The number of
Chinese billionaires and millionaires is reaching a new peak, and their mode of
consumption is evolving, new research has found.
The Chinese Luxury Consumer White Paper 2012, released on Tuesday,
suggested that there are 2.7 million high net worth individuals in China with
personal assets of more than 6 million yuan (S$1.19mil).
Six in 10 are male, with an average age of 39.
There are 63,500 ultra-high net worth individuals with assets of more
than 100 million yuan, an increase of 10 per cent compared with last year.
Eight in 10 are male, with an average age of 41.
The report, focusing on private banking in China and the evolving
lifestyle of the Chinese luxury consumers, was released by Industrial Bank Co
Ltd and the Hurun Report Research Institute.
Real estate and stocks remain the two most popular investment choices
for the wealthy, but they are also investing more in art and unlisted
companies, the report said.
"Most brands recognize the spending power of the Chinese luxury
consumer, but we are attempting to ask the question of 'Who are these people
are and what makes them tick?'" said Rupert Hoogewerf, Hurun Report
chairman and chief researcher.
Between October 2011 and January 2012, Industrial Bank and the Hurun
Research Institute conducted 878 face-to-face interviews with the bank's
private banking customers in 29 cities around China.
The average personal wealth of respondents was 49 million yuan.
Annually, they spend 3 per cent of their personal wealth.
Travel, daily luxuries and children's education have become the top
consumption hotspots.
More than half of high net worth individuals expect their expenditure
on travel to increase, with health and wellness and children's education close
behind at 40 per cent.
China's high net worth individuals are paying ever more attention to
their health, with 73 per cent choosing to have regular health checks and a
further 10 per cent already having a personal physician.
Children's education is the wealthy people's third-largest area of spending,
with 85 per cent saying they plan to send their children abroad to study.
Among ultra-high net worth individuals, the figure is 90 per cent.
High net worth individuals are also showing interest in value-added
services provided by private banking, with 60 per cent of the respondents
wanting their private bank to provide luxury travel advice, half wanting
health-related services and more than one-third favoring services related to
their children's education.
"Analyzing the consumption demand of the luxury consumer has
practical significance to expanding domestic demand," said Zhang
Chonggong, the bank's vice-president of retail banking and general manager of
private banking.
Xu Xin, president of Deer Jet, a subsidiary of the Hainan Airlines
Group, said he is very optimistic about the Chinese business aviation market
due to the increasing number of rich people in China and their willingness to
spend more on business jets.
Furthermore, almost half of the high net worth individuals intend to
take part in training programs over the next three years.
More than one-third of high net worth individuals like to attend
conferences and lectures, while almost 30 per cent have taken part in executive
MBA programs or further education classes for CEOs.
More than three-fourths of them feel that the biggest benefit they get
from this sort of activity is in helping expand their social networks.
Having passed through the first phase where luxury goods are used as
tools to confirm one's social status, the rich have now entered the stage of
wealth preservation with a lower-key way of life.
Yao Jing
China Daily/Asia News Network
Business & Investment Opportunities
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