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In 2017, China minted two new billionaires a week. A record that can be explained by the increasing number of entrepreneurs and the rising of real estate in China.
By Claire and Hélène
Chinese are the most numerous new entrants in the world ranking of billionaires in 2017 with a combined wealth of $1,340 billion. Li Ka-shing (Hong Kong businessman), with $33 billion, is first one, thanks to his real estate investments, according to a study published by the Swiss bank UBS and the auditing and consulting firm PWC.
The number of Chinese billionaires has risen to 373 in 2017 (from 318 in 2016), which is representing 20% of the total number of billionaires in the world in 2017, whereas this number was only 16 in 2006!
“In a milestone year, the number of Asian billionaires in our database exceeded the American billionaires one, for the first time. … Supported by the growth of Chinese entrepreneurs in an exceptional year, the number of Asian billionaires increased by nearly a quarter to 637” the report says.
Among these new billionaires, 97% are entrepreneurs, particularly in technology and distribution. The Chinese have created large, successful companies and have raised their standard of living.
The other side of the coin is that large fortunes are volatile. Indeed, economic development is fast but stock markets are irregular and political changes are common, making large fortunes vulnerable: about 34 people had fallen below the billion mark.
Worldwide, the fortune of billionaires increased by 19% to 89 00 billion dollars, held by 2,158 people.
Luxury hopes for fast development in China
These figures confirm important growth expectations for luxury products sales in China. They increased by about 20% in 2017, compared to €18 billion, the previous year, according to a study by Bain & Co consulting firm. This is the highest increase since 2011. And for 2018, Bain expects 15%. Especially thanks to the Chinese millennials.
According to the UBS study in partnership with PWC, billionaires own an average of just over $4.1 billion each, with an average age of 63,5 years, but ultra-connected Chinese city dwellers aged 20 to 34 also have very high purchasing power. They are major consumers of bags, cosmetics, ready-to-wear and also cars: in China, the average age of a Bentley buyer is 35 years.
It is in particular this generation that many luxury brands, that are constantly investing in China, are targeting. The country “remains a market in which we have a lot of hope” says Guillaume de Seynes, one of Hermès’ managers.
At the beginning of the year, the luxury saddler opened a new flagship in Hong Kong. But the luxury house is not forgetting mainland China, where it is growing at double-digit rates. It now has 23 stores and plans to set up this year in two new cities in the center of the country.
Galeries Lafayette also believes in it. Four years after Beijing, they are preparing to open their second store in China, precisely in Shanghai. And the group that is buying La Redoute does not intend to stop there. Its objective is to open about ten stores in the country’s six largest cities by 2025.
