card is still increasing rapidly.

COMPETITIVE LANDSCAPE

  • Octopus Holdings Ltd continues to dominate pre-paid cards Hong Kong, holding a 99% share of pre-paid cards in circulation in 2009 as well as a 99% value share of pre-paid cards transactions. Dah Sing Bank Ltd and Chong Hing Bank Ltd are the leading companies among the remaining players, although both companies hold marginal shares in terms of transaction value and number of cards in circulation.

PROSPECTS

  • The ongoing success of the Octopus card can be ascribed to its convenience of use and extensive functionality, the massive network of top-up terminals and its easy top-up procedures. However, financial cards equipped with Visa PayWave, which is powered by new contactless payment technology, will challenge the Octopus card during the forecast period by offering similar features, with the only current disadvantage of Visa PayWave being the comparatively limited terminal network. The pros of Visa PayWave include the stronger link between the cards and the banking accounts from which funds are withdrawn. The well-established credit card system in Hong Kong is likely to see the use of Visa PayWave extending from its current focus on micro payments to the payment of larger amounts. Compared with single low value courtesy overdraft offered by Octopus, Visa PayWave allows cardholders to integrate their daily expenses into their credit card bills and enjoy all the benefits that a credit card offers.

CATEGORY DATA

  • Table 116 Pre-paid Cards Category Performance: 2005-2010
  • Table 117 Open Loop Pre-paid Cards Category Performance: 2005-2010
  • Table 118 Closed Loop Pre-paid Cards Category Performance: 2005-2010
  • Table 119 Pre-paid Cards Category Performance: Number of Cards in Circulation 2005-2010
  • Table 120 Pre-paid Cards Category Performance: % Growth 2005-2010
  • Table 121 Open Loop Pre-paid Cards Category Performance: % Growth 2005-2010
  • Table 122 Closed Loop Pre-paid Cards Category Performance: % Growth 2005-2010
  • Table 123 Pre-paid Cards in Circulation Category Performance: % Growth 2005-2010
  • Table 124 Pre-paid Cards: Number of Cards by Issuer 2005-2009
  • Table 125 Pre-paid Cards: Number of Cards by Operator 2005-2009
  • Table 126 Pre-paid Cards Transaction Value by Issuer 2005-2009
  • Table 127 Pre-paid Cards Transaction Value by Operator 2005-2009
  • Table 128 Open Loop Pre-paid Cards: Number of Cards by Issuer 2005-2009
  • Table 129 Open Loop Pre-paid Cards: Number of Cards by Operator 2005-2009
  • Table 130 Open Loop Pre-paid Cards Transaction Value by Issuer 2005-2009
  • Table 131 Open Loop Pre-paid Cards Transaction Value by Operator 2005-2009
  • Table 132 Closed Loop Pre-paid Cards: Number of Cards by Issuer 2005-2009
  • Table 133 Closed Loop Pre-paid Cards: Number of Cards by Operator 2005-2009
  • Table 134 Closed Loop Pre-paid Cards Transaction Value by Issuer 2005-2009
  • Table 135 Closed Loop Pre-paid Cards Transaction Value by Operator 2005-2009
  • Table 136 Pre-paid Cards Forecast Category Performance: 2010-2015
  • Table 137 Open Loop Pre-paid Cards Forecast Category Performance: 2010-2015
  • Table 138 Closed Loop Pre-paid Cards Forecast Category Performance: 2010-2015
  • Table 139 Pre-paid Cards Forecast Category Performance: Number of Cards in Circulation 2010-2015
  • Table 140 Pre-paid Cards Forecast Category Performance: % Growth 2010-2015
  • Table 141 Open Loop Pre-paid Cards Forecast Category Performance: % Growth 2010-2015
  • Table 142 Closed Loop Pre-paid Cards Forecast Category Performance: % Growth 2010-2015
  • Table 143 Pre-paid Cards in Circulation Forecast Category Performance: % Growth 2010-2015

Store Card Transactions in Hong Kong, China - Category Analysis

HEADLINES

TRENDS

  • Store cards in Hong Kong is dominated by chained forecourt retailers such as Shell Hong Kong Ltd, Exxon Mobil Hong Kong Ltd and Chevron Hong Kong Ltd. Store cards remain less diversified than other kinds of financial cards in Hong Kong and are relatively unpopular. In order to counter the stiff competition coming from credit cards, especially co-branded credit cards issued by chained forecourt retailers, store cards offer consumers multiple benefits, including reward programmes and discounts at participating forecourt retailers as well as other value added services.

COMPETITIVE LANDSCAPE

  • Shell Hong Kong Ltd remained the leading store card issuer in Hong Kong during 2009, accounting for 43% of all store cards in circulation. Generally issued by business operators to their fleet drivers, Shell store cards can be used at 47 forecourt retailers across Hong Kong as well as another four in Macau. Shell was subject to a 10% increase in transactions value in 2009, rising to HK$186 million. This was largely the result of rising fuel prices.

