China's affluent residents -- mostly urbanites, are in love with top retail brands as their rising disposable income offers them a diverse lifestyle, according to the latest findings of a Gallup poll.
The trend was discussed by Vice-Chairman of Gallup China Fang Xiaoguang and leading business executives at a culture roundtable held yesterday in Beijing as part of the Fortune Global Forum.
"We have found changing lifestyles for high-income families," Fang said.
The self-reported annual income for affluent families averaged 51,000 yuan (US$6,145) in 2004, compared with a national average of 11,600 yuan (US$1,397) and an urban average of 23,900 yuan (US$2,879), according to Fang.
High-income families account for 27 percent of all China's urban households, Gallup's nationwide survey found.
The report said these families had a larger demand for insurance, a heightened awareness of the benefits of college, increased mobility, a desire to invest in stocks and even second homes, as well as made frequent trips abroad.
"We see a marked increase in individualization -- high-income families and educated young people want to be different and are saying `never mind about saving any money, just live a life that suits my taste' instead of `work hard and get rich'," said Fang.
The expanding high-income sector is mostly concentrated along China's coast, the southern part of the Pearl River Delta and eastern sea ports as well as the Yangtze River Delta. Combined, these areas are home to more than 70 percent of all high-income families in China.
In terms of profession, a large number of the rich are in business, followed by people working for the government, Fang said.
The Gallup poll also asked respondents about their purchasing preferences, and found nearly half of the surveyed preferred to buy foreign branded products, a figure substantially higher than the national average.
But Vivienne Tam, head of a leading fashion house in the United States, said she believed brands made by Chinese had great appeal in China.
Tam's designs are much sought after in her native China.
"The fact that so many Chinese fans love my work has given me confidence," she said at the roundtable. "The Chinese market is changing, people will definitely embrace Chinese luxury brands, not just foreign brands."
Paolo Zegna, CEO of Ermenegildo Zegna Group, the world leader in luxury men's clothing, said there was no major difference between Chinese and foreign customers in other cities of the world.
The rapidly developing economy combined with consumption trends convinced the executive there was huge potential in China.
"We grew at a rate of 35 percent last year, and we are expected to grow 50 percent this year," he said.
With its customers among China's wealthiest citizens, the company has set up 54 shops in 29 Chinese cities following the opening of its first store in the country in 1991.
"Theoretically we can go pretty quickly with a very big number of shops in the future, but Chinese customers are becoming more demanding and want to have more choice and better services, therefore in the future instead of developing in number we'll develop in size," he said.
(China Daily May 17, 2005)
