Henning Schwarzkopf von der CHEURAM Consulting Group Ltd. aus Hong Kong verweist auf einen sehr interessanten Artikel im Hurun Report mit dem Titel The Chinese Luxury Consumer White Paper 2012 in Zusammenarbeit mit der Industrial Bank of China.
- There are 2.7 million high net worth individuals (HNWIs) in China with personal assets of more than 6 million Chinese yuan (equivalent to US$950,000) and 63,500 ultra-high net worth individuals(UHNWIs) with assets of more than 100 million Chinese yuan (US$15.8 million)
- Chinese luxury consumers expect their private banks to provide value-added services relating to luxury travel, health care and children’s education
- 70% of those who have read an Executive MBA want to study a second one
- 85% plan to send their children to study abroad
- The luxury consumer exercises 2.3 times a week
- High net worths are on the road 6.9 days a month, with ultra high net worths 9 days
- Two thirds have started a collection: watches and classical Chinese paintings are most popular
- Half have a religious belief
- 10% of annual spend goes on gifting. 80% of gifting is for business.
- 73% of individuals purchase luxury goods in Hong Kong. 28% purchase goods in the Mainland
- Internet surpasses television as the main source of obtain shopping information
- 20% have little confidence in their knowledge of what they are collecting
- Li Kaifu’s Weibo or micro-blog is most popular, followed by Wang Shi, Pan Shiyi, Ren Zhiqiang and Shi Yuzhu
- 35% own pets
- 13% of UHNWIs intend to purchase a corporate aircraft
The Industrial Bank and the Hurun Report Research Institute today released The Chinese Luxury Consumer White Paper 2012, a ground-breaking report on private banking in China and the evolving lifestyle of the Chinese luxury consumer. This authoritative 48-paged report comes at a time when the nation’s high net worth individuals (HNWIs) are growing rapidly and seeing an evolution in their value systems and tastes.
Industrial Bank’s vice president of retail banking and general manager of private banking, Zhang Changgong, said, “The consumer lies at the heart of a country’s stable economic development, and analyzing the consumption demands of the luxury consumer has practical significance to expanding domestic demand. This white paper is able accurately to reflect the characteristics and trends of the Chinese luxury consumer. We are proud to put out this white paper with the Hurun Research Institute, the authority when it comes to the Chinese luxury consumer.”
Hurun Report chairman and chief researcher, Rupert Hoogewerf, said, “We are delighted to cooperate with Industrial Bank, one of the world’s most innovative banks, to produce this authoritative and ground-breaking report on the Chinese luxury consumer. Most brands now recognise the spending power of the Chinese luxury consumer, but we believe this report to be the first serious attempt to ask the question of ‘Who these people are and what makes them tick?’.”
Between October 2011 and January 2012, the Industrial Bank and Hurun Research Institute conducted 878 face-to-face interviews with Industrial Bank private banking customers from 29 cities across China. The average personal wealth of respondents was 49 million Chinese yuan. Their annual spend was 3% of personal wealth.
How big is the market
In the report, we classify HNWIs as those with more than 6 million Chinese yuan worth of personal assets. At present, there are 2.7 million high net worth individuals in China, 6 in 10 being male, with an average age of 39 years. Their main sources of wealth are returns on investment and the ownership/sale of their companies. Their main investment choices tend to be real estate, stocks and shares, however, interest in fixed income investments is gradually increasing. In addition, they own an average of three cars, four watches, take 20 days of holiday a year, with their preferred sporting activities being golf and swimming.
There are 63,500 UHNWIs with personal assets of more than 100 million Chinese yuan. 8 in 10 are male, with an average age of 41. Their main source of wealth is through the ownership/sale of their companies. Real estate and stocks remain the two most popular investment choices, but they also invest more in art and unlisted companies. UHNWIs own an average of three cars, six watches, take 20 days of vacation a year, and like playing golf.
Analysis of the regional distribution of HNWIs shows that East China accounts for the highest proportion, at more than 40%, whilst Beijing has the highest total number, with 460,000 individuals, 10,500 of them UHNWIs. Guangdong province is in second place, followed by Shanghai and Zhejiang province.
Key consumer spending areas – travel, daily luxuries, children’s education
HNWIs spend an average of 3% of their personal wealth a year.
Travel is the biggest area of consumption for HNWIs, accounting for 19% of their annual spend. Next come daily luxuries, at 15% and children’s education which accounts for 12%.
Travel, healthcare and children’s education are top three consumption hot-spots
Luxury travel is emerging as the hottest growth area in terms of spending. More than 50% of HNWIs expect their expenditure on travel to increase in the future, with health and wellness and children’s education close behind at 40%. China’s HNWIs are paying ever more attention to their health, with 73% choosing to have regular check-ups, and a further 10% already having a personal physician. There is also a clear rise in the proportion of both male and female HNWIs who neither drink nor smoke. The number of male HNWIs who do not smoke rose from 35% in 2010 to 50% in 2011, whilst those who stopped drinking rose from 19% in 2010 to 25% in 2011. Children’s education is HNWIs’ third largest area of spending, with 85% saying they have a plan to send their children abroad to study, while among UHNWIs the figure is 90%. Furthermore, a growing proportion is choosing to send their children abroad earlier.
