This week in the news, Hurun’s latest report examines where China’s wealthiest live, BMW is set to import electric cars to China, Chinese e-commerce could account for 50 percent of global retail in 10 years, Accor will open 30 hotels near Chinese tourist destinations, and Korean pop culture has had a considerable influence on Chinese shoppers.
China’s Wealthiest – Where Are They?
China has nearly 3 million high net worth individuals according to Hurun’s latest report, The Chinese Luxury Traveler 2014. The millionaires were placed in two categories, Dollar Millionaires (wealth of CNY 6 million) and Super Rich (wealth of CNY 100 million). The report shows that for Dollar Millionaires, the average age is 38, they are 60 percent male, and have an average annual income of US$500,000. As for where they live, 1.15 million of the Dollar millionaires live in first-tier cities, and the rest of the 2.9 million live in second and third-tier cities. The Super Rich have an average age of 39, 70 percent are male, and their annual income is over US$5 million. They are pretty evenly split among first through third-tier cities.
How BMW Is Helping China Go Green
In September, German premium automaker BMW will start importing electric cars to China. The entirely electric-powered BMW i3 sedan and plug-in hybrid i8 sports car will be sold initially in the cities of Beijing, Shanghai, northeastern Shenyang, and southern Shenzhen. The i3 starts at 450,000 yuan ($72,000) and is more affordable than electric car models by competitors such as Tesla Motors Inc and Volkswagen AG. Consumer interest in the car has been strong, with over 28,000 people who have already requested a test drive. China’s electric vehicle market is expected to grow due to the government’s plan to have 5 million hybrid and electric cars on the road by 2020 as part of an effort to reduce pollution and traffic congestion in major cities.
China’s E-Commerce Could Account for 50 Percent of Global Retail in 10 Years
E-commerce has increased considerably in China over the past few years, with the market growing by over 70 percent in the country since 2006. Between 2006 and 2010, growth rates reached over 100 percent. In 2013, consumers purchased 1.8 trillion yuan worth of products from online retailers, accounting for 7.9 percent of China’s entire retail trade. Although China contains 618 million Internet users, only about half of them shop online. A representative from KPMG China explains, “Even though China’s e-commerce market is big, it accounts for just 8 percent of the global retail market. In the next 10 years, it would account for over 50 percent of the retail market.”
Accor to Develop Over 30 New Hotels Near China’s Tourist Destinations
Accor, a French hotel operator, has plans to develop a third of its 100 new hotels near mainland tourist attractions in China. The company, which already has 128 locations globally, is quick on the heels of the growing and changing tourism industry. The company currently has a hotel on the North Korean border, one on Hainan Island, and one in the central Chinese forest park. New locations in mainland China will help the company to serve Chinese tourists which will be key as domestic trips are predicted to increase by 11 percent between 2013 and 2018. While traveling internationally, China’s tourists doled out $129 billion last year, raising their spending by 26 percent.
Korean Pop Culture’s Considerable Influence on Chinese Shoppers
Korean pop culture has taken China by storm, and it’s having a big influence on Chinese shoppers. The phenomenon, known as Hallyu, includes Korean pop artists and television shows, and retailers are starting to take notice. The Korean drama My Love From the Star has led to a shopping craze for products featured on the show and endorsed by its two stars Kim Soo-hyun and Gianna Jun, including beer and fried chicken, Jimmy Choo pumps, Yves Saint Laurent lipstick, and a Samsonite bag. Furthermore, six new Korean retailers have opened stores in Hong Kong during the first quarter of this year, triple the number that opened in the first quarter last year. South Korean cosmetic brands have also opened stores in Hong Kong over the last two years.
Image credit: wee khim/vogue china