ProsperChina™ Q1 2011 Quarterly Report of 19,000+ Chinese Consumers

Prosper understands

consumers around the world.

The ProsperChina™ Quarterly provides insights on over 19,000 Chinese consumers between the ages of 18 and 54, with a primary focus on upwardly mobile 18-34 year old consumers. This

segment represents an estimated population of 360 million, with 184 million being men. This group of digitally connected consumers is a large market for luxury brands with a high potential for sales in other markets. The 23rd series of the ProsperChina™ Quarterly reveals how the financial outlook, lifestyle, and media consumption of these young Chinese consumers compares to that of American

consumers of the same age group.

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ProsperChina™ Quarterly

http://www.bigresearch.com/

About the ProsperChina™ Quarterly:

• Introduction:– ProsperChina™ market intelligence provides unique consumer insights that are gathered online utilizing large sample

sizes. The ProsperChina™ Quarterly Surveys monitor the pulse of more than 19,000 Chinese consumers ages 18-54. The surveys are conducted online and they cover purchase behaviors, brand preferences, purchase intentions, media consumption, simultaneous media usage, and media influence on purchases. The data is available with its own Excel based software that allows for unlimited cross-tabs.

• This report is derived from the following ProsperChina™ and BIGresearch® Surveys:– ProsperChina™ Quarterly Survey 15: 1st Quarter, 2009 (N=7,326)– ProsperChina™ Quarterly Survey 16: 2nd Quarter, 2009 (N=12,056)– ProsperChina™ Quarterly Survey 17: 3rd Quarter, 2009 (N=15,168)– ProsperChina™ Quarterly Survey 18: 4th Quarter, 2009 (N= 16,582)– ProsperChina™ Quarterly Survey 19: 1st Quarter, 2010 (N=16,915)– ProsperChina™ Quarterly Survey 20: 2nd Quarter, 2010 (N=18,089)– ProsperChina™ Quarterly Survey 21: 3rd Quarter, 2010 (N=26,059)– ProsperChina™ Quarterly Survey 22: 4th Quarter, 2010 (N=19,402)– ProsperChina™ Quarterly Survey 23: 1st Quarter, 2011 (N=19,051)– BIGresearch® Simultaneous Media Usage Survey®, SIMM® 17: December 2010 (N=24,754)– BIGresearch® Consumer Intentions & Actions® (CIA®) Survey: March 2011 (N=8,491)

• Cross-tabs utilized in this report (unless otherwise noted):– 18-34 Chinese Consumers: 18-34 year old respondents to the ProsperChina™ Quarterly surveys. – 35-54 Chinese Consumers: 35-54 year old respondents to the ProsperChina™ Quarterly surveys. – 18-34 American Consumers: 18-34 year old American consumers responding to the BIGresearch® CIA and/or SIMM17

surveys.

ProsperChina™ Quarterly:

+ =

Consumers are like a puzzle…complex and fragmented… Prosper brings the pieces together.

Prosper

Flash Overview:

• Chinese Consumer Confidence:

– Confidence in the economy among 18-34 Chinese consumers improves 8.3% quarter-over-quarter.

• Employment Environment:

– In Q1 2011 the employment outlook also improves with fewer 18-34 Chinese Consumers anticipating more layoffs than at present over the next six months.

• Consumer Finances:

– With the improvement in economic confidence, confidence in personal financial situations improves quarter-over-quarter as well.

• Practicality:

– While over half of 18-34 Chinese Consumers remain practical in their purchases, practicality is down both quarter-over-quarter and year-over-year.

• Auto Market:

– Of those planning to buy a new car/truck within the next six months, Audi, Volkswagen, BMW, Buick and Honda are top brands being considered.

• Simultaneous Media Usage:

– Being avid users of media, young Chinese Consumers are likely to use multiple forms of media at a time.

