Profile Of The Shopping Habits Of A Shanghai Family In 2054

Rise of the Urban Middle-Class Consumer: Shanghai 2054 Rapid urbanization and city building are central to China's thriving economic development. By 2025, China will house 225 of the world's 600 largest “mega"and “middleweight" cities. By 2054, 70% of China's population will live in urban areas, adding 300-700 million people to the current urban population. As economic prospects improve for this burgeoning and urbanized middle class, new investment opportunities emerge for institutional investors. SHANGHAI'S POPULATION AND ECONOMIC BOOM 2015 CHINA 2015 SHANGHAI 1.39B population' $9.2T GDP2 23.71M population $14,435 GDP per capita“ .2054 ..2054 1.38B population' $22.9T GDP25* 50M population* $35,000 GDP per capita* THE NEW CONSUMER CLASS In less than a few decades, China has given rise to a middle class of 150 million citizens. In the next 45 years, a total of 869 million consumers will be lifted into the middle and upper income brackets. WHAT IS MIDDLE CLASS? > Mass Middle Class: $9,804 - $17,319 household income > Upper Middle Class: $17,319 - $37,417 household income CHINA'S URBAN POPULATION SHIFTS 1 2012 | 2022 URBAN HOUSEHOLDS MASS MIDDLE CLASS 256M 54% 357M 22% UPPER MIDDLE CLASS 14% 54% SHANGHAI'S MIDDLE CLASS FAMILY IN 2054 FAMILY $56,000 household income* $12,550 disposable income* >> Lifestyle spending >> Retail spending GRANDPARENTS PARENTS TEEN 12 years 45 years 16 years Household goods Durable good Consumables Financial services Education Healthcare Consumables Eating out Pharmaceuticals Travel Fashion INVESTING IN SHANGHAI'S CONSUMERS Investors will find opportunity in meeting the needs of a rapidly developing urban-based consumer class. Durable goods and consumer goods will be in high demand, as well as new commercial real estate options and logistics infrastructure. Already the world's largest consumer, China's demand for luxury goods will continue to soar as consumers achieve greater purchasing power. CURRENT STATE 2015 OPPORTUNITY PROJECTION FOR 2054 CONSUMER GOODS & SERVICES SALE SAL SALE SALE SALE $140.7B Total retail sales of consumer goods* Rising demand for consumer goods and shopping experiences $2.0T Total retail sales of consumer goods®* RETAIL OUTLETS 12.9 sq ft retail space per capita0 Less than 16% supply of Grade A stock10 45 sq ft retail space per capita* 6% retail vacancy rate10 Investment-grade retail stock 50% supply of Grade A stock LOGISTICS & E-COMMERCE Logistics and warehousing to support e-commerce delivery infrastructure $13.8B Online retail spending1* +$193B Online retail spending"* LUXURY RETAIL $1,000 average luxury good purchase, Shanghai? $500 average luxury good purchase, New York Cityl2 High-growth demand: • Luxury brands • High-end hospitality • Hard luxury • Collectibles World Luxury Capital Shanghai enters Global Luxury Top 20 list13 * Estimated amounts only, based on available data (1) http://esa.un.org/unpd/wup/Highlights/WUP2014-Highlights.pdf, (2) http://data.worldbank.org/country/china, (3) http://www.shrkjsw. gov.cn/spfpen/dr /data/2013110/0000066040660434698136.html?openpath=spfpen/data, (4) http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PRODO000000000247538/Shanghai.pdf, (5) http://www.tradingeconomics.com/china/forecast, (6) http://research.prudential.com/documents/rp/The_Wealth_of_Cities.pdf, (7) https://www.hsbc.com.vn/1/PA_ES_Content_Mgmt/ content/vietnam/abouthsbc/newsroom/attached_files/HSBC_report_Consumer_in_2050_EN.pdf, (8) http://www.mckinsey.com/insights/consumer_and_retail/mapping_chinas_middle_class), (9) http://www.stats.gov.cn/tjsj/ndsj/2014/indexeh.htm, (10) http://research.prudential.com/documents/rp/PRU_China_Retail_0312.pdf, (11) https://www.forrester.com/China+Online+Retail+ Forecast+2014+To+2019/fulltext/-/E-RES118544, (12) http://www.contactlab.com/en/featured-resources/luxury-digital-behaviour-study, (13) http://www.mckinsey.com/insights/consumer_ and_retail/the_glittering_power_of_cities_for_luxury_growth SALE SALE SALE SALE SALE SALE SALE SALE SALE E SALE SALE SALE SALE