View Travel Retail under Covid-19

From China's Standpoint

Sharing Session - TRBusiness x Jessica's Secret

International & Domestic Flights Data Overview01

Internat ional Fl ights Data & Government Pol icy

Shan

g…

Beijin

g

CHN HK

Guang

…

Bang

kok

Seou

l

Taipe

i

Toky

o

Singa

p… LAPa

ris

New…

Frank

furt

International Departure Chinese Population in May YOY

2018 2019 2020

The "Five Ones" policy continues,

• The international flight policy of "one airline, one country, one route, one week, one flight" came into effect at the end of March, and will remain in June.

Shan

g…

Beijin

g

CHN HK

Guang

…

Bang

kok

Seou

l

Taipe

i

Toky

o

Singa

p… LAPa

ris

New…

Frank

f…

International Arrival Chinese Population in May YOY

2018 2019 2020

25k 18k 15k 10k 5.9k 6.3k 2.3k 4.5k 2.9k 2k 2.6k2.2k 1k

5.5k 3.7k 2.8k 3.9k 2.8k 8.2k 2.5k 4.9k 3.3k 8.3k 6.5k3.7k 2.8k

The Sign that indicates outbound travel resume,

• The 14-day quarantine policy for outbound travellers returning to China.

• Estimately $850 ~ $1200/person self-paid quarantine fee

Data source: Partner - Oriental Travel Retail Observer

China's Fl ights to Major Internat ional Dest inat ions

266k

1.04m

1.8m

1.03m 972k 946k

333k

1.4m

2m

1.1m 1.08m 1.01m

23.6k 71k 22k 14k 11k 10k

0-19 yrs 20-29 yrs 30-39 yrs 40-49 yrs 50-59 yrs over 60 yrs

201820192020

Chinese Outbound Travellers Age Distribution in May YOY Data

2.8m

3.2m

78.5k

3,2m

3.7m

73.5k

Gender Distribution of Chinese Outbound Travellers in May YOY Data

May 2020

May 2019

May 2018

Data source: Partner - Oriental Travel Retail Observer

China's Domestic Fl ights Data

Beijin

g

Shan

g…

Guang

…

Cheng

…

Shen

z…

Kunm

i…Xi'

an

Chong

…

Hangz

…

Nanjin

g

China Domestic Departure Population in May YOY

2,018 2,019 2,020

Beijin

g

Shan

g…

Guang

…

Cheng

…

Shen

z…

Kunm

i…Xi'

an

Chong

…

Hangz

…

Nanjin

g

China Domestic Arrival Population in May YOY

2,018 2,019 2,020

1.4m

8.7m

13.8m

9.5m

7m

4.5m1.9m

10m

13.9m

9.3m

6.8m

4.2m

1.3m

7.4m 7.6m

4.6m

2.7m1.1m

0-19 yrs 20-29 yrs 30-39 yrs 40-49 yrs 50-59 yrs over 60 yrs

201820192020

Chinese Domestic Travellers Age Distribution in May YOY Data

25.6m

26.2m

15.8m

19.4m

20.1m

8.9m

Gender Distribution of Chinese Domestic Travellers in May YOY Data

May 2020

May 2019

May 2018

841k

1.5m

1.1m

1.4m1.2m 1.1m 1.1m

1.3m

962k

622k949k833k

1.4m1.2m

1.5m1.2m 1.1m 1.1m

1.3m

627k

Data source: Partner - Oriental Travel Retail Observer

China Domestic Fl ights to Hainan

CDF Sanya

Guang

zhou

Beijin

g

Shan

ghai

Shen

zhen

Chang

sha

Zhen

gzho

u

Chong

qing

Hangz

hou

Wuh

an

Cheng

du

China Domestic Arrival in Hainan in May YOY

2,018 2,019 2,020

86.8k

349k

446k

263k 248k

169k101.6k

346k401k

232k214k

139k

87.5k

295k

221k

119k93k

42k

0-19 yrs 20-29 yrs 30-39 yrs 40-49 yrs 50-59 yrs over 60 yrs

201820192020

Chinese Domestic Travellers to Hainan Age Distribution in May YOY Data

862k

774k

489k

706k

662k

372k

Gender Distribution of Chinese Domestic Travellers to Hainan in May YOY

May 2020

May 2019

May 2018

49k

9.4k

42k

57.2k 58.8k51k 52k

48k49.8k

40.3k

Data source: Partner - Oriental Travel Retail Observer

Government 's Support to Chinese Travel Retai l

• Hainan FTP/FTZ , duty free shopping allowance raised from RMB30,000 to RMB 100,000.

