The$power$of$ globe$shopping$ UNDERSTANDING! THE UHNW CONSUMER! LONDON, May 14!

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Edmund Rudolph McCarthy
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1 The$power$of$ globe$shopping$ UNDERSTANDING! THE UHNW CONSUMER! LONDON, May 14!

2 globe$shop0per$ /ˈglōbˌSHäpər/$ noun$ 1.$ $a$person$who$considers$shopping$as$a$$ $fundamental$part$of$their$travel$experience.$ $ globe$shoppers$are$the$sixth$con3nent$for$$ $the$retail$industry $ $

3 noun$ 1.$ $a$person$who$considers$shopping$as$a$$ $fundamental$part$of$their$travel$experience.$ $ globe$shoppers$are$the$sixth$con3nent$for$$ $the$retail$industry $ $ 2.$ $a$fastbgrowing$retail$market$segment,$$ $which$global$worth$was$esemated$at$more$ $than$eur'48'billion$in$2013.$ $ building$growth$from$globe$shoppers$ $the$ $world s$most$valuable$customers. $

4 Source:$Global$Blue$ Shopping'is'my'priority'when'I'travel ' 82%$ 56%$ 48%$ Russians$ MidBEasterns$ Chinese$ gl /ˈg nou 1.$ $ $ $ $

5 Share'of'sales'for'luxury'brands' 40%$ $ $ 2.$ $ $ $ $ $ 60%$ Source:$Global$Blue$ DomesEc$shoppers$ Globe$shoppers$

6 Travel$Retail$is$a$key$channel$for$winning$$ over$one$billion$new$consumers;$it$is$present$$ around$the$world$as$a$sixth$con3nent. $ JeanBPaul$Agon$

7 Where$do$they$ come$from?$

8 JANFDEC'2013:'top'5'globe'shopper'naMons'by'share'of'total'spent'' 27%$ 46%$ 3%$3%$ 4%$ 17%$ China$ Russia$ Indonesia$ USA$ Japan$ Others$ Source:$Global$Blue$AnalyEcs$

9 JANFAPR'2013:'top'5'globe'shopper' namons'by'share'of'total'spent' JANFAPR'2014:'top'5'globe'shopper' namons'by'share'of'total'spent' 22%$ China$ Russia$ China$ Russia$ 27%$ 47%$ Indonesia$ Japan$ Indonesia$ USA$ 47%$ 3%$ 4%$ 5%$ 20%$ Thailand$ Others$ Japan$ Others$ 3%$ 3%$ 3%$ 17%$ Source:$Global$Blue$AnalyEcs$

10 Investors$should$switch$their$focus$from$China$to$the$ TLC$(Travelling$Luxury$Consumers),$a$more$powerful$ force$than$the$chinese$market$alone. $$ Angela$Ahrendts$

11 Where$do$they$ shop?$

12 JANFDEC'2013:'top'5'desMnaMon' countries'by'share'of'total'spent'' JANFAPR'2014:'top'5'desMnaMon' countries'by'share'of'total'spent'' 27%$ 18%$ France$ Italy$ France$ UK$ 27%$ 18%$ 16%$ UK$ Germany$ Italy$ Singapore$ 16%$ 11%$ Singapore$ Germany$ 12%$ 12%$ 15%$ Others$ Others$ 12%$ 16%$ Source:$Global$Blue$AnalyEcs$

13 How$much$do$ they$spend?$

14 JANFDEC'2013:'average'spend'of'top'5' globe'shopper'namons' JANFAPR'2014:'average'spend'of'top'5' globe'shopper'namons' $ $'815$$ $ $'846$$ $ $'870$$ $ $'608$$ $ $'647$$ $ $'648$$ $ $'509$$ $ $'501$$ $ $'514$$ $ $'502$$ $ $'356$$ $ $'358$$ China$ Russia$ Indonesia$ USA$ Japan$ Market$ China$ Russia$ Indonesia$ Japan$ Thailand$ Market$ Source:$Global$Blue$AnalyEcs$

15 $10,800$ The$shopping$budget$of$a$Chinese$globe$shopper$$ per$european$trip.$ Source:$Global$Blue$Dossier$ The$growing$complexity$of$the$Chinese$globe$shopper $

