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Retailer Payments, Banking, Insurance and Assistance in China investigates the market for financial services organised by over 230 major retail brands in China. As well as examining their initiatives in payment cards, banking products, insurance and assistance, the study also examines their involvement in proprietary and coalition loyalty programs, and details the online payment mechanisms accepted by those with an online sales capability. Among other data points, the report and PartnerBASE™ dataset that accompanies it embrace the following information about the retailers covered:

- whether they offer their own credit, debit or prepaid cards and, if so, the card issuers that they work with in this context if they do not issue the cards themselves;

- whether they are linked to one or more loyalty programs and, if so, whether these are proprietary or coalition schemes;

- whether they make non-card point-of-sale finance available to their customers and, if so, the finance providers that they employ for this purpose;

- whether they promote mainstream banking products such as general-purpose personal loans, mortgages and savings accounts and, if so, the partners that they co-operate with;

- whether they distribute accident, dental, health, household, life, motor, pet or travel insurance, or any kind of assistance services and, if so, the insurance or assistance providers used;

- for retail brands with an online sales capability, the payment means and providers that they accept for online purchases with consideration of payment cards, online accounts, mobile payments, bank transfers and other online payment options.

The report and PartnerBASE™ dataset can be used in the following ways:

- to gain access to a comprehensive source of information that provides detailed insights into the involvement of major retail brands in China in payments, banking, insurance and assistance;

- to monitor the activity of key competitors in retailer financial services including Alipay, China Rewards, ICBC, Taobao Insurance and UnionPay;

- to understand the potential in China for converting proprietary retailer loyalty cards and coalition loyalty schemes into fully-fledged payment cards;

- to evaluate the extent to which consolidation among conventional banks is opening up opportunities for new retailer banks to emerge as ‘consumer champions';

- to appreciate the range of online payment choices open to consumers in China who buy products and services through the websites of major retail groups.

Table Of Contents

Retailer Payments, Banking, Insurance and Assistance in China
Table of Contents

Executive Summary

Introduction

Market Analysis

List of Graphics / Tables



0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

What is this report about?

Rationale

In many countries, consumers are tending to gravitate to larger retailers and to buy more online...

... which throws up new opportunities in payments, banking, insurance and assistance

Methodology

Survey of retailers

The survey's scope covers over 200 important retail brands grouped across ten categories…

…with a clear majority of retailers operating a mixed distribution model

Definitions

Payment, banking, insurance and assistance products and services

Operating models

Weighted shares

PartnerBASE

Finaccord

2.0 MARKET ANALYSIS

Introduction

Retailer payment cards

Credit, debit and prepaid cards

Most retailer payment cards in China are configured as credit cards...

… with 17 card issuers active in the market in total

ICBC is likely to be the leading issuer of retailer payment cards in China

UnionPay claims the highest share of network partnerships for retailer cards

The vast majority of retailer payment card programs are concentrated in three categories...

… most notably that of supermarkets and hypermarkets

Gift cards

Well over a half of major retail brands in China have introduced stored-value gift cards...

... with even online-only retailers scoring a provision rate of 50% in this arena

Retailer loyalty programs

Over 80% of retail brands surveyed in China participate in a loyalty program of one sort or another...

... with significant activity rates apparent across all ten retailer categories

Proprietary loyalty programs

The great majority of major retailers in China run their own proprietary loyalty program

Coalition loyalty programs China Rewards was launched in 2013 as a joint venture involving three organisations...

…while the longer-established SmartClub reportedly has over 3 million active members

OK Card incorporates several features of a coalition scheme without being a true loyalty program

Consumer finance

The provision rate among major retailers for point-of-sale finance has tripled since 2010

China Merchants Bank emerges as a leader in this field in both unweighted and weighted terms...

... with nine other providers apparent, two of which are classifiable as captives

Three categories lack any retail brands with involvement in non-card consumer finance

Banking products

Overview

Half a dozen major retail brands in China offer general-purpose personal loans to their customers…

Personal loans, mortgages and savings accounts

… with all six relying upon captive partners in this context

China Resources Bank acts as a captive provider for three retail brands belonging to its own parent

International payments / remittances

Western Union is used as partner by two of the retail chains researched in China

Insurance and assistance

14 Chinese retail brands promote insurance products to their customers...

... with a variety of operating models in evidence

By weighted share of partnerships, Taobao Insurance is the most prominent provider...

