Writer Michael Keller explores how China’s burgeoning wealthy class with impact the global economy and the experience of luxury travel to the Middle Kingdom.
Travelers who enjoy authentic experiences but first class indulgences know Hong Kong, Shanghai and Beijing are cities teeming with energy and enthusiasm. China is on a roll and this is not only changing the experience of travel within China but also the global landscape. Today, China’s expanding club of millionaires view luxury goods as indicators of a life lived well, and they want more; more great domestic experiences and more expensive foreign goods.
The number of Chinese with accrued wealth totaling at least 10 million yuan is now hovering just below the million-person mark and a large number of them are showing that their parents’ forced frugality is not in their genes. Instead, they are opting for the brands that have defined the good life for many a well-heeled westerner.
Shanghai-based luxury publishing company Hurun Report conducted a poll in 2010 that found China’s wealthy covet familiar names: Louis Vuitton, Cartier, and Gucci. They want to drive Rolls-Royce’s Phantom and wear a Patek Philippe on their wrist. And when it comes to drinks, they’ll shell out thousands for Bordeaux reds and cognacs.
They are young, averaging just 39 years old. Their average wealth is growing faster than their foreign counterparts. They travel and they golf; they send their children to Great Britain for secondary school and to the U.S. for university. They spend an average of 1.9 million yuan a year on luxuries. They each own three cars and 4.4 luxury watches. They are educated about what they want—gone are the days of using a broad brush to paint Chinese luxuries buyers as the nouveau riche.
”China’s millionaires are fast becoming sophisticated, and they are aspiring towards higher social status,” said Hurun Report founder Rupert Hoogewerf.
And there’s no plateau in sight indicating when the appetites of more and more Chinese citizens of means will begin to be appeased. Figures just released by International Wine and Spirit Research show that Chinese consumption of wine increased by 100 percent from 2005 to 2009. The good times are rolling for the new leisure class and they swallowed it down with nearly 96 million cases of wine last year. Reporting on the numbers, decanter.com said the country is expected to be drinking more than 126 million cases a year by 2014.
In Shanghai alone, wine imports increased by 51 percent in 2010 compared to the year before and the value of that imported product was 76 percent higher than the previous year, winechina.com reported.
While the country’s authorities proudly say that 90 percent of all wine consumed in China is produced domestically—a huge potential market pushing the biggest chateaux all over the world to try to gain a toehold by developing partnerships with Chinese vintners—that 10 percent remaining is still big stakes.
“We have an office in Hong Kong and I recently attended a team dinner there,” Gary Boom, with vintner Bordeaux Index, told The Daily Telegraph. “On every table in that restaurant was a bottle of wine. Young Chinese men and women were at the bar having a glass before their meal – 10 years ago they would have been drinking tea. We are selling £100,000 worth of wine a day to China.”
“The last decade could be characterized by the three words, ‘made in China’,” Gerard Lyons, the chief economist and group head of global research at Standard Chartered, told the Mail & Guardian. “In this next decade it will be ‘owned by China’