16 Welcome$to$the$ new$normal$

17 2012F2014:'yearFonFyear'growth'rate'of'Chinese'total'spend'' 100%$ 90%$ 80%$ 70%$ 60%$ 50%$ 40%$ 30%$ 20%$ 10%$ 0%$ B10%$ B20%$ B30%$ JanB12$ FebB12$ MarB12$ AprB12$ MayB12$ JunB12$ JulB12$ AugB12$ SepB12$ OctB12$ NovB12$ DecB12$ Ja Source:$Global$Blue$AnalyEcs$

18 2012F2014:'yearFonFyear'growth'rate'of'Chinese'total'spend'' 100%$ 90%$ 80%$ 70%$ 60%$ 50%$ 40%$ 30%$ 20%$ 10%$ 0%$ B10%$ B20%$ B30%$ B12$ DecB12$ JanB13$ FebB13$ MarB13$ AprB13$ MayB13$ JunB13$ JulB13$ AugB13$ SepB13$ OctB13$ NovB13$ DecB13$ Ja Source:$Global$Blue$AnalyEcs$

19 2012F2014:'yearFonFyear'growth'rate'of'Chinese'total'spend'' 100%$ 90%$ 80%$ New'tourism'law' 70%$ 60%$ 50%$ 40%$ 30%$ 20%$ 10%$ 0%$ B10%$ B20%$ B30%$ 13$ AprB13$ MayB13$ JunB13$ JulB13$ AugB13$ SepB13$ OctB13$ NovB13$ DecB13$ JanB14$ FebB14$ MarB14$ AprB14$ Source:$Global$Blue$AnalyEcs$

20 2012F2014:'yearFonFyear'growth'rate'of'Russian'total'spend'' 100%$ 90%$ 80%$ 70%$ 60%$ 50%$ 40%$ 30%$ 20%$ 10%$ 0%$ B10%$ B20%$ B30%$ JanB12$ FebB12$ MarB12$ AprB12$ MayB12$ JunB12$ JulB12$ AugB12$ SepB12$ OctB12$ NovB12$ DecB12$ Jan Source:$Global$Blue$AnalyEcs$

21 2012F2014:'yearFonFyear'growth'rate'of'Russian'total'spend'' 100%$ 90%$ 80%$ 70%$ 60%$ 50%$ 40%$ 30%$ 20%$ 10%$ 0%$ B10%$ B20%$ B30%$ vb12$ DecB12$ JanB13$ FebB13$ MarB13$ AprB13$ MayB13$ JunB13$ JulB13$ AugB13$ SepB13$ OctB13$ NovB13$ DecB13$ Ja Source:$Global$Blue$AnalyEcs$

22 2012F2014:'yearFonFyear'growth'rate'of'Russian'total'spend'' 100%$ 90%$ 80%$ Crimean'crisis' 70%$ 60%$ 50%$ 40%$ 30%$ 20%$ 10%$ 0%$ B10%$ B20%$ B30%$ 13$ AprB13$ MayB13$ JunB13$ JulB13$ AugB13$ SepB13$ OctB13$ NovB13$ DecB13$ JanB14$ FebB14$ MarB14$ AprB14$ Source:$Global$Blue$AnalyEcs$

23 The$Chinese$ spending$ slowdown$

24 $225$$ Chinese'outbound'travel'growth'2002F2020' Million'travellers' $200$$ $175$$ $150$$ $125$$ $100$$ $75$$ $50$$ $25$$ $B$$$$ Source:$Global$Blue$based$on$CNTA,$Xinhua,$UNWTO$

26 The$Chinese$ spending$ slowdown$ Not$related$to$outbound$travel$ New$tourism$law$ AnEBcorrupEon$storm$ Full$stop$of$official$travel$ DesEnaEon$shik$to$USA$/$Australia$ Change$in$travel$purpose$ Rise$of$FIT$/$decline$of$groups$ Impacted$W&J,$boosted$F&C$ $