• Wangfujing Group was granted with 8th duty-free license.

• It is said that 1 or 2 more duty-free licenses will be granted soon.

Source: China Daily , TRBusiness

Succession of Emergency in China

• A sudden wave of Covid-19 outbreak took place in North-east area of China in May.

• New Covid-19 cases confirmed at Beijing Xinfadi wholesale market on June 11th.

• Epidemic is under well control with Chinese government's effective measure, but estimately will be accompanying for a long time.

• Resuming date is unpredicted.

Source: China Daily , Baidu Big Data

Impact on OTAs in China

On February 29, a document from Baicheng Travel website showed that the company decided to close the company and start preparation for liquidation.

On June 10, Shijiebang, the company which was named as "online travel startup", famous of its customized outbound tours service, had ceased operations.

Kaissa : - 64.22 million CNY

Zhongxin/Uzai.com : - 29.06 million CNY

Zhongqinglv/AoYou.com : - 198 million CNY

TuNiu.com : - 200 million CNY

Ctrip.com : - 1.2 billion CNY

Tourism listed organizations Q1 Performance was all in negative growth

Impact to Jessica's Secret & Reaction

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20

Total Users MOM

Total users droppedby 57 % in last half year on Jessica's Secret App

Indicates the impact on outbound traveling

Jessica's Secret Team Reaction

80%

20%

Pre Covid-19 Key Projects Share

APP

Data Analysis

20%

80%

Under Covid-19 Key Projects Share

APP

Data Analysis

The epidemic is not necessarily a bad

th ing . I t he lps us to p r e s s that

Pause button, and to accomplish

things that have been left behind

for a long time.

—— Mirko Wang， CEO of Jessica's Secret

Jessica's Secret Users' Demographic under Covid-1902

19.22%16.51%

12.26%

8.13%

5.41% 2.55% 2.47% 2.27% 2.05% 1.98%

Shan

ghai

Jiang

su

Zheji

ang

Beijing

Guang

dongAnh

ui

Sichu

an

Shan

dong

Liaonin

gHub

ei

Active Users Share - Provinces (Mar-May，2020)

Jessica's Secret User Demographic

22.49%

10.33% 9.49%6.94% 6.90%

2.59% 2.54% 2.50% 2.45% 2.41%

Shan

ghai

Hangzh

ou

Beijing

Nanjin

g

Suzh

ou

Guang

zhou

Wux

i

Shen

zhen

Cheng

du

Ningbo

Active Users Share - Cities (Mar-May，2020)

Gender Ratio

28%72%

Age Distribution

26.65%

34.91%

20.03%

8.84%

6.99%

2.58%

18-24岁

25-29岁

30-34岁

35-39岁

40-49岁

50岁…JESSICA'S USERS: AGE

DISTRIBUTION

More than 80% users are the Millennials

40.80%

15.66%

6.58% 5.88% 4.54% 4.08% 4.02% 3.91% 2.33% 2.05%

China

Korea

Japan

Austra

lia

Thail

and UK

HongKong USA

Spais

h

Fran

ce

Top 10 - Most Searched Destionations (Mar-May，2020)

Jessica's Secret User Demographic

97.30%

0.54% 0.54% 0.42% 0.38% 0.24% 0.21% 0.14% 0.12% 0.11%

China

USA

Austra

liaJa

pan UK

Canad

a

Singap

oreKore

a

Thail

and

New Z

ealan

d

Active Users Share - International Destinations (Mar-May，2020)

10.99%

8.68%7.36% 6.93%

4.62% 4.18% 4.10% 3.64% 3.05% 2.83%

Louis

Vuitto

nGuc

ci

Este

e Lau

der

Chane

l

La M

erDior

Lanc

ome

SK-II

Cartie

rYS

L

Top 10 - Most Searched Brands (Mar,May 2020)

30.83%

13.69%

6.89% 6.88% 5.96% 5.80% 5.52% 4.35% 4.24%2.56%

Sunr

ise (S

hang

hai)