... having set up a platform in 2010 to sell insurance to both consumers and small businesses

In this context, both Aegon-CNOOC and Manulife-Sinochem are classifiable as joint ventures

Retailers in five categories are involved in this sphere

Online payments

Acceptance rates

Online accounts are accepted by nearly as many retail brands as accept payment cards online

Payment cards

The dominance of UnionPay pushes international payment card brands to the margin

Five retailer categories in China register online acceptance rates for payment cards above 80%

Online accounts Alibaba's Alipay service is the leading online payment account provider by a substantial margin…

…albeit Tenpay has built a substantial customer base within a short period of time...

... and 99bill is another significant competitor which limits the growth potential for PayPal

All online retailer categories accept online accounts for payments via the internet

Mobile payments

Bank transfers

Direct bank transfers register significant acceptance rates among major online retailers in China

Other methods of online payment

A clear majority of online retail brands in China also accept payments on delivery (COD)

3.0 APPENDIX

Major captives and joint ventures




LIST OF GRAPHICS / TABLES


0.0 EXECUTIVE SUMMARY

Provision rates for key payment, banking, insurance and assistance products, adherence rates for loyalty schemes and online payment product acceptance rates among retailers in China, 2014

1.0 INTRODUCTION

Retailers researched in China, segmented by category, 2014

Retailers researched in China segmented by distribution model, 2014

2.0 MARKET ANALYSIS

Provision of retailer payment cards by type of card in China, 2014

Retailer payment cards in China: provision rate and operating models, 2014

Retailer payment cards in China: unweighted and weighted issuer share of partnerships, 2014

Retailer payment cards in China: unweighted and weighted network share of partnerships, 2014

Provision of retailer payment cards by retailer category and distribution model in China, 2014

Provision of retailer gift cards by retailer category and distribution model in China, 2014

Retailer loyalty programs in China: provision rates, program types and links to payment and other cards, 2014

Provision of or involvement in loyalty programs by retailer category and distribution model in China, 2014

Coalition loyalty programs in China: unweighted share of retailer brand members, 2014

Retailer consumer finance in China: provision rate and operating models, 2014

Retailer consumer finance in China: unweighted and weighted provider share of partnerships, 2014

Provision of retailer consumer finance by retailer category and distribution model in China, 2014

Retailer provision of other banking products and services in China, 2014

Retailer personal loans, mortgages and savings accounts in China: provision and operating models, 2014

Retailer personal loans, mortgages and savings accounts in China: unweighted and weighted provider share of partnerships, 2014

Provision of personal loans, mortgages and savings accounts by retailer category and distribution model in China, 2014

Retailer international payments / remittances in China: provision rate and operating models, 2014

Provision of international payments / remittances by retailer category and distribution model in China, 2014

Retailer insurance and assistance in China: provision by policy type, 2014

Retailer insurance and assistance in China: provision and operating models, 2014

Retailer insurance and assistance in China: unweighted and weighted provider share of partnerships, 2014

Retailer online payment acceptance in China: acceptance rates by payment type, 2014

Payment cards accepted as an online payment mechanism by retailers in China: unweighted and weighted network share of acceptance, 2014

Acceptance of payment cards as an online payment mechanism by retailer category in China, 2014

Online accounts accepted as an online payment mechanism by retailers in China: unweighted and weighted provider share of acceptance, 2014

Acceptance of online accounts as an online payment mechanism by retailer category in China, 2014

Mobile payment services accepted as an online payment mechanism by retailers in China: unweighted and weighted provider share of acceptance, 2014

Acceptance of mobile payments as an online payment mechanism by retailer category in China, 2014

Acceptance of direct bank transfers as an online payment mechanism by retailer category in China, 2014

Acceptance of other types of online payment mechanisms by retailer category in China, 2014

3.0 APPENDIX

Retailer captives and joint ventures in payments, banking, insurance and assistance in China: operating models, partners and ownership, 2014

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