This is the fourth wealth report by Hurun and the second consecutive report working in association with GroupM Knowledge, the knowledge management arm of GroupM, the world's number one media investment management operation.

The report analyses the number of millionaires broken down according to their regional distribution across China, including analysis of their investments, consumption trends, charitable donations, social responsibilities, and media use. For the first time, this report also includes research on the media placement of high-end brands.

Rupert Hoogewerf, Chaiman and Chief Researcher of Hurun Report, said, "As China is set to become the world's biggest market for luxury, it is critical to understand the Chinese luxury consumer."

Eve Lo, Chief Knowledge Officer, GroupM China, said, "Understanding the behavior, attitudes and preferences of the wealthy class will help luxury brands to actively connect and engage with Chinese millionaires and their unique lifestyles.  With luxury consumption as one of the main drivers of the Chinese consumer market, such insights into the world of the super-rich are invaluable to brands."

Chinese individuals with more than RMB 10 million (equivalent to US$1.6 million) broke through the one million mark for the first time, reaching a record 1,020,000 individuals, an increase of 6.3% over the previous year. Furthermore, China is home to 63,500 super-rich, defined as individuals with RMB 100 million (equivalent to US$16 million), an increase of 5.8% from that of last year.

At present, for every 1300 persons in China, there exists one millionaire. As of the end of 2010, there were 960,000 millionaires and 60,000 super-rich, whilst the end of 2009 recorded 875,000 millionaires and 55,000 super-rich.

The report denotes China's millionaires as those with personal wealth of RMB 10 million or more. The report takes into account both fixed assets and investable assets. Fixed assets include self-owned listed or unlisted stock rights, owner-occupied real estate, and investment real estate. Investable assets consist of shares, funds, debenture shares, deposits and insurance.

Hurun Reportconducted face-to-face interviews with 503 of these millionaires, including 54 billionaires. The findings provide a fascinating insight into the demographics and lifestyles of wealthy Chinese.

84% of China's wealthiest individuals were concentrated in the Eastern, Northern and Southern regions of China. Beijing is home to the most number of China's wealthy individuals, with 179,000 millionaires and 10,500 super-rich. Guangdong follows closely behind in second, with 167,000 millionaires and 9,500 super-rich. Coming in third is Shanghai, with 140,000 millionaires and 8,200 super-rich.

Rising property prices and a fast-growing GDP have been the key drivers for the growth in the number of Chinese millionaires. In 2011, China's GDP grew by 9.2%. Property prices in 2010 rose across the country by 13.7% according to a report published by China's National Bureau of Statistics, with luxury property prices rising even faster – luxury property prices in Shanghai are up 21% from last year.

Travel is the biggest area of consumption for the Chinese millionaire. They spend an average break of 20 days a year. The main reasons for going abroad are holidays and business. Sanya (Hainan Island), Hong Kong and Yunnan are the top three destinations in China, while France continues to be the most popular international destination, followed by the US and Australia.

Although the consumption of luxury goods is still a predominant habit amongst the rich and super-rich, this year saw an increasing number of millionaires begin to pursue a low-key lifestyle. Spending on their children's education continues to increase, with a clear preference towards sending their children abroad. This is accompanied by the rise of emigration out of China and investment in overseas real estate.

Although new housing market regulation policies were introduced in 2011, resulting in a downturn in the domestic real estate market, buying property, however, is still the preferred investment choice for millionaires, with interest in fixed income and stock investments also on the rise.

The importance and emphasis which Chinese millionaires place towards education is reflected in more than 85% of millionaires planning to send their children abroad for education, whilst among billionaires, this figure is 90%. The United States, the United Kingdom and Canada are the favorite destinations for education, while Canada, the United States and Singapore are the favorite destinations for immigration purposes.

More than 16% Chinese millionaires have already emigrated or have already submitted immigration applications, while 44% have plans to do so in the near future. The boom in overseas education for their children and a desire to live abroad has driven Chinese millionaires to invest more readily overseas. One third of millionaires own investable assets overseas, with this figure reaching 55% for millionaires in Southern China. Overseas assets account for 19% of millionaires' total assets.

Comparing media investment of Top 10 luxury brands across different categories, the cosmetics category ranked 1st, with television being the key media type accounting for 76% of its media investment.

The alcohol category came in 2nd place with almost 90% of its total media investment on television, driven mostly by local premium alcohol brands. The property category preferred media exposure on newspapers while the jewellry category invested almost 60% on television.

Finally, the watch category invested quite evenly across television, newspapers and magazines.

GroupM Knowledge - Hurun Wealth Report 2012
Rich and Super-Rich Broken Down by Region




* Not including Hong Kong, Taiwan and Macau

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