Weddings in China

How the occasion creates unique Opportunities across a

wide range of business sectors
Fall 2008
 Weddings in China
Executive Summary

 In 2007, ~ 9.5 MM couples were married in China

 Weddings are highly seasonal with about 25% to 30% taking place during
the May and October holidays1
 China’s wedding industry2 reached USD 265 Bn in 2007
 The industry is forecasted to grow at a rate of 10% to 20% in next 3 years
 Increased spending on weddings in China is being driven by economic
and cultural change

 To capture significant revenue from this large and growing market, firms
are:
• Developing targeted products
• Implementing specialized pricing and promotions
• Placing products in strategic locations
• Staging events and giveaways to attract attention

Note: 1May Holiday is International Labor’s Day and October Holiday is National Day. 2Includes wedding day expenses (i.e. products and services for wedding
ceremony) and wedding-related expenses (i.e., house, furnishings, etc.)
Source: China Wedding Industry Service Association; Statistics Center under China International Wedding Expo Committee; Expert interviews; News release;
Grail analysis
| Copyright © 2008 Grail Research, LLC 2
 Weddings in China
Market Facts
The number of weddings in China and the amount spent surrounding the
wedding occasion rose significantly from 2005 to 2007

9.5 MM couples were married in China in 2007

 16% annual growth since 2005
 Spike in 2006 due to Golden Pig Year1 in 2007

More than USD 265 Bn was spent on wedding and wedding-related items in 2007
 Total wedding expenses have grown at a rate of 31.6% since 2005
 Spend is focused in urban areas (70% of wedding day expenses)
 Spend on wedding-related items is higher (USD 155 Bn) and growing faster
(38%) than spend on the actual wedding event (USD 110 Bn, 22%)

Total Number of Weddings Total Wedding Expenses

265.0
MM USD Bn 220.0 Wedding Day Expenses
9.5 9.5
8.2 155.0 6% 155.0 Wedding-Related Expenses
124.0 10%
81.0

96.0 110.0
74.0

2005 2006 2007 2005 2006 2007E

Note: 1Golden Pig Year occurs once every 60 years and Chinese believe babies born in this year will have a lucky and wealthy life
Source: China Wedding Industry Development Report (2006 - 2007), Statistics Center under China International Wedding Expo Committee, March 2006; China
Wedding Service Market Development Analysis in 2006, Department of Commerce, 2007; Grail analysis
| Copyright © 2008 Grail Research, LLC 3
 Weddings in China
Key Drivers
Increase in wedding spending is being driven by cultural realities and economic
changes taking place in China
Cultural Drivers

“
• One-Child Policy – Parents can and want to give their child a
dream wedding
• Parents pay for at least 20% of wedding expenses for almost …The majority of
half of all couples wedding couples were born
in 1980’s. Most of them are
• 14% of couples have at least 80% of wedding expenses
funded by parents “the only child” in the
families and thus, their
• Traditional Living Arrangements – Young people live with parents would spend larger
their parents until marriage; a new house (and associated amounts of money on their
purchases) are a significant part of wedding-related expenses
sons’/daughters’

“
• Generation Characteristics - Today’s culture places much weddings… to ensure they

”
Wedding consumption more emphasis and value on individuality; young people spend have a ‘good’ wedding.
behaviors of the current more money on their wedding and household to reflect their
generation are featured with personal tastes and sensibilities
-Sales Manager for
impulse, reckless, and eruptive Wedding Service Company
consumption. Parents of the
newlyweds are ready to invest Economic Drivers
their lifelong savings as well as • Growing Economy – Increase in disposable income and improved economic outlook have led
time and efforts into a great to newlyweds’ willingness to invest more than 30% of their savings in their wedding occasion

”
wedding for their only child.
• Spending Habits – Availability and cultural acceptance of debt has led to newlyweds using
-General Secretary, the Committee credit cards and bank loans as funding vehicles for their wedding expenses
of Wedding Service Industries

