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While China has been the source of the global luxury industry’s most important customer bloc for years, the Asia-Pacific region is officially the global center for high-net-worth individuals (HNWIs) this year.
According to Capgemini’s newly published “Asia-Pacific Wealth Report 2015,” Asia now boasts the highest number of HNWIs in the world after it surpassed North America this year. The HNWI population in Asia grew by 8.5 percent to reach a total of 4.7 million people, marking the second time in four years it has surged past North America. The region is set to see the world’s highest growth of HNWIs through at least 2017, with 10.3 percent growth compared to 6.7 percent for the rest of the world.
This acceleration was driven in large part by China, which saw its HNWI population rise from 758,000 in 2013 to 890,000 in 2014, according to the report. Excluding growth numbers for Japan’s mature economy, Asia’s wealthy population grew by 12.3 percent, with the total amount of overall investable wealth grew even faster at 14.5 percent. China and India combined have accounted for 43 percent of the US$7.4 trillion in new HNWI wealth added to Asia since 2006.
China’s current economic setbacks don’t mean there isn’t long-term growth potential, argues the report. “While these markets, especially China, are experiencing short-term challenges such as slower growth, higher levels of state ownership, and a need for robust infrastructure to support rapid urbanization, they are still expected to witness strong growth and wealth creation over the long term,” it says.
These statistics make it clear that the global luxury industry is getting deeper into an “Asian era” in which the preferences, tastes, and spending habits of Asia’s rich will continue to be an increasingly defining factor for brands’ global growth rates. The impacts are important not only within the Asia-Pacific region, but also in Europe and North America as they welcome China’s jet-setting wealthy visitors.