PROSPECTS

  • Store cards in Hong Kong will continue to be dominated by forecourt retailers over the forecast period. In the face of escalating fuel prices, consumers will continue to take advantage of the fuel discounts and other benefits offered by forecourt retailers store cards.

CATEGORY DATA

  • Table 144 Store Cards Category Performance: 2005-2010
  • Table 145 Store Cards Category Performance: Number of Cards in Circulation 2005-2010
  • Table 146 Store Cards Category Performance: % Growth 2005-2010
  • Table 147 Store Cards in Circulation Category Performance: % Growth 2005-2010
  • Table 148 Store Cards: Number of Cards by Issuer 2005-2009
  • Table 149 Store Cards: Payment Transaction Value by Issuer 2005-2009
  • Table 150 Store Cards Forecast Category Performance: 2010-2015
  • Table 151 Store Cards Forecast Category Performance: Number of Cards in Circulation 2010-2015
  • Table 152 Store Cards Forecast Category Performance: % Growth 2010-2015
  • Table 153 Store Cards in Circulation Forecast Category Performance: % Growth 2010-2015

Segmentation

Segmentation

This market research report includes the following:

  • Financial Cards and Payments
    • Financial Cards in Circulation
      • ATM Function
      • Charge Card Function
        • Commercial Charge Cards
        • Personal Charge Cards
      • Credit Function
        • Commercial Credit Cards
        • Personal Credit Cards
      • Debit Function
      • Pre-Paid Function
        • Closed Loop Pre-Paid Function
        • Open Loop Pre-Paid Function
      • Store Cards
    • Transactions
      • Total Cards Transactions
        • ATM Transactions
        • Card Payment Transactions
          • Charge Card Transactions
            • Commercial Charge Card Transactions
            • Personal Charge Card Transactions
          • Credit Card Transactions
            • Commercial Credit Card Transactions
            • Personal Credit Card Transactions
          • Debit Transactions
          • Pre-Paid Transactions
            • Closed Loop Pre-Paid Card Transactions
            • Open Loop Pre-Paid Card Transactions
          • Store Card Transactions
      • Consumer Payment Transactions
        • Card Payment Transactions (Excl Commercial)
        • Electronic Direct/ACH Transactions
        • Paper Payment Transactions
          • Cash Transactions
          • Other Paper Payment Types

Statistics Included

Statistics Included

For each category and subcategory you will receive the following data in Excel format:

From Passport

  • Market Sizes
  • Company Shares
  • Analysis by Type
  • Card Expenditure by Location
  • Card Expenditure by Sector
  • Domestic vs Foreign Spend

Market size details:

  • Retail Value retail selling price % growth
  • Retail Value retail selling price local currency, USD, EUR, GBP, CHF, JPY
  • Retail Value retail selling price per capita local currency, USD, EUR, GBP, CHF, JPY
  • Retail Value retail selling price real (constant 2008) Prices % growth
  • Retail Value retail selling price real (constant 2008) Prices local currency, USD, EUR, GBP, CHF, JPY
  • Retail Value retail selling price real (constant 2008) Prices per capita local currency, USD, EUR, GBP, CHF, JPY
  • Number of Cards
  • Number of Cards % growth
  • Number of Cards per capita
  • Number of Accounts
  • Number of Accounts % growth
  • Number of Accounts per capita
  • Transactions
  • Transactions % growth
  • Transactions per capita
  • Retail Value retail selling price Nominal (Current) Prices % growth
  • Retail Value retail selling price Nominal (Current) Prices local currency, USD, EUR, GBP, CHF, JPY
  • Retail Value retail selling price Nominal (Current) Prices per capita local currency, USD, EUR, GBP, CHF, JPY

Methodology

Methodology

Global insight and local knowledge

With 40 years’ experience of developed and emerging markets, Euromonitor International’s research method is built on a unique combination of specialist industry knowledge and in-country research expertise.

This approach is what enables us to achieve our goal of building a market consensus view of size, shape and trends across the full distribution universe of each category. We factor in whichever channels are relevant, from large-scale grocery to direct sellers, from discount stores to local mom-and-pop outlets.

Industry specialists

Each industry we cover is managed by an Industry Manager and team of Industry Analysts who research and report on their specialist categories all year round.

Our collaborative approach to research means that these industry teams are in constant dialogue with industry players and opinion formers. The planning of our research programmes reflects latest market trends and industry events. In completing each update project, this provides invaluable input to the testing, review and finalisation of our data.

The specialist in-house teams bring together findings from all stages of the annual research process. They work closely with in-country analysts, assess and challenge data and exercise final editorial control over the publication of new data and analysis.

Country and regional analysts

Our in-country analyst network is managed by country and regional analysts in our offices around the world. Working closely with each in-country team, the regional research management team ensures that all country researchers are well schooled in best practices, from the information collected in store checks, to the dialogue we build in trade surveys. Our country analysts ensure that national reports explain the data trends and provide clear insights into the local market’s dynamics.

