China's rich spend on travel, health and education

China's wealthiest citizens are increasingly quality-conscious consumers who spend the bulk of their money on travel, healthcare and education for their children, new research has found. The study of nearly 900 of China's wealthiest individuals by the independent Hurun Report and China's Industrial Bank shows they own an average of three cars and four watches and take nearly three weeks of holiday a year.
"Quality is seen as the prime luxury good characteristic... reflective of a shift beyond seeing the luxury good as a status symbol," said the report, released this week. China has 2.7 million high net worth individuals, defined as those with personal assets of around $1.0 million, according to the report. They spend an average of three percent of their personal wealth annually with travel being the top lure, followed by luxury items and education for their children, it said.
"That represents a very high spending power," Rupert Hoogewerf, founder of the Hurun Report, told AFP. "That's the target for all the luxury brands, domestically and internationally." Future spending will be focused on travel and education, but healthcare is also rising to the top. "The three big needs of travel, education and healthcare seem to be the immediate focus of the Chinese entrepreneur," Hoogewerf said.
Nearly three-quarters of China's wealthy buy luxury goods in Hong Kong, the semi-autonomous region ruled by China which has become a shopping destination for mainland Chinese. And some 85 percent plan to send their children abroad to study, with a growing number choosing to opt for overseas education at an earlier age, it said.
The study also identified 63,500 ultra-high net worth individuals in China - defined as those people having assets of more than 100 million yuan ($16 million) - up from 60,000 last year. Some 13 percent of them want to buy private planes, it said. Despite their big spending, China's wealthy have grown more cautious with their money this year, given the slowing economy.