Millionaires in China Boost Retail Market
Hurun Report Surveys China's Wealthy Across the Country
May 8, 2009
Hurun Report, a leading authority on China’s wealthy, released the Hurun 2009 Wealth Report in April 2009, detailing the number of millionaires in China by region for the first time. The picture that emerges is somewhat surprising- not only are China’s millionaires spread across the country, but they profess themselves relatively unscathed by the global downturn.
Millionaires in China
China has clearly come a long way since opening up to the rest of the world in the late 1970s. The Wealth Report focuses on individuals with a net worth of more than 10 million yuan (USD 1.46 million, or GBP 1 million), who total 825,000, and those with more than 100 million yuan, who total 51,000. One person in every 1700 in China has at least 10 million yuan.
Unsurprisingly, Beijing, Guangdong and Shanghai are home to the vast majority of mainland China’s rich, accounting for 48 percent of the total. Yet the rest are spread across the country, from Fujian to Sichuan to Inner Mongolia. Rupert Hoogewerf, founder and publisher of Hurun Report, notes the growing importance of China’s second and third-tier cities, and their appeal for luxury brands looking to tap China’s growing ranks of high-end consumers. “There is a lot of cash in China,” Hoogewerf told the audience at the launch of the report. Cash that is ready to be spent.
Much of mainland China outside of the big three – Beijing, Shanghai and Guangdong – remains virgin territory for luxury brands. China’s wealthy, with their passion for travel and golf, according to Hurun Report’s 2009 Best of the Best Survey, are particularly fond of luxury brands such as Louis Vuitton, BMW and Mercedes Benz, along with Cartier and Patek Phillipe. There is clearly a market ripe for development in China’s second and third-tier cities.
What Financial Crisis?
Unlike those entrepreneurs engaged in export-focused business further down the wealth ladder, those at the top of China’s rich list profess themselves relatively unscathed by the global downturn. They have primarily made their fortunes from the country’s urbanization process, in areas such as real estate, infrastructure and white goods. In a Hurun Report survey carried out in February 2009, 82 percent of respondents felt their lifestyle had been unaffected by the financial crisis.
The Chinese government is promoting the idea of consumption to offset the sharp decline in exports which first afflicted China in 2008. China's growing ranks of entrepreneurial, wealthy people are one group that needs little encouragement to purchase the products of the world's luxury brands.
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