• Influence to Purchase:

– Media influence is key to increasing ROI in China. Key differences exist when it comes to influencing Chinese and American electronics and grocery purchases. Sources: ProsperChina™ Quarterly Survey Q1 2011

Consumer Confidence:

• Quarter-over-quarter, confidence in the economy among 18-34 year old Chinese Consumers improves 8.3% with 62.2% indicating they are confident/very confident in chances for a strong economy in the next 6 months vs. 57.4% in Q4 2010.

• Year-over-year, however, confidence is down 7%. Despite this decline, 18-34 Chinese Consumers remain more confident than their 18-34 American counterparts as only 40.6% are confident or very confident in the chances for a strong U.S. economy.

No confidence

Little confidence

Confident

Very confident

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

7.5%

25.6%

46.6%

20.2%

14.2%

28.4%

40.6%

16.8%

11.1%

26.7%

44.3%

17.9%

How confident are you in the chances for a strong Chinese economy in the next 6 months? 18-34 Chinese Consumers

Q1 2011 Q4 2010 Q1 2010

Sources: ProsperChina™ Quarterly Survey Q1 2010, Q4 2010, Q1 2011BIGresearch® CIA® Survey, March 2011

Stock Market:

• Though up slightly quarter-over-quarter, confidence in the Chinese stock market is down year-over-year.

• Quarter-over-quarter, the percentage of 18-34 Chinese Consumers who are confident/very confident in the stock market is up 1.7%. Year-over-year, the decline is 8.1%

Sources: ProsperChina™ Quarterly Surveys Q1 2009 – Q1 2011

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 20110.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Would you invest in the Chinese Stock Market?18-34 Chinese Consumers

Definitely/Probably Invest (Confident or Very Confident)

Definitely/Probably Not Invest (Little or No Confidence)

I don't invest in the stock market at all

Employment Outlook:

• Quarter-over-quarter the employment outlook improves, with fewer 18-34 Chinese Consumers (31.5% vs. 37.5% in Q4 2010) anticipating more layoffs over the next six months than at present.

• Year-over-year, however, the employment outlook is more dismal, as only 24.6% were anticipating more layoffs in Q1 2010.

– One issue contributing to the fluctuating employment outlook are new college graduates who are chasing too few jobs. This group, dubbed “Ants” represent the vast pool of educated Chinese youth whose academic qualifications don’t match up with what the job market needs. Competition is so fierce that 30% of graduates of prestigious universities, in fields such as medicine, engineering and management are ready to work for very low salaries.*

• In the U.S. 26.1% are anticipating more layoffs than at present in the next 6 months.

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 20110.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Regarding the Chinese employment environment, over the next six (6) months, do you think there will be more, the same or fewer layoffs than at present?

18-34 Chinese Consumers

More Same Fewer

Sources: ProsperChina™ Quarterly Surveys Q1 2009 – Q1 2011BIGresearch® CIA® Survey, March 2011

Sources: Sinha, Kunal. “Chinese ‘Ants’ Struggle to Find Work.” 26 January 2011.

Consumer Finances:

• With the quarter-over-quarter improvement in consumer confidence, confidence in personal financial situations improves quarter-over-quarter as well.

• In Q1 2011, 12.6% indicate they are “worse off” financially compared to last year, down from the 16.9% who said the same in Q4 2010. 38.7%, up from 37.2% in Q4 feel they are “better off” in Q1 2011 compared to this time last year. 48.8% feel their financial strength is the same as last year.

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 20110.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

42.6% 39.9% 41.0%37.2% 38.7%

46.1% 46.2% 45.1% 45.9%48.8%

11.3% 13.9% 13.9% 16.9% 12.6%

Regarding your personal financial situation, compared to this time last year are you… (18-34 Chinese Consumers)

Better Off Same Worse Off Linear (Worse Off)Linear (Worse Off)


Consumer Savings:

• Perhaps reflected in their overall more positive feelings toward their personal financial situations, a greater percentage of 18-34 Chinese Consumers are planning to save more than they did last year.

• However, the majority does not agree that they are saving enough to meet their future needs.

