'Swarm' of Affluent Chinese Students in United States Boosts Luxury Business

Columbia University saw almost 600 Chinese students graduate this year. (Shutterstock) With graduation season in full swing in the United States, one group of grads in particular stands out: Chinese international students, whose numbers have soared in recent years. According to recent stats, nearly 600 Chinese students are among the 15,000 graduates obtaining degrees at Columbia University this semester. However, their numbers are even more impressive when looking at certain areas of study. Chinese international students account for an estimated 80 percent of statistics majors at Columbia. However, the number of Chinese students venturing to American schools to study subjects like art and fashion design continue to grow, with prestigious institutions like the Fashion Institute of Technology in New York seeing a rise in Chinese applicants. According to the Institute of International Education’s 2014 Open Doors Report, the number of Chinese international students in the United States increased 8 percent in the 2013-2014 school year, rising to 886,052. Currently, students from China account for nearly one-third of all international students, and this growth shows no signs of stopping. Total student enrollments from 2013-2014 jumped 17 percent, with undergraduates in particular rising 18 percent. This growth isn’t just seen at the collegiate level, however. Affluent Chinese in particular are sending their children to American schools at younger and younger ages. According to the Voice of America, more than 30,000 Chinese students currently attend American high schools as international students, some paying international student tuition of $50,000 per year. The rising tide of Chinese international students doesn’t just mean changing demographics at American institutions; it means big business for a wide range of companies—from realtors to luxury retailers. With many more recent Chinese arrivals going to universities in the country’s interior—at which admissions standards are lower than the high-profile Ivies—automobile sales to Chinese students are skyrocketing. According to a study by CNW Marketing Research, Chinese international students in the United States spent around $15.5 billion on new and used vehicles in the 2012-2013 school year. Over the same time period, a comparable group of American students spent an estimated $4.7 billion on vehicles. For wealthy parents back home in China, purchasing real estate for their children in the US is often seen as a worthwhile investment. As Jing Daily noted in its recent real estate report, Chinese purchases of international real estate in the year to March 2014 equaled $22 billion, up from $12.4 billion the previous year. Within the United States, just under one in four dollars spent on international real estate is from a Chinese person. And the Chinese are making waves in quality, not just quantity. The median home price for Chinese buyers is $523,148—more than double the median home price across the United States as a whole. This has been acutely noted in cities with significant numbers of Chinese international students. Several New York City real estate agents told Jing Daily that the neighborhoods around Columbia and New York University are particularly popular with Chinese investors—even ones whose children are nowhere near old enough to attend college. In response to the growing numbers of students in the United States, luxury retailers and malls have retooled strategies to engage these young consumers—who regularly outspend their American counterparts. As Benjamin Reid of Bergdorf Goodman told China Daily in February, during the Chinese New Year Holiday the luxury retailer catered to a Chinese "high schooler who came into the store to get a Chanel watch for her mother…She was in the city after touring colleges in the tri-state area, having visited Princeton, and she came here to shop." Avery Booker is a partner at China Luxury Advisors.

'Swarm' of Affluent Chinese Students in United States Boosts Luxury Business

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Published May 25, 2015

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'Swarm' of Affluent Chinese Students in United States Boosts Luxury Business