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Thursday, 16 April 2009
Want to find the rich? Look outside the mega cities
Foreign luxury brands looking to win in mainland need to reach into cities that are barely known to the rest of the world but are home to startling and fast-growing wealth, a series of studies shows.
Want to find the rich? Look outside the mega cities
Agence France-Presse in Shanghai 16 April 2009
Foreign luxury brands looking to win in mainland need to reach into cities that are barely known to the rest of the world but are home to startling and fast-growing wealth, a series of studies shows.
The majority of the country’s rich now live outside of the mega-cities such as Beijing, Shanghai and Guangzhou, said a study published this week by the Hurun Report.
About 825,000 people in mainland have net personal wealth of more than 10 million yuan (HK$11.36 million), according to the magazine, which tracks mainland’s wealthiest.
But about 52 per cent live outside the three biggest traditional centres for wealth – Beijing, Shanghai and southern Guangdong province, which includes Guangzhou and Shenzhen.
“People are always shocked when they go to the sticks – to the secondary, the third tier cities – and they realise ‘My goodness these places are booming like nobody’s business’,” Hurun’s publisher Rupert Hoogewerf said.
“We’re seeing very clearly there’s a trend of the luxury brands moving into the secondary cities.”
Management consultants McKinsey also warned in a separate report published this month of the dangers companies face in focusing on Beijing and Shanghai while underestimating the importance of mainland’s smaller cities.
“In Beijing, the biggest brand names often have several retail outlets, but many go unrepresented in Chengdu or Wenzhou, even though Chengdu has more wealthy households than Detroit, and Wenzhou as many as Atlanta,” McKinsey said.
The southwestern city of Chengdu, with a population of 10 million, and eastern Wenzhou, with 7.9 million residents, are only two examples of dozens of fast-developing cities with populations of more than five million.
The number of households with annual incomes of more than 250,000 yuan hit 1.6 million last year and is expected to rise to more than four million by 2015, McKinsey said.
Three quarters of the growth in mainland’s wealthy consumer segment will come from people who currently live outside Beijing, Shanghai and Guangdong, McKinsey said.
Another recent wealth study by China Merchants Bank and consultants Bain and Company reported similar findings.
More than 20,000 people who held more than 10 million yuan each in private equity were in the eastern provinces of Jiangsu and Zhejiang alone, it said.
Bain’s banking study said 320,000 people across the country would have more than 100,000 yuan in investable assets by the end of this year, representing a pool of 9 trillion yuan in assets.
Meanwhile, consumer confidence remains unusually high among the country’s rich, with 80 per cent of mainland millionaires saying the economic crisis had not hurt their lifestyle, Hurun said, citing 67 interviews done in February.
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Want to find the rich? Look outside the mega cities
Agence France-Presse in Shanghai
16 April 2009
Foreign luxury brands looking to win in mainland need to reach into cities that are barely known to the rest of the world but are home to startling and fast-growing wealth, a series of studies shows.
The majority of the country’s rich now live outside of the mega-cities such as Beijing, Shanghai and Guangzhou, said a study published this week by the Hurun Report.
About 825,000 people in mainland have net personal wealth of more than 10 million yuan (HK$11.36 million), according to the magazine, which tracks mainland’s wealthiest.
But about 52 per cent live outside the three biggest traditional centres for wealth – Beijing, Shanghai and southern Guangdong province, which includes Guangzhou and Shenzhen.
“People are always shocked when they go to the sticks – to the secondary, the third tier cities – and they realise ‘My goodness these places are booming like nobody’s business’,” Hurun’s publisher Rupert Hoogewerf said.
“We’re seeing very clearly there’s a trend of the luxury brands moving into the secondary cities.”
Management consultants McKinsey also warned in a separate report published this month of the dangers companies face in focusing on Beijing and Shanghai while underestimating the importance of mainland’s smaller cities.
“In Beijing, the biggest brand names often have several retail outlets, but many go unrepresented in Chengdu or Wenzhou, even though Chengdu has more wealthy households than Detroit, and Wenzhou as many as Atlanta,” McKinsey said.
The southwestern city of Chengdu, with a population of 10 million, and eastern Wenzhou, with 7.9 million residents, are only two examples of dozens of fast-developing cities with populations of more than five million.
The number of households with annual incomes of more than 250,000 yuan hit 1.6 million last year and is expected to rise to more than four million by 2015, McKinsey said.
Three quarters of the growth in mainland’s wealthy consumer segment will come from people who currently live outside Beijing, Shanghai and Guangdong, McKinsey said.
Another recent wealth study by China Merchants Bank and consultants Bain and Company reported similar findings.
More than 20,000 people who held more than 10 million yuan each in private equity were in the eastern provinces of Jiangsu and Zhejiang alone, it said.
Bain’s banking study said 320,000 people across the country would have more than 100,000 yuan in investable assets by the end of this year, representing a pool of 9 trillion yuan in assets.
Meanwhile, consumer confidence remains unusually high among the country’s rich, with 80 per cent of mainland millionaires saying the economic crisis had not hurt their lifestyle, Hurun said, citing 67 interviews done in February.
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