Sea change witnessed in consumption patterns of wealthy individuals

Consumption patterns of wealthy individuals in China are undergoing a sea change with the focus shifting from materialistic purchases to family experiences like travel and food tastings, a new report said on Wednesday.

According to Hurun Report's 2019 Best of the Best, travel is the top entertainment option for rich Chinese individuals, with over 19 percent of the 465 surveyed super rich individuals opting for it as their favorite choice. Over the past 12 months, about 40 percent of the overseas trips made by high net worth individuals in China were for travel purposes, said the Shanghai-based research institute that monitors wealthy individuals. Tourism packages accounted for nearly 50 percent of their household expenses last year, the report said.

Reading was the second most popular recreation among the Chinese rich, followed by food tasting. High net worth individuals also attached greater importance to family activities, as 10 percent of the polled rich people ticked this option in the survey, the same as food tastings.

"In the past, the Chinese super rich spent a lot on cars, watches and handbags to show off their success. But now, they are willing to spend more on other activities," said Rupert Hoogewerf, founder and chief researcher of Hurun Report.

It is the 15th year in a row that Hurun has released this survey. The 465 super rich individuals interviewed for this year's report have an average personal wealth of at least 10 million yuan ($1.5 million), among which 84 have personal assets of over 100 million yuan.

However, the happiness index of the Chinese super rich hit a five-year low in the 2019 report. Mounting concerns over wealth and business were the two major reasons for this, explained Hoogewerf.

Regardless of the trade friction between China and the United States and rising uncertainties over economic growth, there were still 34 percent of the polled billionaires who remained "very confident" in China's economic outlook.

Avoiding risks was the prevalent investment concept in 2018, with 36 percent of the respondents favoring the trend, up from 33 percent a year earlier. This was mainly due to the sluggish stock market in 2018, said Hoogewerf.

Data from financial information provider Wind Info showed that the benchmark Shanghai Composite Index dropped by 24.59 percent in 2018.

Although the survey predicted that the Shanghai Composite Index will climb to 2740 points by the end of this year, it indicated that wealthy investors would opt for steady investment products such as fixed income products, gold, bank deposits and currency in the next three years.

Property will still be the most important investment option in the next two years, as over 42 percent of the respondents believe that property prices will rise steadily. However, overseas investment has continued to decline since 2017, the survey said.