CDFG (S

anYa

)

King Po

wer

Sunr

ise (S

hang

hai)

DFS (H

K)

Meil

an D

uty F

ree

Sunr

ise (B

eijing

T3)

Kix (O

saka

)

Lotte

(Seo

ul)

Shilla

(Seo

ul)

Top 10 - Most Clicked Shops (Mar-May，2020)

Jessica's Secret Index - May，2020

Beauty Care 38%

Accessories10%

Bags40%

Liquor&Tabacco 12%

Popular Category Share in May, 20201. Lamer The Treatment Lotion 150ml

2. Estee Lauder Advanced Night Repair Synchronized Recovery Complex II Duo

3. Estee Lauder Advanced Night Repair Synchronized Recovery Complex II 50ml

4. Louis Vuitton NéoNoé Rose Poudre

5. Louis Vuitton Mini Dauphine

6. Gucci GG Marmont small matelassé shoulder bag 443497 DTDIT 1000 black leather

7. Estee Lauder Advanced Night Repair Duo 1items

8. Clarins Double Serum Duo Complete Age Control Concentrate 2x50ML

9. Chanel Lambskin Gold-Tone Metal Black Mini Flap Bag

10. Gucci Online Exclusive Preview Gucci 1955 Horsebit bag GG Supreme/brown

In-depth Travel Retail Industry Big Data Research03

Price AITracking Platform

ü Data covers over 60 regions, 980 shops

ü Shops including duty-free store, department store, brands official site, and Tmall.

ü View multiple discounted prices (special offer, membership credit, cashback, etc), and view discount details.

ü Support to export in speadsheet with multiple formats.

Jess ica 's Ch inaMedia Moni tor ing P la t fo rm

Jess ica 's S imple Index

ü Monitor Chinese major media platforms data & info.

ü Acquire first-hand informaiton discussed regarding your brand/shop by Chinese consumers.

ü Promptly identify shops' pricing level in global market.

ü Retrieve the cause to the price fluctuation, narrow down to category, brand, even single SKU.

Jessica the Elf - Big Data Intel l igence Price Grading

• Continuous optimization on customer-end

service.

• Score is calculated according to a grading

algorism model.

• Grading scale from 0.1 to 10.

Jessica's Secret 'sTravel Retail Recovery Plan04

Assist Retailers - “0 Commission” Plan

“Jessica's Secret”releases some or all of our commissions from retailers to

travellers. (Cashback)

“Jessica's Secret”may waive part of the commissions if retailer offers the best deals of

all channels to JS users.

Conventional Model：Discount+Commission

New Model 2：The Optimal Discount

New Model 1：Discount + Cashback

“Jessica's Secret”gets commission from retailers

Assist Brands - Complimentary Targeted Exposure

Complimentary Promotional Info Exposures

To help brands & retailers delivering promotional news (discounts, GWP) to the targeted audiences.

Comprehensive Chinese E-commerce Service with Low Initail Fund

A small Initial Fund is only what needed for establishment , the rest part of development cost could be covered when business resumes.

Assist Retai lers - Low-cost Chinese E-commerce Renovation

Assist Retai lers - Low-cost Chinese E-commerce Renovation

ü Domestic products deliever to China directly

ü Activate the private traffic / exisiting usersü Expand customer base

Live-streaming

Reaction ofTravel Retail E-commercein Covid-19 Era

Initial Stage

Mid Stage

Post Covid Stage

ü Lasted much longer than offline shopsü Achieved more cash inflowü Launched new products released during epidemic (Hermes Lipstick)ü Attracted more trafficü Implemented promotions to ease burden on inventory timely

ü Maintain online traffic and regular exposure to customersü Implement Promotions & home delivery services for loyalty membersü Connect sevices with live-streaming sellingü Avoid severe econimic loss

ü Promptly resume to normal businessü Keep customers updated with latest launches, promotional

campaigns

ShillaDuty Free

Lotte Duty Free

Sunrise CRM

Hainan Duty Free

King Power Duty Free

DongWha Duty Free

Shenzhen Duty Free

HyundaiDuty Free

Offshore Duty Free

Shilla IparkShinsegaeDuty Free

SM Duty Free

CEO - Mirko Wang : meng.wang@jescard.com

Head of BD - Stephie : stephie.yang@jescard.com