As Chinese financial market opens up for foreign players, foreign banks are becoming more popular among Chinese customers, mainly the higher class that rates banking with overseas banks as a mark of high social status, as per AC Nielsen study, 2006.
Study highlights that Chinese consumers are getting more aware about overseas banks in three major cities like Beijing, Guangzhou & Shanghai. Over 50 % of those interviewed in Shanghai could name a foreign bank, up by 6 % from 2005. This is an important change as less than 50 % of those interviewed in 2005 could name only one foreign bank. Bega Ng, AC Nielsen's financial director, stated that Chinese consumers find banking with foreign banks more prestigious.
DINK (Dual Income No Kids) families deposit a third of their earnings into banks every month. They invest around 5-10% of monthly earnings & rest is utilized for other spending.
"It is expected that the number of households having access to banks is likely to increase by a CAGR of 23.11% in near future. The average Chinese population has high saving rate of around 50%. This is likely to offer greater opportunities for the banking sector in china," as per the report "China Banking Sector Analysis (2006-2009)" published by RNCOS.
Though the gap is narrowing between overseas & local banks, domestic banks are still the favorite of Chinese consumers.
Ng said that local banks get many benefits in domestic market as they are better familiar with domestic market & many of them own a broad network of ATMs & branches. For overseas players, the key to survive in the competition is effective communication with customers & building a brand name in long term.
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