Millions Of Mainlanders Willing, Able To Spend On Travel, Luxury
The Shanghai Daily has a story today findings by the Hurun Report (a sort of Chinese Robb Report) on the growing number of millionaires in China, noting that the most recent tally has exceeded the expectations of some China watchers:
The mainland is home to about 825,000 people who are worth more than 10 million yuan (US $1.5 million) and at least 51,000 who are worth more than 100 million yuan, the Hurun Report said, the first time it calculated those figures.
The number of China’s super-rich “is beyond my expectation, and probably that of most of foreign people,” said Hurun Chairman Rupert Hoogewerf. “The rapid growth of the number of rich people in China manifested itself in the way the Chinese economy has kept a steady pace in recent years, because of surging real estate and stock markets.”
To put these numbers in perspective, since $1.5 million in America is enough to be quite wealthy but not “super rich,” keep in mind that China’s annual per capita income is around $3,180. The report points out that half of the richest people in the mainland live in the three most affluent areas — Beijing, Guangdong Province, and Shanghai. No big surprise there. So, naturally, in the article Hurun Chairman Hoogewerf (we’re seeing a lot of him lately, aren’t we?) segues the report’s findings into hopeful signs for luxury retailers. These mainland millionaires, Hoogewerf says, love to shop and travel:
“With the growth in wealth comes a surge in self-confidence driving China’s wealthy to continue to spend despite the economic crisis,” Hoogewerf said. “And there is an increased importance of China’s second- and third-tier cities for brands looking to tap China’s high-end consumers.”
The World Luxury Association said earlier that China had overtaken the United States to become the second-biggest luxury goods market following Japan. Luxury consumption in China totaled US$8.6 billion last year, accounting for 25 percent of the global market. The association also said the Chinese mainland accounts for 70 percent of China’s luxury spending.
Breaking it down into demographics, Hurun found that the average age of a mainland millionaire was 39, an entrepreneur, and an avid traveler in good health. This is all good news for anyone selling anything, basically, and not just in the domestic market — the report concludes that travel destinations should court these young monied masses as well:
The US was their favorite overseas destination while Yunnan Province and the beach resort city of Sanya in southern China’s Hainan Province were the most popular for domestic breaks. The mainland’s rich people also enjoyed shopping in Hong Kong, the report said.
While we can debate the quality of the Shanghai Daily as a newspaper until we’re blue in the face, I would say that these figures actually lowball the real figure, since government-employed millionaires in China are far less willing to disclose their net worth than youthful entrepreneurs. So, as we often do, we should keep our eyes on the spending habits of this legion of newly-minted big spenders — they’re the first massive group of mainland Chinese to have such prodigious amounts of cash — and be willing to spend it — possibly in all of Chinese history. And what they’re going to spend all of that cash on is anyone’s guess, really, although every luxury brand, real estate broker, travel agent, and car dealer in a 2,000 mile radius is hoping that they’ll be recipient of at least a portion of it.