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Overall, do you plan to save more, the same or less than you did last year?


More Same Less Not Sure

How do you feel about this statement: “I am saving enough

to meet my future needs.”

Strongly Agree: 6.1%

Agree: 18.9%

Uncertain: 27.9%

Disagree: 29.3%

Strongly Disagree: 17.9%


Consumer Lifestyle Changes:

• While over half of 18-34 Chinese Consumers remain focused on practicality in Q1 2011, focus on practicality in purchasing is down both quarter-over-quarter and year-over-year.

• Though 18-34 Chinese Consumers are more focused on practicality in purchasing than their American counterparts, they are less focused on needs over wants and are less budget conscious.

• Though down slightly quarter-over-quarter, more than 4 in 10 18-34 Chinese Consumers indicate they have become more conscious about food safety.

In the last 6 months, have you made any of the following changes?


18-34 American Consumers

Q1 2010

Q4 2010

Q1 2011

March 2011 CIA

I have become more practical and realistic in my purchases 59.4% 58.6% 55.2% 45.7%

I have become less practical and more impulsive in my purchases 8.6% 10.4% 10.6% 6.0%

I focus more on what I need rather than on what I want 41.9% 40.4% 36.8% 49.3%

I have become more conscious about food safety 42.2% 44.0% 42.7% 14.2%

I am spending more time and money on decorating my home 12.3% 13.7% 13.5% 8.3%

I have become more budget conscious 38.4% 36.5% 35.4% 39.8%

I am spending more time with my family 27.9% 25.5% 25.8% 23.4%

I have become more environmentally responsible in my daily life 35.5% 32.9% 30.6% 12.2%

I am eating home cooked meals more often 25.8% 26.4% 24.3% 35.4%

I have not made any changes 6.8% 7.4% 7.6% 10.5%

Sources: ProsperChina™ Quarterly Surveys Q1 2010, Q4 2010 & Q1 2011BIGresearch® CIA® Survey, March 2011

90 Day Outlook:

• According to the Diffusion Index (those planning to spend less in the next 90 days subtracted from those planning to spend more), the outlook for most retail categories declines both quarter-over-quarter and year-over-year.

• Quarter-over-quarter, the outlook for Sporting Goods, CDs/DVDs/Videos/Books, Groceries and Lawn and Garden Supplies is up. Year-over-year, the spending outlook is up in Children‘s Clothing, Women's’ Dress and Casual Clothing, Toys, Electronics and Linens/Bedding.

Over the next 90 days do you plan on spending more, the same or less on the following items than you would normally spend at this time of the year? DIFFUSION INDEX

18-34 Chinese ConsumersCategory: Q1 ‘10 Q4 ‘10 Q1 ‘11 Category: Q1 ‘10 Q4 ‘10 Q1 ‘11

Children's Clothing 18.8 34.0 28.6 Toys -14.7 -6.6 -9.6

Women's Dress Clothing 7.0 10.9 9.3 Electronics -11.0 -10.1 -10.8

Women's Casual Clothing 1.1 2.1 1.8 CDs/DVDs/Videos/Books -9.0 -13.4 -12.6

Men's Dress Clothing -6.6 -2.4 -6.9 Groceries -1.9 2.3 -2.1

Men's Casual Clothing -1.2 0.9 -1.3 Home Improvement/ Hardware -19.6 -19.4 -20.1

Shoes 6.1 8.5 5.0 Lawn and Garden Supplies -26.7 -24.9 -24.4

Health and Beauty Aids -0.5 -2.1 -2.3 Home Furniture -14.9 -14.5 -16.4

Going out to eat -9.3 -11.2 -13.3 Decorative Home Furnishings -15.2 -14.8 -16.0

Sporting Goods -23.3 -24.7 -23.8 Linens/Bedding/Draperies -12.4 -9.2 -11.3

Sources: ProsperChina™ Quarterly Surveys Q1 2010, Q4 2010 & Q1 2011

Apparel Purchases:

• Rising steadily over the past two years, more than 1 in 4 18-34 Chinese Consumers indicates newest trends and styles are important to them when it comes to fashion.

