。1Equities ● Consumer and TechFebruary 2019Checking in on luxury consumption in ChinaLast March, we launched our first-ever luxury consumptionsurvey, interviewing wealthy Chinese consumers. We check in ayear later to see if things have changed. We surveyed over 2,000wealthy Chinese consumers around Chinese New Year and askedthem 50 questions. We focused on millennials aged 18-34 (57% ofrespondents), as they are the generation most likely to driveluxury consumption in the future, and on women (57% ofrespondents). Our respondents’ annual income exceededRMB150,000, and we split the results between Tier-1 and other tiercities (close to a 50-50 split).What’s in the reportAfter similar premium surveys in both the US (US Holiday Deluxe, 3 Dec 2018) and China (ChinaDeluxe, 7 Mar 2018); and broader consumer surveys in Poland (23 Jan 2019), the UK (16 Jan2019), Turkey (10 Jan 2019), Russia (27 Nov 2018), Mexico (26 Nov 2018), Brazil (13 Apr 2018),the UK (13 Dec 2017), the US (18 Jan 2018), and China (3 Nov 2017), we check in with ourwealthier Chinese consumers. We ask about their appetite for luxury goods, tech, sportswear,luggage, cosmetics, travel, internet, and beverages. We survey their expectations for theeconomy in the Year of the Pig, attitudes towards ESG, and the implications their preferenceshave on broader themes for these sectors. We compare the results to our China Deluxe surveyfrom March 2018 and our US Holiday Deluxe survey from December. While c2,200 respondentsare not enough to form a representative view of the entire population, the results do supportthemes we have been developing. See page 6 for more details about our survey demographics. Not afraid: Consumption should be up across multiple categories, including luxury, beverages,and tech, supporting our theory that domestic economy should stay strong despite negativeheadlines and external pressures.“Premiumization”: Quality, high-end brands matter to our respondents across categories, andthey are willing to spend to get them. Our data in luxury, cosmetics, luggage, and sportinggoods supports this trend towards premiumization.The pandas are staying close to home: An appetite for western brands does not necessarilytranslate into traveling to the west, consistent with our theme of the repatriation of growth. Toptravel destinations were places near China, and most of our respondents were only planning togo abroad once or twice this year. Executive summaryEquities ● Consumer and TechFebruary 20192Links to previous HSBC surveysFor over two years, HSBC has teamed up with Toluna to survey consumers around the world.Feel free to reach out to our analysts to discuss these surveys and what they mean for stocks.“Deluxe” surveys focusing on luxury and premium goods:US Holiday Deluxe - Anatomy of the US luxury consumer, 3 December 2018In December 2018, US consumers were not prioritizing luxury as much as Chinese consumerswere, despite a positive outlook for the next year.China Deluxe - Anatomy of the future luxury consumer, 7 March 2018In March 2018, we learned that the Year of the Dog would be strong for luxury consumptionfrom the Chinese.“Anatomy of the Consumer” surveys focusing on general consumer and retail trends:Poland: Anatomy of the Consumer – Optimism peppered with caution, 23 January 2019In January 2019, Polish consumers were feeling optimistic about the economy, though theiroptimism is tempered by concerns about rising living costs and inflation. UK: Anatomy of the Consumer – Evolution of issues, 16 January 2019In January 2019, UK consumers expressed their concern about the rising cost of living andBrexit, and their behavior shows they are concerned, despite rising real incomes.Turkey: Anatomy of the Consumer – A difficult year, 10 January 2019In January 2019, Turkish consumers were feeling pessimistic about 2019 and concerned aboutmoney in the face of slowing economic growth. Russia: Anatomy of the Consumer – Feeling the pinch , 27 November 2018In November 2018, we learned how Russian consumers are feeling in the context of VladimirPutin’s “May Decree”, with pessimists outweighing optimists.Mexico: Anatomy of the Consumer – What do Mexican consumers want, 26 November 2018In November 2018, Mexican consumers were bullish despite macro fears ahead of the changein administration.South Africa: Anatomy of the Consumer – Consumers are worried; spending habits will reflectthis, 22 October 2018The subtitle of this October 2018 publication seems quite self-explanatory. Click the link to read more.Brazil: Anatomy of the Consumer – What do Brazilian consumers want, 13 April 2018In April 2018, we learned about the disconnect in Brazil between a distrust in institutions andbrands and optimism about the economy as well as salaries.US: Anatomy of the Consumer – What do US consumers want, 18 January 2018In January 2018, American consumers were confident but not spending as much.UK: Anatomy of the Consumer – Have things changed, 13 December 2017In December 2017, we saw UK consumers were losing momentum and were concerned aroundliving costs, terrorism and BrexitChina: Anatomy of the Consumer – What young, wealthy Chinese aspire to now, 3 November 2017A November 2017 deep dive highlighted many reasons to rejoice and few concerns in China.3Equities ● Consumer and TechFebruary 201966% Preferredbrands Technology ofrespondentsarespendingmore timeonWeChatthantheywere lastyear Source:HSBC,Toluna KeydatabehindChina’saffluentconsumers Global overlocal adidasandNikearestillwidely favoredcomparedtolocal Chinesesportswearbrands SouringApple Huaweiisnowfavoredover Appleforsmartphonebrands ThePandawears … Coachisthefavoritefor affordableluxuryinChina,but KorsisthefavoriteintheUS Acrownforevery achievement Thenumberonepreferred watchbrandisRolex,sameas intheUS 84% ofrespondentsthinkthatsoftdrinks areunhealthy,higherthaninthe USorMexico 73% ofrespondents werewillingtopay apremiumfor a glassbottle insteadof a plasticbottle 67% ofrespondentssaidtheywouldbe likelytowear asmartwatchinthe nearfuture 65% ofrespondentsareopento shoppingforluxuryonlineonTmall topdestinations JapanandHongKongarethe mostaspireddestinationsthis year;Francefallstothird 69% Staycationisfashionable ofrespondentsareplanningto travelabroadnomorethantwo timesthisyear luggage Samsoniteisnowthemost preferredluggagebrandamong ourrespondents 。。。。。。