27 2012F2014:'yearFonFyear'growth'rate'of'Chinese'spend'on'Watches'&'Jewellery' 140%$ 120%$ 100%$ 80%$ 60%$ 40%$ 20%$ 0%$ B20%$ B40%$ JanB12$ FebB12$ MarB12$ AprB12$ MayB12$ JunB12$ JulB12$ AugB12$ SepB12$ OctB12$ NovB12$ DecB12$ Jan Source:$Global$Blue$AnalyEcs$

28 2012F2014:'yearFonFyear'growth'rate'of'Chinese'spend'on'Watches'&'Jewellery' 140%$ 120%$ 100%$ 18th'NaMonal'Congress' 80%$ 60%$ 40%$ 20%$ 0%$ B20%$ B40%$ vb12$ DecB12$ JanB13$ FebB13$ MarB13$ AprB13$ MayB13$ JunB13$ JulB13$ AugB13$ SepB13$ OctB13$ NovB13$ DecB13$ J Source:$Global$Blue$AnalyEcs$

29 2012F2014:'yearFonFyear'growth'rate'of'Chinese'spend'on'Watches'&'Jewellery' 140%$ 120%$ 100%$ 80%$ 60%$ 40%$ 20%$ 0%$ B20%$ B40%$ 13$ AprB13$ MayB13$ JunB13$ JulB13$ AugB13$ SepB13$ OctB13$ NovB13$ DecB13$ JanB14$ FebB14$ MarB14$ AprB14$ Source:$Global$Blue$AnalyEcs$

30 The$Russian$ spending$ slowdown$

31 The$Russian$ spending$ slowdown$ Rouble$has$been$falling$for$a$year$ Russian$spending$down$8.5%$in$2014$ Economy$was$down$before$the$Crimean$crisis$ Crimean$crisis$impacts$spending,$not$travelling$ Outbound$travel$sEll$steadily$increasing$5%$ Frankfurt$and$Milan$mostly$hurt$in$March$

32 What$can$we$ expect$for$the$ future?$

33 In$2014$we$expect$stronger$tourist$arrivals$$ in$apac$(and$usa)$than$in$europe$

34 General$outbound$travel$ EuropeBbound$travel$ NaMon' 2014' 2015' 2016' NaMon' 2014' 2015' 2016' China' 13%$ 13%$ 13%$ China' 6%$ 9%$ 7%$ Russia' 9%$ 13%$ 15%$ Russia' 5%$ 7%$ 6%$ Japan' 2%$ 3%$ 3%$ Japan' 0%$ 0%$ 0%$ Indonesia' 8%$ 8%$ 9%$ Indonesia' B$NA$B$ B$NA$B$ B$NA$B$ USA' 2%$ 2%$ 2%$ USA' 2%$ 2%$ 2%$ Source:$Global$Blue$based$on$CNTA,$Xinhua,$Euromonitor,$TTG$Asia,$Jakarta$News,$Tourism$Economics,$UNWTO,$PATA,$TourMIS.$

35 Travel$growth$from$ core$markets$sell$ posieve,$with$a$ stress$on$apac$ Major$globe$ shopper$currencies$ to$strengthen$ against$eur$and$ SGD$ A$bener$economic$ outlook,$yet$with$ downside$risks$ Rise$of$middleBclass$ in$china,$but$with$ travel$ban$for$ officials$and$new$ tourism$law$

36 Globe$shoppers$are$a$demographic,$not$$ a$geography.$is$your$company$structured$to$$ harness$their$power?$

37 Thank$you.$

Euro Rates Update. 26 February % 0.9% 0.8% 2.4% 0.7% 0.6% 2.2% 0.5% 0.4% 2.0% 0.3% 0.2% 1.8% 0.1% 0.0%

Euro Rates Update. 26 February % 0.9% 0.8% 2.4% 0.7% 0.6% 2.2% 0.5% 0.4% 2.0% 0.3% 0.2% 1.8% 0.1% 0.0% FI Strategy Euro Rates Update Nordea Research, 6 February 6 US Treasury Yields Y Y Y Y.7.8.7.6 D....7 W -.6 -. -.7 -. German Benchmark Yields Y Y Y Y -. -...8 D -. -..7. W -. -.8 -.8 -. German Curve Slopes