• 2 in 3 young Chinese Consumers also say that familiar labels are important to them when buying clothing.• However, the majority (56.8%) say they usually buy clothing when it’s on sale, suggesting that young

Chinese Consumers look for the right brands, and the right bargains.– China, however, is expected to surpass the U.S. to become the world’s second largest consumer of luxury goods in the coming

decade, and perhaps within the next five years.*

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Check the statement that best applies to your feelings about fashion. 18-34 Chinese Consumers

Newest trends and style are important to meI prefer a traditional, conservative lookFashion is less important than value and comfort to me

66.7% of 18-34 Chinese Consumers say familiar labels

are important to them when buying clothing.

Clothing Shopping Strategy:18-34 Chinese Consumers

“Sales are not important to me when I buy clothing.” – 37.3%

“I usually buy clothing when it’s on sale.” – 56.8%

“I only buy clothing when it’s on sale.” – 5.9%

Sources: ProsperChina™ Quarterly Surveys Q1 2009 – Q1 2011 Source: Reuter, Chloe. “Five Tips for Luxury Marketers in China.” Advertising Age. 26 January 2011.

Chinese Auto Market:

• Car ownership among 18-34 Chinese Consumers has been on the rise in recent years, and is up 16.3% year-over-year.

– In 2010, auto sales in China hit a global record. Up 32.3% to 18.06 million vehicles, China was the world’s biggest market for auto sales, including passenger cars, trucks and buses according to the China Association of Automobile Manufacturers. These stats far outstrip the 11.5 million vehicles sold in the U.S. for the second consecutive year. Analysts note, however, that China will probably record the first negative year-on-year auto sales growth in 20 years in 2011 due to ending tax and subsidy policies that will heavily impact sales of small cars.*

• Among 18-34 Chinese Car Owners in Q1 2011, 28.5% indicate they drive a Chinese vehicle most often, while 30.6% drive European models and 17.3% drive U.S. models.

Q1 '09

Q2 '09

Q3 '09

Q4 '09

Q1 '10

Q2 '10

Q3 '10

Q4 '10

Q1 '11

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Do you own a car?18-34 Chinese Consumers

Yes No

What is the make of the car, truck or SUV you drive most often?18-34 Chinese Car Owners Q1 2011

Chinese: 28.5%

Japanese: 16.6%

European: 30.6%

Korean: 5.1%

American: 17.3%


*Source: Madden, Normandy. “China Auto Sales Hit Global Record in 2010.” Ad Age China. 12 January 2011.


• In Q1 2011, the percentage of 18-34 Chinese Consumers planning to buy/lease a car or truck within the next 6 months rose slightly, up 5.2% quarter-over-quarter though down by 4.9% year-over-year. • After hitting a record high in December 2010 as buyers flocked to cash in on expiring tax incentives, auto sales in China saw their

slowest growth rate in two years in February 2011. In March 2011, auto sales rebounded slightly but still lagged far below the year-earlier pace. The China Association for Automobile Manufacturers said that sales rose 5.4% from 2010 in March, noting that the growth rate contracted by 50 percentage points compared with a year earlier. Several factors, including a surge in oil prices, the withdrawal of government incentives and the Japanese earthquake's impact on vehicle production contributed to the slower growth.*

• Of 18-34 Chinese Consumers planning to buy/lease in the next 6 months, the top five brands being considered are Audi (11.2%), Volkswagen (7.9%), BMW (7.1%), Buick (6.4%) and Honda (6.3%).

Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '110.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Are you planning on buying/leasing a car/truck within the next 6 months? 18-34 Chinese Consumers

Yes No, I bought/leased within the last six months No

What brand of vehicle are you considering? TOP FIVE Q1 201118-34 Chinese Consumers Planning to Buy/Lease in the Next 6 Months

Audi: 11.2%

Volkswagen: 7.9%

BMW: 7.1%

Buick: 6.4%

Honda: 6.3%


*Source: Madden, Normandy. “China Auto Sales Hit Global Record in 2010.” Ad Age China. 12 January 2011.Zhang, Yajun. “Auto Sales Climb in China.” The Wall Street Journal. 11 April 2011.


• Of 18-34 Chinese Consumers who’ve purchased a vehicle in the past 6 months, top reasons include wanting a vehicle with better safety features (22.6%), wanting a vehicle with better gas mileage (20.6%), needing another car for their family (20.6%), liking the style of the new models (20.2%) and seeing financing deals/incentives that were too good to pass up (19.6%).

Which of the following motivated you to get a new vehicle?18-34 Chinese Consumers Who Purchased a Vehicle in the Past 6 Months

Q1 2011

Financing deals/incentives were too good to pass up 19.6%My lease was up 11.1%My old car had high mileage 15.7%My old car was always in the repair shop 14.6%I was tired of my old car, I wanted something new 18.5%I wanted a vehicle with new 'tech toys' (GPS, DVD, etc.) 17.1%I wanted a vehicle with better gas mileage 20.6%I wanted a vehicle with better safety features 22.6%I like the style of the new models 20.2%My significant other wanted a new car 12.3%Needed another car for my family 20.6%My old car 'died' 6.9%Needed more room 7.4%Other 6.9%

Source: ProsperChina™ Quarterly Survey Q1 2011

Mobile Market:

• 94.7% of 18-34 Chinese Consumers have a cell phone, and of the small percentage that do not, over half are planning to buy one.

• Despite the high percentage of cell phone ownership, approximately 4 in 10 18-34 Chinese Consumers are planning on buying a new cell phone in the next 90 days. Of those planning to buy, caller ID, address books, cameras, blue tooth capabilities and calendars are important features to look for in a new cell phone.

– Internet/Web Access is also a top feature that is looked for in a new phone among 18-34 Chinese Consumers. In China, more consumers own mobile phones than PCs, quickly making cell phones the primary Internet connection tool in China. With Internet usage growing, the cell phone, not the PC, is the new computer in China.*

Yes No0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

47.5%52.5%

43.1%

56.9%

41.5%

58.5%

Are you planning on buying a new cell phone in the next 90 days?

Q1 2010 Q4 2010 Q1 2011

Streaming videoColor screen

CalculatorText messaging

Internet/Web AccessCalendar

Blue toothCamera-enabled

Address bookCaller ID

50.0% 55.0% 60.0% 65.0% 70.0% 75.0%

60.2%65.1%65.8%66.3%66.6%

68.2%68.7%69.0%

70.8%72.2%

What features or attributes do you need in a cell phone? TOP TEN Q1 2011

18-34 Chinese Consumers Planning to Buy Cell Phone in Next 90 Days

*Source: Sagami, Tony. “One Company That Should Rake in 4G Cell Phone Profits.” Uncommon Wisdom. 5, January 2011 Sources: ProsperChina™ Quarterly Survey Q1 2010, Q4 2010 & Q1 2011

Mobile Devices:

• More than 9 in 10 18-34 Chinese Consumers regularly or occasionally use cell phones, compared to 81.4% of 18-34 American Consumers.

• Looking at specific types of smartphones, 1 in 3 18-34 Chinese Consumers regularly or occasionally uses an iPhone or Droid/Android phone, while 28.3% uses a BlackBerry and 23.3% uses a Palm Pre.

• 1 in 4 also regularly or occasionally use eReaders such as the Kindle and Sony Reader, while 3 in 10 use an iPad.

