ASIADCMEMBER

Travel, gems favoured by Asia's rising millionaires: study
1 hour ago

Asia's millionaires allocate the most to luxury and "experiential" travel, visits to high-end spas, and designer clothes, they said.




SINGAPORE (AFP) — India and China have the world's fastest-growing populations of millionaires, with a penchant for luxury travel, gems and designer clothes, a study released in Asia on Wednesday said.

The number of Indian millionaires jumped 22.7 percent last year to 123,000, followed by China where the number of high rollers rose 20.3 percent to 415,000, said the 12th annual World Wealth Report, prepared by US investment bank Merrill Lynch and information technology group Capgemini.

"In the Asia Pacific region, wealth is being created at an unprecedented rate," said Kong Eng Huat, South Asia market managing director at Merrill Lynch Global Wealth Management.

"Notwithstanding the recent dislocation in global markets, the robust economies in Asia are increasingly being driven by the domestic consumption story and continue to spur wealth creation in the region."

The report said China surpassed France as the world's fifth-largest population of High Net Worth Individuals (HNWIs), people with net assets of at least one million US dollars excluding their primary residence.

Also among the fastest-growing were South Korea, where the millionaire population rose by 18.9 percent to 118,000, and Indonesia, which saw a 16.8 percent rise to 23,000, the report said.

Singapore saw a 15.3 percent rise to 77,000 millionaires, it added.

Despite financial turmoil and significant increases in the price of luxury goods, the report said the world's millionaires have an "unquenchable appetite" for luxury items.

Jewelry, gems and watches attracted the largest share of these "passion investment allocations" in Asia and the Middle East, the report said.

Globally, these high-priced toys tend to be art collections, yachts, personal jets and similar items, Merrill Lynch and Capgemini said.

But there are regional differences. Asia's millionaires allocate the most to luxury and "experiential" travel, visits to high-end spas, and designer clothes, they said.

With millionaires holding a significant portion of their wealth in stock markets, market capitalisation performance is an important determinant of millionaire wealth generation, the report said.

Growth in traditional stock exchanges slowed last year but rose in several emerging market exchanges, particularly those in China and India, it said.

India's millionaire growth was boosted by market capitalisation expansion of 118 percent and real GDP growth of 7.9 percent, it said.

"Once recognised as a manufacturing superpower, characteristic of a more nascent market, much of India's recent growth has been driven by the technology, financial services, property, construction and infrastructure sectors," the Wealth Report said.

In China, GDP grew 11.4 percent last year and market capitalisation rose by 291 percent but the country's economy is still built on manufacturing, it said.

"This helps explain why its HNWI population growth is slower than that of India -- and why the gap continues to widen between China's richest citizens, a group with a particularly high concentration of wealth, and the middle-class."

In third place behind India and China, Brazil had the third-fastest growth in millionaires, Merrill Lynch and Capgemini said, adding that half of the 10 nations with the fastest-growing millionaire populations were in Asia.

It said assets held overall by the world's millionaires soared 9.4 percent to 40.7 trillion US dollars last year, with the average exceeding 4.0 million dollars for the first time.

ASIADCMEMBER

Someone should give Exclusive a run for its money in Asia

DC4MS

If ER, UE, or Quintess was smart...they would be exploring this market. It may be out of reach for the other clubs as this is an expensive venture.

Thanks for the news update. Where in Asia are you?

Jack

Is banyon tree not considered a asian DC?

ASIADCMEMBER

Banyan Tree is like a loan to the Group. There is no clear path to redemption---you have to sell it yourself to someone. Since the supply is unlimited--there is a very high likely that without a secondary market--you may only get back 50%

Also, their expecation is that after you have used it for 7 years you will "Break even"

Jack

I am sure there are great places to go in asia and surrounding areas. I think ti would be hard for a ER to come in and sign people on when most of their destinations are US based and too far if I lived in asia. You would have to start the DC in Asia

Kagehitokiri

as OP said in 2nd post >

lusso and quintess have stated they are considering starting additional regionally based clubs.

if ER and UE wanted to maximize expansion/scale/etc, they would be offering properties in asia and other parts of the world, to target potential members in those markets, like DHH management has discussed.

i find it odd that DCs state their members have such high average net worths, but do not deliver a truly global product in terms of destinations. (not including the non-residential partners)

DC4MS

Let's not forget that that may already be someone in Asia that is considering this idea.

There are TONS of successful business in Asia that are "clones" of American businesses....especially the Internet sites.

There are Chinese clones of Yahoo, Google, facebook, eBay, YouTube and they are making hundreds of millions of dollars.

It is reasonable to assume that someone located in Asia may already be onto this idea....if not the someone here should pitch the idea to a wealthy Asian.

Be Careful - Here is an interesting story about a shopping mall in China "The South China mall" that is 99.2% UNOCCUPIED and is a HUGE failure.

The seven-million square foot South China Mall is a flop of historical significance. Imagine combining New Coke, The Ford Edsel and O-Town's second album in a blender, and then building a mall out of it. The mall opened in 2005 with space for 1,500 stores and is currently home to around 12. That's a vacancy rate of 99.2%.

