Rus u sia i n n c redi d t i c ard d s pe p nd n i d n i g n g a br b oa o d d i n i 2013

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Lisa Fisher
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1 Russian credit card spending abroad in 2013 July 2013

2 Methodology Statistics on purchases made by customers using Citibank credit cards served as the basis for the research. The research analyzed data for the period from early 2007 to June 2013, and in 2013 the sample was no less than 500,000 customers, selected at random. The sample included only men and women aged 22 years or older with a monthly income of not less than 9,000 rubles, residing in 11 cities in Russia (Moscow, St. Petersburg, Volgograd, Yekaterinburg, Kazan, Nizhny Novgorod, Novosibirsk, Rostov-on- Don, Ryazan, Samara and Ufa). Projections for the full year 2013 were based on analyzed data for the first 6 months of 2013 and statistical trends for the last three years. In addition to Citibank s proprietary statistics, the forecast relies on the official Russians travel abroad data available at as well as the public information on the cost of tours. This methodology is generally in line with the methodology of research in

3 Spending trends of Russians abroad 3 * Forecast (includes spending on travel incurred through Russia-based travel agencies)

4 Dynamics of changes in foreign spending 100% 80% Share of spend abroad (as % of all payments made during the year) 17,5% 19,4% 17,0% 20,1% 21,7% 22,8% 24,4% 60% 40% 20% 84,4% 83,4% 84,0% 79,9% 78, 77,2% 75,6% foreign spend local spend 0% 100% 80% 60% 40% 20% 0% * Share of spend abroad (as % of all payments made during the year), excluding spending via the Internet 15,2% 16, 17,8% 15,9% 16,7% 17,8% 18, 84,8% 83,7% 82,2% 84,1% 83, 82,2% 81,7% * foreign spend local spend 4 * Forecast

5 Dynamics of changes in foreign spending (cont.) 100% 80% 60% 40% 20% 0% Internet spend 47% 42% 42% 40% 40% 40% 40% 39% 40% 38% 38% 3 41% % 3 30% 5 58% 58% 60% 60% 60% 60% 61% 60% 62% 62% 67% 59% 67% 67% 69% 67% 70% foreign spend local spend 100% 80% 60% 40% 20% 0% Offline spend 25% 15% 17% 15% 19% 17% 20% 21% 19% 16% 17% 1 25% 15% 17% 15% 20% 17% 75% 85% 8 85% 81% 8 80% 79% 81% 84% 8 87% 75% 85% 8 85% 80% 8 foreign spend local spend

6 Share of Internet spend abroad 100% Spend abroad 29% 4 40% 4 36% 39% 37% 36% 41% 44% 44% 48% 40% 54% 5 56% 50% 56% 80% 60% 40% 71% 57% 60% 57% 64% 61% 6 64% 59% 56% 56% 52% 60% 46% 47% 44% 50% 44% Internet spend Offline spend 20% 0%

7 Geography of foreign spending Million RUR 7

8 Most popular countries 16,0% Top 10 countries by volume of payments, including spending via the internet(% of all payments abroad) 14,0% 8,1% 7,6% 12,0% 10,0% 8,0% 1,9% 3,8% 5,8% 6,9% Internet spend Offline spend 6,0% 6,5% 6,9% 7,5% 5,9% 2,1% 3,4% 4,0% 5,1% 1, 2, 0,7% 1,5% 1,6% 2,0% 0,0% 3,7% 3, 3,2% 2,7% 2,8% 2,1% 1,7% 1,5% 2,0% 2,4% 2,4% 0,4% 0,9% 2,2% 1,6% 1,7% 2,2% 2,4% 1,8% 1,2% 0, 0, USA Italy United Kingdom France Spain Finland Switzerland Germany Luxembourg UAE This year, the leaders again remained unchanged, with the exception of Luxembourg and Austria moving ahead of the United Arab Emirates. 8

9 Most expensive countries Maldives Greece Mauritius Switzerland UAE Germany Italy China France Sri Lanka USA Top 10 countries by average transaction size (in rubles) This year's biggest purchases by Russians were made in the Maldives, Greece and Mauritius. In 2012, the leaders were the Maldives, Switzerland and Greece. The average transaction size is comparatively higher in countries with well-developed shopping, and hotels account for the largest transactions (such as the Maldives). 9 Rating includes only countries in which during the first half of 2013 there were more than 1,000 transactions