Do you use any of the following? Regularly or Occasionally



BlackBerry 28.3% 30.0%Cell Phone 94.5% 81.4%Droid/Android Phone 34.2% 29.4%iPhone 34.7% 30.5%iPad 29.9% 20.6%iPod 29.5% 55.2%Kindle 23.2% 17.9%MP3 Player 76.1% 52.9%Palm Pre 23.3% 15.4%PDA 28.2% 16.6%Sony Reader 25.5% 15.7%Web Radio 48.3% 43.5%

BIGresearch® SIMM® Survey, December 2010

Sources: ProsperChina™ Quarterly Survey, Q1 2011

Mobile Devices:

• 18-34 Chinese Consumers are more likely to regularly or occasionally take pictures/video, send text messages and view news, sports and video/TV on their cell phones than 18-34 American Consumers.

• More than 9 in 10 young Chinese Consumers regularly or occasionally instant message online and send text messages via their cell phones, suggesting these communication methods are widely used among young consumers in China.

Do you do any of the following? Regularly or Occasionally



Instant Messaging Online 96.8% 76.7%Take Picture/Video on Cell Phone 90.8% 84.4%Text Messaging on Cell Phone 94.7% 86.5%Video Gaming 62.0% 77.8%View News on Cell Phone 82.6% 49.9%View News Online 87.7% 74.3%View Sports on Cell Phone 51.2% 38.6%View Sports Online 67.6% 52.9%View Video/TV on Cell Phone 52.2% 45.9%View Video/TV Online 81.2% 73.8%



Purchase Deferrals:

Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '1115.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Over the last 30 days, have you put off or deferred purchases in any of the following areas? 18-34 Chinese Consumers

Apparel Electronics Entertainment Vacation Going Out to Eat Home Improvement


• The decline in practicality in purchasing among 18-34 Chinese Consumers is evident when looking at purchase deferrals. Quarter-over-quarter, fewer young Chinese Consumers are putting off apparel, dining out, electronics, and vacation purchases.

• However, purchase deferrals are up slightly for Entertainment and Home Improvement purchases, suggesting these may be areas where 18-34 Chinese Consumers maintain their practical focus.

Vacation Travel:

Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '110.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Do you plan to take a vacation trip in the next 6 months?

Yes No

• The number of 18-34 Chinese Consumers planning to take a vacation trip in the next 6 months is up quarter-over-quarter, with 82.1% of young Chinese Consumers planning to take a trip in the next 6 months.

• Further, 36.2% of 18-34 Chinese Consumers regularly take vacation trips, traveling 2 or more times a year. Another 54.7% occasionally (once a year or less often) take vacation trips.

• It is estimated that China will become the world’s largest inbound and outbound tourist market within five to seven years, with 54 million Chinese traveling abroad and China receiving 53 million foreign visitors in 2010. According to the China Tourism Academy, China will become the largest source of international tourists, with 100-130 million visitors traveling to foreign countries where they will spend an estimated $150 billion.*

How often to you take vacation trips?

18-34 Chinese ConsumersQ1 2011

Regularly (2 or more times a year): 36.2%

Occasionally (Once a year or less): 54.7%

Never: 9.1%


*Source: Madden, Normandy. “China Will Become No. 1 Tourist Market Within Seven Years.” Ad Age China. 26 January 2011.

Online Research:

Regularly Occasionally Never0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%54.8%

40.2%

4.9%

48.7% 45.9%

5.3%

How often do you research products online be-fore purchasing them in person or in store?

18-34 Chinese Consumers 18-34 American Consumers

75.4% of 18-34 Chinese Consumers use Baidu.com most often when searching

online

Top Five Products Researched Online in the last 90 Days Before Being

Purchased In-Store 18-34 Chinese Consumers

1. Apparel: 52.1%2. Shoes: 34.2%

3. Electronics: 34.0%4. Appliances: 32.0%

5. Beauty Care & Cosmetics: 31.2%

• 54.8% of 18-34 Chinese Consumers indicate they regularly research products online before purchasing them in person in a store, compared to 48.7% of American Consumers the same age.

• 3 in 4 18-34 Chinese Consumers use Baidu.com most often when searching online and are likely to be doing so from their mobile phone, which for many Chinese Consumers serves as their primary access to the Internet.