In-country research network

To deliver fresh insights every year in countries all around the world, we believe the strongest approach is to use analysts on the ground. They bring fluency in local language, physical proximity to the best sources, an ability to engage directly with local industry contacts, and an awareness of how the products and services we study are advertised, sold and consumed. These are essential parts of our ability to report incisively on these markets.

Research Methodology

Our research methods

Each Euromonitor International industry report is based on a core set of research techniques:

Desk research

With industry events, corporate activity, trends and new product introductions tracked year round by our industry team, desk research provides a starting point for the in-country research programme. Our in-country researchers will access the following sources:

  • National statistics offices governmental and official sources
  • National and international trade press
  • National and international trade associations
  • Industry study groups and other semi-official sources
  • Company financials and annual reports
  • Broker reports
  • Online databases
  • The financial, business and mainstream press

Accessing sources is only the first step. The ability to interpret and reconcile often conflicting information across multiple sources is a key aspect of the added value we provide.

Store checks

Store checks are an integral part of our methods for product industries. Carried out on the ground across a relevant mix of channels, the information gained provides first-hand insights into the products we are researching, specifically:

  • Place: We track products in all relevant channels, selective and mass, store and non-store
  • Product: What are innovations in products, pack sizes and formats?
  • Price: What are brand price variations across channels, how do private label’s prices compare to those of branded goods?
  • Promotion: What are marketing and merchandising trends, offers, discounts and tie-ins?

Findings are cross-referenced with brand share data analysis. The results, combined with the findings of desk research, provide a strong basis for identifying key areas of questioning to take forward into our trade survey.

Trade survey

Interaction with global players at corporate HQ and regional levels is complemented by unique local data and insights from our in-country trade surveys around the world. Through the high profile of the Euromonitor International brand, we are able to talk directly to a wide range of sources and therefore inform our analysis with the knowledge and opinions of the leading operators in the market.

Trade surveys allow us to:

  • Fill gaps in available published data per company
  • Generate a consensus view of the size, structure and strategic direction of the category
  • Access year-in-progress data where published sources are out of date
  • Evaluate the experts’ views on current trends and market developments

In building our composite industry view, we engage with a variety of personnel in key players at all points of the supply chain: materials suppliers, manufacturers, distributors, retailers and service operators. We also interview desk research sources: industry associations; study groups; and third party observers from the trade and financial press.

Our objective is to engage in conversation with trade sources in which we exchange ideas and views on the industry, sharing our work-in-progress findings on supply/demand dynamics and potential. This dialogue enhances both parties’ understanding of the local market. The scope and reach of our trade survey also serves to eliminate bias (intentional and unintentional) from any single source.

Company analysis

At a global level, our company research combines our mix of industry interaction and use of secondary sources such as annual accounts, broker reports, financial press and databases. From a data perspective, the aim is to build “top-down” estimates of major players’ total global and regional sales.

At a country level, in line with local reporting requirements, we access annual accounts, national-specific company databases and local company websites. These are all invaluable sources as we build a view of each domestic player’s size and position within very specific categories of the industry.

Forecasts

Data projections and future performance analysis are key elements of Euromonitor International’s market intelligence. Working with historic trends of 15 years or more, a key aspect of our trade survey is to engage industry insider views of the next five years. Will volumes maintain their historic trend? Will price increases or falls of recent years continue, accelerate or slow down? Will increasing demand for one product cannibalise sales of another?

Forecasts represent many of the essential conclusions we have reached about the current state of the market, how it works and how it behaves under different macro and micro conditions. Our written analysis will state the assumptions and the trade opinion behind whether our predictions are optimistic or pessimistic, so that clients can use our statistical forecasts with confidence.

Data validation

All data is subjected to an exhaustive review process, at country, regional and global levels.

The interpretation and review of sources and data inputs forms a central part of the collaboration between industry teams and country researchers. Numbers are delivered to regional and global offices with an audit trail of sources and calculations to allow for a thorough evaluation of data sense and integrity.

Upon completion of the country review phase, data is then reviewed on a comparative basis at regional and then at a global level. Comparative checks are carried out on per capita consumption and spending levels, growth rates, patterns of category and subcategory breakdowns and distribution of sales by channel. Top-down estimates are reviewed against bottom-up regional and global market and company sales totals.

Where marked differences are seen between proximate country markets or ones at similar developmental levels, supplementary research is conducted in the relevant countries to confirm and/or amend those findings. This process ensures international comparability across the database, that consistent category and subcategory definitions have been used and that all data has been correctly tested. We make sure that possible discrepancies between different published sources have been reconciled and that our interpretation of opinion and expectation from each country’s trade sources has been applied to form a coherent international pattern.

Market analysis

Another integral part of all our research programmes is that all Euromonitor International data is accompanied by clear written analysis. From a research perspective, this explains and substantiates data findings. From a client perspective, this offers unique insights into local consumption trends, routes to market, brand preferences, channel dynamics and future trends.

Our country level analysis also provides invaluable input into the ability of our central industry specialist teams to marry local insights with strategic conclusions on the direction of the market regionally and globally.




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