10 Most popular categories 20,0% 18,0% 7, 11, Top 10 categories on volume of payments, including spending via the internet (% of all payments abroad) 16,0% 14,0% 1,7% 4,4% 12,0% 10,0% 8,0% 11, 12,4% 9,9% Internet spend Offline spend 6,0% 7,6% 7,9% 7, 4,0% 2,0% 0,0% 3,4% 3,9% 1,7% 2,2% 0,1% 0,1% 1,2% 0,1% 0,2% 1, 0,0% 0,0% 0,2% 0,1% 0, 0,2% 2,0% 3,5% 3,5% 3,2% 3,4% 2,4% 3,2% 0,1% 0, 2,1% 3,1% 1,6% 2,6% 2,7% Hotels Clothing Stores Airlines Travel Agencies Car Rentals Food Services & Restaurants Stores Watches, etc Cash Advance Supermarkets Changes in the structure foreign spending show a shift toward increased online shopping in categories such as hotels and car rental. This is due to an increase in trust in online shopping and hence a larger prepayments. The Jewelry category rose by 2 positions 10

11 The most expensive categories Watches, etc Top 10 categories by average transaction size (in rubles) Insurance and Investment Airlines Healthcare Education Car Rentals Hotels Leather goods Home Equipment Travel Agencies Rating considers only those categories for which during the first half of 2013 there were more than 1,000 transactions

12 Top 10 most popular categories in the leading countries USA Italy Cash Advance; 2% Airlines; 2% 12% Supermarkets; 2% Other; 16% Other; 37% Airlines; 12% Stores; 2% 37% Hotels; 10% Watches, etc; Food Services & Restaurants, 2% Watches, etc; Travel Agencies; Stores; Car Rentals; 5% Home Electronic Appliances; 8% Direct Marketing, 6% Direct Marketing, Car Rentals; 7% Food Services & Restaurants, 4% Hotels; 22% In the US the spend on clothing and shoes is almost as much on airplane tickets; in Italy most spending is on clothes and shoes 37%. 12

13 Top 10 most popular categories in the leading countries United Kingdom France Hotels; 15% Hotels; 20% Other; 37% Other; 34% 14% 1 Insurance; Education; 4% Car Rentals; 4% Fire s & Government Services, 4% Airlines; 5% Travel Agencies; 5% Stores; 5% Direct Marketing, 5% Cosmetic Stores; Supermarkets; Car Rentals; Home Supplies; Travel Agencies; 5% Airlines; 5% Stores; 6% Food Services & Restaurants, 6% In the United Kingdom, spending on clothing and shoes equals that of hotels. In France, spending on hotels is predominant followed by clothes and shoes. 13

14 Top 10 most popular categories in the leading countries Spain Finland Other; 2 Hotels; 22% Supermarkets; 15% Travel Agencies; Other; 36% Hotels; 12% Cash Advance; Watches, etc; 4% Supermarkets; 4% Food Services & Restaurants, 5% Car Rentals; 6% Airlines; 8% Stores; 8% 15% Computer Hardware & Software; 1% Automotive Services & Supplies, 2% Sporting Goods Home Stores; Electronic Appliances; Stores; 8% Airlines; 5% Food Services & Restaurants, 4% 10% In Spain, spending on hotels, followed by clothing. In Finland spend in supermarkets, hotels and clothes. 14

15 TOP 10 most popular categories in the leading countries Switzerland Germany Stores; 2% Other; 2 Hotels; 19% Other; 26% Airlines; 26% Sporting Goods Stores; 2% Cash Advance; 2% Supermarkets; Food Services & Restaurants, 4% Airlines; 9% Watches, etc; 10% Travel Agencies; 1 1 Duty Free Stores; 2% Cash Advance; 2% Railways; 2% Watches, etc; 2% Food Services & Restaurants, 2% Car Rentals; 15% Stores; 4% Hotels; 16% In Switzerland the three major categories are followed by jewelry and watches. For spending related to Germany, airfare is the top spending category. 15

16 Top 10 most popular categories in the leading countries Luxembourg Direct Hotels; Marketing, 4% Home Electronic Appliances; 2% Leather goods & Luggage Stores; 2% Home Electronic Appliances; 2% UAE Other; 79% 5% E- Commerce/Info Services; 1% Automotive Services & Supplies, 1% Antique Shops & Services; 1% Watches, etc; 1% Books, Periodicals & Newspaper; 1% Photographic Equipment & Services, 1% Food Services & Restaurants, 2% Cash Advance; 2% Home Equipment; Stores; 5% Other; 16% Watches, etc; 10% Duty Free Stores; 10% Hotels; 29% 19% In Luxembourg online purchases account for the vast majority of spending. In the UAE the Duty Free purchases are the third most popular spending category: 10% of all spending in this country falls on these shops. 16

17 Demographics 100% 80% 60% 40% 20% 0% Age of those traveling abroad < % 80% 60% 40% 20% 0% Regions of those traveling abroad St.Petersburg Regions Moscow Foreign spending of men and women Foreign online spending of men and women 100% 100% 80% 80% 60% 40% 20% M F 60% 40% 20% M F 0% % The category analysis shows that men most often pay for hotels, car rentals and restaurants while women prefer to spend most of their money on shopping (clothes, department stores). 17 For 2013, the statistics are based on the analysis of the first six months only

