The Chinese Credit Card Market

by Hua Zhang, November 6, 2009
Industry Trends


The credit card market is developing rapidly in China. By 2010, there could be more than 200 million people in China with an annual income of more than US$2,000. These people are potential credit card customers, and with the current number of credit card users at only 38 million, there is tremendous potential for future growth.

In a new report, The Chinese Credit Card Market, Celent examines trends in the Chinese credit card industry, analyzing cardholders, customer segmentation, products, and the competitive landscape.

The credit card market in China is very different from the markets in Taiwan and Hong Kong. Revolving credit usage rate is relatively low, so net interest income accounts for only about one-third of the total income of the credit card business. Annual fees are also low in the Chinese market. In terms of credit card choice, the following factors are important: convenience, adequacy of the credit limit, annual fee policies, services, and website features.

In 2005, in terms of marketing, the workplace marketing model accounted for 40%, followed by the bank websites, which accounted for 35%. In 2008, sales from bank websites far exceeded sales from workplace marketing. In addition, low-cost direct sales (such as call centers and direct mailing) received good responses. This change of preferred channel has created an opportunity for large banks to pursue the website model and for small banks to use a direct sales model. On the whole, however, sales via the Internet and telephone are still proportionately lower.

The annual income of China's high income population is equivalent to one-fourth of the annual income of the entire population, with a growth rate of 22.5%. High-end consumer card spending is more than US$10,000, which is 50 times that of ordinary credit cards.

"China's high-income population is a very important market, and will be even more important in the future," says Hua Zhang, an analyst with Celent's Asia Research Group and author of the report. "Low-income user groups are attracted by discounts, rewards, and low installment fees, while high-end customers value services."

The population with an annual income of more than US$17,600 is mainly concentrated in Beijing, Shanghai, Shenzhen, and Guangzhou, and this concentration will increase. In 2015, people in this income bracket in these four cities should account for 45% of China's population.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

Executive Summary


Market Overview



Volume of Credit Cards Issued



Development of the Credit Card Market



Credit Card Organizations






Opportunities and Challenges


Characteristics and Cardholders



Credit Card Usage and Payment



Consumer Attitudes to Credit Cards


Customer Segmentation



Segmentation by Income



Segmentation by City



College Market





Standard Card





Competitive Landscape



Volume of Cards Issued by Banks



Comparison of Bank Products





Future Trends


Leveraging Celent’s Expertise


Related Celent Research


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