Source: China Wedding Industry Development Report (2006 - 2007), Statistics Center under China International Wedding Expo Committee; China’s National
Statistics Bureau; China’s Central Bank; News release
| Copyright © 2008 Grail Research, LLC 4
 Weddings in China
Businesses are Adapting to Take Advantage…
Décor Jewelry
2 Implementing
Specialized Pricing and Wine
Promotions

Packages

1 Developing
Targeted Products
3 Placing Products
Strategically
Weddings Create Unique Business
Opportunities for Product and
Service Providers
Gifts

4 Staging Events to
Attract Media Coverage
Furniture

Automobile Electronics
| Copyright © 2008 Grail Research, LLC 5
 Developing Targeted Products

1 Developing products tailored

around the wedding event

Engaged couples are an important consumer

Wedding-related purchases include more than 70 segment due to their strong purchasing power,
categories of products and services and manufacturers/providers compete for their
business by creating products specifically
targeted at the wedding market

| Copyright © 2008 Grail Research, LLC 6

1 Examples of Targeted Products

Manufacturers are creating products specifically targeted to the preferences and needs of
newlywed couple setting up their first home…
Financial Services
Novelty Items
• Personal bank loans are offered to meet the unique financial
• Galanz, the largest home appliance manufacturer in China, needs of newlyweds
launched its ‘China Red’ series (all the products are painted
red) to attract the discerning eye of the fashionable young • The Bank of Jiangsu launched a new credit card offering up
couple to CNY 50,000 (~USD 7,000) credit to cover wedding
expenses
• Quanxing, a major Chinese white wine maker, created the
“520” brand to target wedding banquets ( the pronunciation Pricing With Lucky Numbers
of 520 is similar to that of “I love you” in Chinese) • Many vendors (particularly jewelry makers and wine sellers)
• Candy manufacturers offer packaged candies suggestive of cater to Chinese tradition, setting the prices of their wedding
romance and bliss as the perfect wedding favor products at lucky numbers. The prices might include the
number ‘9’ for longevity, ‘6’ for luck, and/or ‘8’ for wealth

“ “
There are some newlyweds who applied for bank
People buy Jin Liu Fu (a popular Chinese white loans to fund their weddings… The newlyweds’
wine brand), because they like the name. (Jin mindset is very much different as compared ten years

” ”
means gold, Liu wealth and Fu bless)… ago as they now embrace credit consumption…

- Sales Manager for a Wedding Management

Service Company in Beijing - General Secretary for the Committee of Wedding Service
Industries under China Association of Social Workers

| Copyright © 2008 Grail Research, LLC 7

 Implementing Specialized Pricing

2 Applying pricing strategies to

boost sales

Newlywed couples purchase a wide range of This creates an opportunity for product and service
products and services in a short period of time providers to bundle their products or services and
(normally in 2-3 months) develop special discounts to gain an edge over
competitors

| Copyright © 2008 Grail Research, LLC 8

2 Examples of Specialized Pricing

Product and service providers use discounts and bundles to capture their share of
newlywed spending
• HaoTian Wedding, a wedding planning company in Chengdu,
Bundling Products
partnered with the provider of ‘Love you for 10,000 years’ wine
• Fivestar, an electronics chain retailer, held a promotional to sell the wine as a part of its wedding management services
campaign in 2007 targeting newlyweds
Bulk Sales
 Bundles of electronics and home appliances were offered
• Tuangou, the practice of arranging large scale group
at a high discount
purchases, has migrated to the web and now such sites offer
 Bundles accounted for 70% of revenue during promotion; wedding-related products and services
~ 90% of bundles were purchased by couples setting up
Newlywed Discount
new homes
• In 2006, Nanjing FIAT car company held a sale offering
• In 2007, Jin Liu Fu, a wine provider, collaborated with
newlywed couples a discount of CNY 3,888 (USD 555) on the
Laofengxiang Jewelry to bundle wine and jewelry in wedding
purchase of a new car
packages