18 Demographics spending: men and women Travel Agencies; 4% Supermarkets; Top 10 popular countries for spending by men in 2013 Other; 40% Finland; 4% France; 7% USA; 15% Germany; Greece; 0 Italy; 9% Spain; 5% Turkey; 0 UAE; Top 10 popular categories for spending by men in 2013 Other; 36% Watches, etc; Airlines; 7% Hotels; 20% Luxembourg; Switzerland; United Kingdom; 8% Car Rentals; 5% Cash Advance; 11% Stores; Direct Marketing ; 0 Food Services & Restaurants; 4% Travel Agencies; 4% Supermarkets; Top 10 popular countries for spending by women in 2013 Other; 36% USA; 14% Finland; 4% France; 7% Italy; 11% Germany; Greece; Luxembourg; 0 Spain; 6% Switzerland; UAE; 0 Turkey; United Kingdom; 10% Top 10 popular categories for spending by women in 2013 Airlines; 7% Car Rentals; 0 Cash Advance; 20% Other; 3 Stores; 5% Direct Marketing ; Watches, etc; Hotels; 17% Food Services & Restaurants; 2% 18 Women spend more in Italy, Spain, Greece and Turkey, but they spend almost nothing on internet stores registered in Luxembourg.

19 Demographics of spending: most popular categories Moscow Regions St. Petersburg Airlines; 8% Car Rentals; 4% Cash Advance; Airlines; 7% Car Rentals; Cash Advance; 4% Airlines; 7% Car Rentals; 4% Cash Advance; Other; 34% Clothing Stores; 14% Other; 35% Clothing Stores; 16% Other; 36% Clothing Stores; 1 Travel Agencies; 4% Supermarket s; 2% Watches, etc; Hotels; 20% Stores; 4% Duty Free Stores; 0 Food Services & Restaurants, 4% Travel Agencies; 5% Supermarkets ; 0 Watches, etc; 4% Hotels; 17% Stores; 4% Duty Free Stores; 2% Food Services & Restaurants, Travel Agencies; 5% Supermarket s; 5% Watches, etc; Hotels; 17% Stores; 4% Duty Free Stores; 0 Food Services & Restaurants, The top 10 categories are the same in all locations, with one exception in the Regions, where the Supermarkets category is replaced by Duty Free. 19

20 Demographics of spending: most popular countries Moscow Austria; Czech Republic; 0 Finland; 0 Germany; 4% Austria; Regions Czech Republic; Finland; 0 Germany; 0 St. Petersburg Austria; 2% Czech Republic; 0 France; 7% Greece; 0 France; 7% Greece; 0 Finland; 14% Greece; Other; 37% Italy; 10% Luxembour g; Spain; 5% Other; 39% Italy; 11% Luxem bourg; 0 Spain; 5% Other; 37% France; 6% Italy; 9% Germany; 0 USA; 16% United Kingdom; 10% Switzerland ; 4% Turkey; 0 UAE; 2% USA; 12% UAE; 6% United Kingdom; 8% Turkey; 4% Switzerland ; USA; 11% Spain; 5% Luxembour United Turkey; 0 g; Kingdom; UAE; 0 Switzerland 6% ; In the Regions the Czech Republic and Turkey join the list, and in St. Petersburg Finland 20

21 Seasonality by categories The peak sales for airfare is on average two months ahead of the peak times for other expenditures: people seek to purchase tickets well in advance, and this in turn is connected with the need to submit documents for visas. 21

22 Seasonality by countries 22 Spending in Luxemburg is also practically unaffected by seasonal fluctuations, in contrast to the majority of other popular destinations. Great Britain is popular in the autumn and spring while continental Europe is popular during the summer and January sales seasons. UAE is popular only during the cold time of year and Spain, to the contrary, only during the hot season.

23 Conditions and disclaimer This document does not constitute an offer to sell or a solicitation of an offer to enter into a transaction and all opinions expressed herein can be change with notice. The data presented in this document are intended solely for discussion and reflect the assessment of ZAO Citibank as of 24 July Neither ZAO Citibank nor Citibank N.A. nor Citigroup Inc. nor their affiliated entities or subsidiaries guarantee the accuracy and completeness of this information and are not responsible for any direct or indirect loses arising from its use. The use of material from this research should include a reference to ZAO Citibank. Questions regarding this research can be addressed to Irina Kiparoidze (irina.kiparoidze@citi.com), Head of Media Relations, Citi Russia & CIS, or Alina Vilnina (alina.vilnina@citi.com), Corporate Affairs Manager, Citi Russia. 23

How Russians Spend Abroad 2010

How Russians Spend Abroad 2010 Russia Consumer research How Russians Spend Abroad Citibank s Annual Research of Credit Card Transactions Abroad August Spend Abroad Dynamics Share of spend abroad (as % of total spend over one year) 20%