• The product categories that are most likely to be researched online prior to being purchased in store are Apparel, Shoes, Electronics, Appliances and Beauty Care & Cosmetics.



Online Shopping:

• In addition to researching products online, 18-34 Chinese Consumers are likely to make online purchases, with 94.9% indicating they regularly or occasionally do so.

• When it comes to shopping online, 57.4% say that an easy to use website is very important when shopping online.

• Flexible return policies (56.9%), low prices (46.7%) and free shipping (46.8%) are also very important to 18-34 Chinese Consumers when shopping online.

• The ability to pick up or return their purchases in store is also important to 3 in 10 young Chinese Consumers.

How important are the following services when shopping online?

1 - Not At All Important 2 3 4

5 - Very Important Average

Website easy to use 3.7% 5.2% 11.4% 22.4% 57.4% 4.2Flexible return policy 3.9% 7.9% 11.2% 20.1% 56.9% 4.2Low Prices 4.1% 6.5% 17.1% 25.6% 46.7% 4.0Free shipping 4.9% 8.1% 18.5% 21.8% 46.8% 4.0Toll free "live" customer service person 7.5% 11.4% 21.1% 22.4% 37.5% 3.7Pick up or return at store 9.1% 13.2% 25.9% 21.8% 29.9% 3.5Ability to choose language preference 17.6% 13.1% 19.1% 15.5% 34.7% 3.4

Sources: ProsperChina™ Quarterly Survey Q1 2011

Simultaneous Media Usage:

• As in the United States, simultaneous media usage is prevalent in China, making it essential to have a consumer integrated strategy when targeting young Chinese Consumers.

• When reading magazines, both 18-34 Chinese Consumers and 18-34 American Consumers are likely to listen to the radio and watch TV.

• When watching TV, young Chinese Consumers are more likely than young Americans to be listening to the radio, reading magazines or reading the newspaper.

Regular or Occasional Simultaneous Media Usage

18-34 Chinese

Consumers18-34 American

ConsumersWhen you read magazines, do you simultaneously…Listen to the radio? 59.9% 52.5%Watch TV? 64.2% 63.6%Go online? 63.0% 48.7%

Engage in other activities? 60.4% 52.5%When you watch TV, do you simultaneously…Listen to the radio? 44.7% 37.3%Go online? 68.1% 84.6%Read magazines? 58.8% 54.7%Read the newspaper? 60.0% 46.6%Read the mail? 52.5% 60.9%Engage in other activities? 62.9% 73.7%*Question asked as: "When you […], do you simultaneously…" (Regularly, Occasionally, Never)



Media Influence:

• Media influence is key to increasing advertising ROI in China as the country is one of the toughest places for foreign brands to succeed. Successful marketers must understand that media influence varies by both the target consumer and the retail category.

– For 18-34 Chinese Consumers, Electronics purchases are influenced by TV/Broadcasts (28.2%), coupons (22.6%) and reading an article on a product (21.9%), while in store promotion (45.6%) and word of mouth (44.6%) are most likely to influence these purchases among 18-34 American Consumers.

– TV Broadcasts (26.5%) are most likely to influence grocery purchases among 18-34 Chinese Consumers, while coupons (57.5%) are most likely to do so among 18-34 American consumers.

Top Ten Media Influences on Electronics & Grocery PurchasesElectronics Groceries

18-34 Chinese Consumers18-34 American

Consumers 18-34 Chinese Consumers18-34 American

Consumers

TV Broadcast 28.2% In store Promotion 45.6% TV Broadcast 26.5% Coupons 57.5%

Coupons 22.6% Word of Mouth 44.6% Word of Mouth 26.3% In store Promotion 40.6%

Read Article on Product 21.9% Internet Advertising 36.8% In store promotion 23.4% Word of Mouth 36.3%

