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Posted by: Frederik Balfour on July 02, 2008
Ooh la la! According to the 2008 Merrill Lynch and Capgemini World Wealth Report China now boasts more millionaires than France. At the end of last year China weighed in with a total of 414,900 people worth more than one million dollars excluding their principal residence, while France had only 394,000 of this group. China is now only behind the U.S., Japan, Germany and Britain in terms of High Net Worth Individuals, or HNWIs as the study calls them.
The way things are going, China could easily bump the U.K. from the number four slot soon. Last year the number of millionaires grew by an eye popping 20.3%, while Britain, with 495,000 HNWIs, saw their numbers grow by only 2.1%. India is also rising fast, minting 22.7% more millionaires last year for a total of 123,000.
This is obviously good news for private bankers who have been beefing up their presence in Asia. But you can bet they are being extra careful about who they sign up, considering the kind of hot water UBS has recently found itself over allegations it helped its wealthy clients evade U.S. taxes.
Okay. In a previous blog about the rich and super rich I promised to give you the skinny on how the fat wallet crowd enjoys its wealth. While I am well placed to give you anecdotal evidence from Hong Kong, the city that thrives on conspicuous consumption (see my BusinessWeek.com story about Coach), I will defer to the experts and share some more of Capgemini’s insights with you.
According to their breakdown of “passion dollars”, not only are they rich different from you and me, they are also different from one another. Old money, of course, behaves quite differently from new money, a rule that applies no matter where you are in world, Capgemini’s CEO of Consulting Technology Outsourcing Aurore Saglio-Thébault, tells me. That helps explain why the rich in Europe, that bastion of old-money, append 22% of their passion dollars on art collections, while Asia Pacific only spends 16%. Not surprisingly, Asians spend 19% on jewelry, gems and watches, while North Americans only spend 11%.
Asians also are big spenders on wellness, accounting for 14% of their passion dollars. That includes in home spas and massages. Maybe they need more pampering because they have to walk around draped in all that heavy jewelry. By contrast, Latin Americans only spend 7% in the same category.
When it comes to luxury collectibles, including rare automobiles, private jets and yachts, it pretty much doesn’t matter where you come from. Rich boys spend about 16% of their money on such toys.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.