China's superrich families push high-end consumption to $236b

Unaffected by the COVID-19 pandemic, China's superrich families' annual consumption slightly climbed in 2020, helping to uphold the total value of the Chinese high-end consumption to reach 1.53 trillion yuan ($236 billion) last year, according to the Hurun China Luxury Consumer Survey 2021 released on Thursday.

It is the 17th consecutive year that the Shanghai-based Hurun Research Institute has released the survey. A total of 409 high-net-worth individuals, two-thirds of whom live in first-tier cities, have been interviewed for the survey, with the average family assets value coming at 42 million yuan.

The average annual consumption equaled to 4.4 percent of the household asset value for the high–net-worth Chinese families in 2020, up 0.6 percentage points from a year earlier. For the ultra-high-net-worth families, average annual consumption accounted for 3.2 percent of their family wealth last year, up 0.6 percentage points from the figure in 2019.

With regard to the Chinese high-end consumption data recorded last year, luxury cars accounted for the majority 670 billion yuan last year, while traditional luxuries such as jewelries and clothing contributing 420 billion yuan. The market value of high-end electronic devices came at 180 billion yuan.

Rupert Hoogewerf, chairman and chief researcher of Hurun Research Institute, said the high-end consumers have undoubtedly grown into an important driving force for the world luxury industry, a trend especially noticeable over the past year.

Chinese domestic high-end consumption market, especially the traditional luxury market, has reported record high growth last year as overseas traveling has significantly fallen due to the epidemic. Almost all the world's leading luxury brands, best represented by Louis Vuitton, have seen their revenue in the Chinese mainland up by 50 percent year-on-year ever since the second quarter of 2020, said Hoogewerf.

"The Chinese mainland now accounts for one-third of the world's high-end consumption and the number is expected to reach 50 percent in five years' time," he added.

A majority 46 percent of the polled billionaires said they will increase the investment in family healthcare in the near future, followed by tourism and children's education.

The surveyed superriches' confidence in the country's economy has been elevated after the epidemic, with 47 percent of the interviewees saying "extremely confident in the Chinese economy", hitting a 10-year high. The high-net-worth individuals also projected that the benchmark Shanghai Composite Index will reach 3,660 points this year.

On the other hand, reducing overseas investment is high on the superriches' agendas in the following years, according to the survey.