HNWIs want their private bank to provide luxury travel advice, with 60% of respondents. Half want health-related value-added services, while more than 1/3 favouring services related to their children’s education. HNWIs are greatly interested in value-added services provided by private banking, since such services not only increase their knowledge and provide entertainment, but also offer them a chance to expand their social circle.
Education is seen as an important platform for improving one’s Social Networks
Almost half of HNWIs intend to take part in training programmes over the next three years. Over a third of HNWIs like to attend conferences and lectures, while almost 30% have taken part in EMBA programmes or further education classes for CEOs. Among those who take part in EMBAs and CEO further education classes, more than ¾ feel that the biggest benefit they get from this is in helping to expand their Social networks. For HNWIs below 30 years, improving their social networks (87%) and educational level (45%) are top priorities. In addition, almost 60% of HNWIs seek to better themselves through reading.
1/3 are Buddhist, followed by Christians and Moslems at 7% and 3% respectively
Approximately half of HNWIs have a religious faith, with Buddhism the most popular, at 30%. 7% are Christians, of which 70% are Protestants and 30% Catholics. Half profess to have no religious faith.
The proportion of HNWIs who are Buddhists is higher than the average for the country, which stands at 18%, according to data from the ‘Religious Blue Paper: Report on Religion in China (2011)’.
Young HNWIs, aged below 30, are more likely to be Christians, at 11%, compared with the over 30s (31-45: 5%; over 45: 3%). Of the HNWIs who possess a religious faith, the proportion of women is higher (37%) than that of men (25%).
Gift spending accounts for 10% of annual consumption, with 80% for business
Gifts are one of HNWIs’ five top areas of spending, costing them some 150,000 Chinese yuan per year – and, for UHNWIs, more than 260,000 Chinese yuan. Gifts given at business occasions account for almost 80% of the presents given by HNWIs, while more than 40% of HNWIs also need to give gifts at weddings and other celebrations. The majority of HNWIs will choose gifts worth between 5,000 and 20,000 Chinese yuan, with men choosing more expensive gifts than women. Watches are HNWIs’ first choice for gifts when buying for a man, while red wine is the most common gift among UHNWIs.
High quality and exceptional brand reputation are seen as the most important luxury good characteristics
Quality is seen as the prime luxury good characteristic of luxury goods, reflective of a shift beyond seeing the luxury good as a status symbol. HNWIs are not concerned about the price, and the most important factor is the product itself, followed by the purchasing environment. HNWIs’ luxury goods purchases are concentrated in watches and jewels, whereas purchases by UHNWIs are showing a clear trend towards super-luxury goods such as yachts and private jets. In addition, it is of no surprise that more men bought watches (66%) and tobacco and alcohol products (36%), while more women bought jewels (58%), clothes (51%) and accessories (31%).
Hong Konghas become the undisputed first choice destination for HNWIs to buy luxury goods or high-end consumer products. Less than 30% of HNWIs buy luxury goods domestically, due a lack of product safety, poor management, a lack of credibility, high prices and high taxes. Hong Kong accounts for 73% of luxury or high-end purchases made by HNWIs, followed by those made in Europe and domestically, both at 28%. On average, HNWIs go abroad to Hong Kong to go shopping 2.9 times a year, whilst among UHNWIs the frequency of such trips is markedly higher, with an average of 3.7 times a year.
The Internet dominates television as the main source of information for consumer products
The Internet remains the most widely used media resource, with 67% HNWIs using it as their primary source of information. Sina.com is the most popular website, favoured by 73%, followed by Sohu and Tencent, at 47% and 35% respectively. More than 60% of HNWIs will obtain information from the web before making a purchase, a higher percentage than those who get information from television, magazines, or recommendations from family and friend (50% each). Television is the second-most used media source, with 62% of HNWIs mainly getting information from television. Of these, more than 70% mostly watch news and business programmes.
Leisure spending and travelling abroad
HNWIs work 39 hours every week, and spend 18 hours on leisure and entertainment. There is no obvious distinction between their working days and the weekend – they simply work when they need to, and take time off when they want. HNWIs go abroad an average of 3.2 times a year, while for UHNWIs the figure is more than 4 times. Holiday and business are the main reasons for travelling abroad. HNWIs spend an average of 7 days a month travelling for work, while UHNWIs travel the most, averaging 9 days a month. HNWIs take a relatively high number of holidays, averaging 20 days break a year, while 30% take more than 30
General Consumption Trends
HNWIs’ way of life can be divided into three main stages: wealth creation, wealth preservation, and wealth appreciation. Having passed through the first phase where luxury goods are used as tools to confirm one’s social status they have now entered the stage of wealth preservation with a lower-key way of life and are edging towards the final stage of wealth appreciation which sees more taste-based consumption as well as a more charitable way of life.
An additional trademark of the second phase which is seen in abundance with Chinese HNWIs is the joining of clubs and societies, partaking in elite sports, completing further education courses or becoming a collector of fine items.