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Chinese premium consumer market estimated to grow

Posted April. 03, 2024 07:41,   

Updated April. 03, 2024 07:41


Amidst the economic slowdown in China due to a sluggish real estate market and weakened consumer spending, it is forecasted that the premium consumer market, centered around the health and tourism industries, will continue to grow. In the smartphone brands preferred by Chinese high-net-worth individuals, Huawei surpassed Apple to claim the top spot.

Citing data from Hurun Research Institute, often referred to as the "Chinese Forbes," Taiwan's United Daily News reported that the premium consumer market in China is estimated to have grown by about 3% this year compared to last year, reaching approximately 1.66 trillion yuan (around 310 trillion won). The premium consumer market includes luxury automobiles (priced over 90 million won), luxury clothing, watches, jewelry, home appliances, luxury travel, and healthcare industries. Hurun Institute said, "Although the luxury automobile market has slightly decreased in size, rapid growth in the luxury travel industry and others has expanded the size of the overall market." For this survey, researchers polled 750 individuals with an average asset of 45 million yuan (approximately 8.3 billion won), including 33 ultra-high-net-worth individuals with assets exceeding 100 million yuan (about 18.6 billion won). The average age was reported to be 36 years old.

According to the survey, the investment areas that Chinese high-net-worth individuals plan to increase the most this year are gold, funds, and bank deposits. Many respondents indicated that they would reduce investments in real estate, such as residential properties and commercial buildings, reflecting concerns about the real estate market's instability.

Travel was the leisure activity most enjoyed by rich individuals. The surge of interest in travel seems to be a rebound demand from the lockdowns caused by the COVID-19 pandemic and the government's containment measures. Their average planned vacation days for this year increased to 24, two days longer than last year's 22.

Signaling a significant shift in consumer preferences, the '2024 Best Brands' ranking by Hurun revealed a surge in patriotic consumption. Huawei, a homegrown brand, has overtaken Apple as the top choice, a trend attributed to the ongoing power struggle between the United States and China and the government's ban on foreign smartphone brands for civil servants and state-owned enterprise employees.

Chul-Jung Kim tnf@donga.com