In store promotion 21.2% TV/Broadcast 33.8% Coupons 21.9% Direct Mail 26.7%

Word of Mouth 21.1% Read Article on Product 33.8% Cable 15.0% TV/Broadcast 26.2%

Cable 20.2% Coupons 33.0% Read Article on Product 14.6% Advertising Inserts 23.4%

Internet Advertising 15.1% Email Advertising 32.9% Direct Mail 14.2% Newspaper 22.4%

Advertising Inserts 12.2% Direct Mail 30.1% Instant Messaging 11.4% Cable 20.4%

Outdoor Billboards 11.9% Radio 29.8% Internet Advertising 11.1%Read Article on Product 18.3%

Instant Messaging 11.3% Cable 29.1% Advertising Inserts 10.0% Magazines 18.0%*Question asked as: "For each of the following retail categories, please tell us which of the following media influences your purchases. (Please check all that apply)."



China Market Overview: 18-34 vs. 35-54 year olds

• 62.2% of 18-34 year olds are confident/very confident in the chances for a strong Chinese economy in the next six months, vs. 60.8% of 35-54 year olds.

• 56.2% of 18-34 year olds are confident/very confident in the stock market indicating they would definitely/probably invest vs. 64.3% of 35-54 year olds.

• 31.5% of 18-34 Chinese Consumers fear more layoffs than at present over the next 6 months vs. 30.4% of 35-54 year olds.

• 38.7% of 18-34 year olds indicate they are “better off” this year compared to last year when it comes to their personal finances vs. 28.9% of 35-54 year olds.

• 55.2% of 18-34 consumers are being more practical and realistic in their purchases vs. 53.7% of those 35-54.

• 30.6% of 18-34 consumers are focused on being more environmentally responsible in their daily lives compared to 40.8% of 35-54 year olds.


China Market Overview: 18-34 vs. 35-54 year olds

• 22.3% of 18-34 vs. 28.5% of 35-54 consumers are planning on buying/leasing a car/truck within the next 6 months.

• 37.3% of young Chinese consumers indicate sales are not important when buying clothing vs. 36.6% of 35-54 year olds.

• 26.1% of 18-34 year olds say the newest trends and styles are important to them when it comes to fashion vs. 21.9% of those 35-54.

• 41.5% of 18-34 year olds are planning on buying a new cell phone in the next 90 days, compared to 47.4% of those 35-54.

• 15.4% of 18-34 year olds shop at Walmart most often for groceries vs. 12.6% of 35-54 year olds.


About ProsperChina™ & BIGresearch®:

Disclaimer of Warranties:ProsperChina™ is a trademark of Prosper Business Development Corp. Services are delivered by Prosper and/or a Prosper affiliated company (“Prosper”). Prosper makes no warranties, either expressed or implied, concerning: data gathered or obtained from any source; the present or future methodology employed in producing ProsperChina™ statistics; or the ProsperChina™ data and estimates represent only the opinion of Prosper and reliance thereon and use thereof shall be at the user’s own risk.

ProsperChina™ market intelligence provides unique consumer insights through online surveys. The ProsperChina™ Quarterly monitors the purchasing behavior and media consumption of more than 19,000 Chinese consumers ages 18-54, with a primary focus on 18-34 year olds. The recently expanded ProsperChina™ Quarterly includes more detail and greater insights on shopping habits and media consumption. The ProsperChina™ Quarterly is available in report or database format.

The BIGresearch® U.S. studies include the monthly Consumer Intentions and Actions® (CIA®) Survey which monitors the pulse of more than 8,000 consumers. The CIA® delivers fresh, demand-based information on where the retail consumer is shopping and their changing behavior. Unlike indicators based on past performance, this data brings intelligence on where the retail consumer is going, their intentions and actions. BIGresearch® also conducts the Simultaneous Media Survey® (SIMM®) which monitors over 15,000 consumers twice a year. The BIGresearch® methodology provides the most accurate consumer information in the industry. Complimentary findings are available at www.bigresearch.com

http://www.bigresearch.com/