Mall of misfortune - The National Newspaper

ASIADCMEMBER

For companies that count the HNWI and U-HNWIs as their main client, the message is clear. Go East, or perish.


What The World's Wealthiest Buy
Lauren Sherman, 06.25.08, 6:05 PM ET


In Depth: What The World's Wealthiest Buy

By This Author

Lauren Sherman

U.S. consumer confidence may be at its lowest in 16 years, but the world's ultra-rich who like to spend their money on things or experiences that will enhance their lifestyle, such as travel or jewelry, aren't deterred by the shaky economy.

That's according to the 2008 World Wealth Report, released today by financial management firm Merrill Lynch (nyse: MER - news - people ) and consulting company Capgemini. It studied the 2007 spending habits of the world's richest people. Capgemini and Merrill Lynch define High Net Worth Individuals (HNWI) as those with at least $1 million in financial assets, excluding collectibles, consumables, consumer durables and primary residences. Ultra-High Net Worth Individuals (U-HNWI) hold at least $30 million in financial assets, excluding the same variables.

Unsurprisingly, what millionaires--and billionaires--buy is segmented by region. Those in Europe and Latin America spent the most money on art, while travel and luxury collectibles--such as yachts, jets or cars--were most important to Americans.

In Depth: What The World's Wealthiest Buy
Those in Asia-Pacific indulged most in gems, jewelry and watches, while the Middle East's richest dabbled in a bit of everything: They allocated a similar percentage of their wealth to several categories of what the report calls "passion investments." (Or in laymen's terms, money spent on luxuries, from travel to fashion to art.) From luxury collectibles to consumables--such as clothing, handbags and wine--to travel and accessories, those in the Middle East weren't partial to a specific passion.

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The report also touched upon the fact that North America still has the most millionaires in the world: 3.3 million. But the percentage of growth from 2006-2007 was just 3%, whereas the Middle East saw a 33% growth--to 400,000 millionaires--during the same period. Asia-Pacific's number grew to 2.8 million, a 7.7% increase from 2006. Ileana van der Linde, a principal in Capgemini's wealth department, says that Asia will have the highest number of millionaires by 2012.

What are you buying? Weigh in. Post your thoughts in the Readers Comments section below.

These numbers represent a shift in global spending and market share. James Chung, president of Slingerlands, N.Y.-based Reach Advisors, a marketing strategy and research firm focused on the wealthiest half-percent of Americans, says that global companies that sell luxury goods and experiences must now focus their efforts on the East. Those that already have a hold on emerging markets, including Richemont and LVMH (other-otc: LVMH - news - people ), are seeing better quarterly results as the U.S. market continues to weaken. Swiss luxury goods giant Richemont reported an 18% rise in its fiscal year profit to 1.57 billion euros ($2.4 billion) in May 2008. In April 2008, French conglomerate LVMH reported a first-quarter revenue of 4 billion euros ($6.2 billion) in the quarter, up from 3.8 billion ($5.1 billion at the then-current exchange rate) a year earlier.

"[In the U.S.], the personal luxury arms race is over," says Chung. "It's not that people aren't spending, but when they do it's because of its inherent value, not because it's a good investment that's going to make them money five years down the line. They're not trying to keep up with the Joneses as much. They're buying things because they want to enjoy them, or let their family enjoy them."

For companies that count the HNWI and U-HNWIs as their main client, the message is clear. Go East, or perish.

Kagehitokiri

ASIADCMEMBER,

what kind of things should DCs look for in developments? freehold and allows private nightly rentals?

also, would you want metropolitan in addition to southeast asian beach/leisure? only mountain i know of might be the upcoming capella in japan, with ski-in/out villas IIRC.

the only value for banyan tree PC right now is seychelles, especially over XMAS/NYE if thats possible.

ASIADCMEMBER

I think Destination Clubs work in Asia if they catch onto the concept that people need space. Most of the wealth in Asia is concentrated in cities and most people live in condos 3-4 bedroom multi-million dollars so free standing multi rooms homes with private swimming pools would be extremely attractive. Also wealthy families tend to have maids and live-in help, so if people were building homes or enclaves for asians--they should probably include maid quarters. With enclaves--the DC clubs could even consider live-in quarters so that people could bring their help. Golf in asia (like the US) is very important so homes on or near golf courses are attractive so that is an important consideration.
Skiing is a foreign concept in asia and although some families may go skiing in japan, or korea--most wealthy people do not ski on a regular basis. If a club had boats--I think that would be quite popular.





finally an equity model probably works better in Asia, because people are still tied into the concept of ownership, so an equity club would do better than a non equity club-
also corporate memberships would do very well because most public companies and majority of private companies are family owned so corporations would buy corporate memberships put it on balance sheet and give it to extended family to use.

Kagehitokiri

ive noticed that metropolitan penthouses/condos with private pools are becoming increasingly common in SE asia.