“ “
I purchased all the stuff for my new wedding house by
Sometimes other products like cigarettes and joining a group purchase organization where I
wedding candies could also be bundled with bought everything at one stop at very favorable prices.
wedding wines…. The wedding management service company also
- Sales Manager for a Well-Known Chinese helped me get everything done in a total package…
White Wine Distributor
- Newlywed from Shanghai

| Copyright © 2008 Grail Research, LLC 9

 Placing Products Strategically

3 Strategically placing products to

reach target buyers

In the relatively unstructured wedding market, it is Placing products in locations frequented by

difficult to reach target buyers and stand out from couples planning weddings helps providers attract
competitors business

| Copyright © 2008 Grail Research, LLC 10

3 Examples of Product Placements

Getting exposure in the right places can really give businesses an edge over the
competition
Wedding Venues Wedding Expos
• Vendors place advertisements targeting engaged couples at • Each year wedding vendors exhibit at wedding expos and
certain sites to create touch points with prospective customers: attend industry promotion fairs in major Chinese cities (e.g.
2007 Chinese International Wedding Expo featured 250+
 Local Civil Affair Bureaus where couples register for
vendors from 30 countries)
marriage
• Potential vendors often offer discounts at events to encourage
 Photo studios where wedding photos are taken
immediate purchases (e.g. Tourbillon Watch and Jinfo Watch
 Hotels where wedding ceremonies are held or that are offered a 30% discount at a 2008 exhibition)
potential honeymoon destinations

“ To seize the chances of contacting consumers, we

normally exhibit some bottles of our wedding
wines in the offices of wedding service providers, or
“ We booked the wedding photography service
at the Wedding Expo… There were more visual

”
displays as references to help us to make a

”
set up a exhibition shelf in the restaurant of five decision.
star hotels…
- Sales Manager for a Well-Known Chinese - Newly-Married Professional
White Wine Distributor

| Copyright © 2008 Grail Research, LLC 11

Staging Events and Giveaways to Attract Attention

4 Creating novel events and giveaways

to fuel brand awareness

To promote their products and services, vendors Sponsoring weddings and contests can build
look beyond advertising and product placement reputation and prominently associate a brand
to attract attention to their offerings with the wedding occasion

| Copyright © 2008 Grail Research, LLC 12

4 Examples of Events and Giveaways

Sponsoring weddings and sweepstakes attracts media coverage and helps build brand
awareness and association
Contests and Giveaways Sponsored Weddings

• In 2006, Gu Loulan, a wine manufacturer, offered Chery QQ • Traditional Chinese white wine maker, Xifeng, sponsored
cars for the wedding ceremonies of 6 couples who bought their a 34 couple wedding event in Baoji city in 2007 to
wine promote its specially-designed catering services

• Jinsihou, a major wedding candy maker, offered free wedding • Jiangmen photography studio group, Guangdong Sese,
dress rental to its customers sponsored a package in 2008 that included a collective
wedding ceremony, photography services and a
• Quanxing, a Chinese white wine maker, gave away an honeymoon trip
instruction guide on wedding ceremonies and held public
wedding culture education road shows to build their reputation
and boost sales

“ … It is a common practice for real estate

developers to sponsor “wedding-themed”
marketing activities.

- Industry Analyst in China Wedding Association

”“ Weddings have taken on other social functions.

For example, public relations shows (i.e., a
vendor holds a wedding for their clients) and
social networking opportunities for the
newlyweds and their parents.
- Industry Analyst in Chinese Wedding Association

| Copyright © 2008 Grail Research, LLC 13

Identifying Unique Business Opportunities in China
How can we help your organization?

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industry contacts, etc.) and relationships to access unpublished
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Focused on getting clients the answers they need to make

important strategic decisions

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