Think you know the affluent Asian consumer? Take this TRUE OR FALSE test and find out for yourself …
1. Affluent consumers are older people with family wealth - True or False?
In what Fortune magazine terms the "Goldilocks" economy, economic prosperity means that new wealth is being created at an unprecedented rate, and as a result, the face of the affluent consumer is changing across age, economic, and racial spectrums. With the rise of the new economy, the stock market 'whiz kids' and the Internet revolutionaries have created a new generation of young entrepreneurs who have taken their ideas and skills and become millionaires seemingly overnight.
The ‘emerging rich’ are no longer those having old family money. They are significantly younger people. And these ‘first-generation’ affluent are demonstrating a large appetite for luxury goods throughout Asia.
"As the majority of 'The Emerging Rich' did not grow up surrounded by the finer things, it is important for luxury marketers to enlighten them and expose them to the wonderful experiences awaiting them, because once they experience the good life, they are not going to go backpacking again." Says Pamela Fiori, editor in chief, Town & Country Magazine
2. Affluent consumers tend to spend rather than invest - True or False?
According to a recent Synovate study among 1,674 Hong Kong business decision makers, increasingly, affluent people are thinking about the long term investment rather than immediate luxury consumption. One of the reasons for this change could also the already high levels of ownership of luxury, personal and household products by the affluent class.
Facts - Fewer wealthy people in Hong Kong enjoy shopping as much as they did a year ago and more of them prefer to own property or invest in the financial markets. According to the HSBC China Affluent study, similar results can be seen in China where nearly 26% of all affluent people own a third home and (hold your breath) nearly 8% own a fourth home. There is also a growing market for investment advisory services which indicates that the affluent are increasingly enjoying the ‘thrills’ of participating in the volatility of the stock markets.
"Today, affluent consumers are far more interested in living well and smartly rather than keeping up with the Joneses" sums up Pam Danziger, author of the book, Why People Buy Things They Don't Need.
3. Affluent consumers are interested in acquiring ‘products’ - True or False?
Many affluent and older consumers today prefer experiences more than physical goods. They want to collect vivid and meaningful "experiences" to store as memories and exchange as "conversational currency."
They desire for luxury experiences - experiences that will make them feel special, whether it be a massage, a night out with fine dining and entertainment, or taking a luxurious vacation abroad. Parallely, many luxury products such as cars, jewelry or entertainment systems are capturing a declining portion of that total, as boomers “max out” on gadgets and gizmos and turn their attention to luxury experiences.
According to the American Express Platinum Luxury Survey, more than half of affluent consumers (59%) receive the greatest personal satisfaction from experiences, such as fine dining, travel, entertainment, cultural/arts events and sporting events. In the same survey, only 21% of those surveyed say they get the greatest satisfaction from personal luxuries, such as automobiles, fashion and jewelry!
This can also be evidenced in that higher-quality magazines focusing on lifestyle experiences such as Harper’s Bazaar, GQ, Vogue and Entertaining & Travel have bucked the general downturn in the magazine market and have been successful in the most recent Roy Morgan Readership survey in Australia.
4. Affluent consumers have a relatively relaxed lifestyle - True or False?
Affluent people of today lead a very demanding 24 X 7 lifestyle. They work exceedingly hard and expect their relaxation to be just as challenging and demanding. The dichotomy of the new affluent consumer is captured in a single statement—“the more they make, the more they expect from life"
According to a study among affluent audiences, more than 50% of all respondents had less than 2 hours daily (on an average) as leisure time and most of them prefer spending it with their families. Interestingly, only 5% of all respondents had more than 7 hours daily for leisure. Surely, this is a ‘workaholic’ affluent audience
5. Affluent consumers seek exclusivity and envy - True or False?
Affluent consumers are paying a premium for authenticity over exclusivity and envy. Authenticity has manifested in authentic products with natural materials and authentic experiences such as adventure and eco travel, arts and culture, food and wine, spas and wellness, and even their vacation homes.
They today want products to contain authentic stories that will enable them to narrate their own experiences, and, in many cases, for the purpose of impressing others. Expect to see more honest (albeit poetically enhanced) stories about amenities, destinations, properties, local history, and authentic experiences.
An excerpt from the brochure of India’s most expensive Spa in the Himalayas serves as a good example – “This lodge is handcrafted with architectural elements designed by local artisans as a testament to generations of traditional craftsmanship. The timbers harvested from this property have been used in every room.”
6. Affluent consumers seek to have more money - True or False?
“Money isn't everything to world's wealthy" says the AmEx / Roper ASW global affluent study among 11,000 consumers in over eleven countries - about half of high income consumers around the world would choose to have more time in their lives, rather than more money. Even in money-driven Hong Kong, more than 37 % of all affluent consumers preferred time.
"In the real world, affluent consumers aren't relaxing poolside or eating bonbons," said Peggy Maher, VP / GM at AmEx "They're working long hours, juggling personal and professional lives, and are constantly pressed for time."
Hence, time is becoming a big desirable in 2008 - a scarce resource and the new status symbol. Affluent consumers crave quality time for themselves and to spend with friends and family. These consumers now dedicate specific weeks every year to reconnect with others close to them and consume ‘new’ experiences.
7. Affluent consumers do not reduce spending in tight economic conditions - True or False?
Many affluent consumers are also tightening their belts. They now prefer to ‘fractionally’ own their luxury goods. And this trend also means that so many affluent consumers are also turning into mini-entrepreneurs. See this as a further evolution of the person to person marketplace – an eBay for the rich and the famous.
In the current real estate market, rich individuals are now looking to fractionalize their very own vacation home (see Luxuryfractionalguide.com for more details). Expect to see more hybrid fractional real estate alternatives that are consumer friendly and consumer driven.
“Luxury-goods purchases dropped 21 percent for each affluent consumer, while spending on buying and renting experiences gained 11 percent in the third quarter of 2007 according to research firm, Unity Marketing. These data display the undeniable interest in luxury access without luxury ownership,” comments Susan Kime, President of KIMEDIA, LLC, and expert in the fractional luxury field.
8. Affluent consumers are about self-centered indulgence - True or False?
Affluent consumers are moving beyond self centered indulgence and are increasingly enticed by ‘eco-goodness’ and its impact on their leisure habits.
In a HSBC China Affluent study among over 15,000 respondents, Being Green was the second most important variable affecting buying decisions (with a score of 4.45 out of 5). The only variable that scored more in affecting buying decisions was convenience and overcoming time constraints (4.55 out of 5).
Hence, learning the rules of green marketing and committing to environmental sensitivity is paramount for the luxury marketer. Expect to see more green buildings, newspaper and jute bags, water conservation, energy efficiency, hybrid luxury cars, etc. as green consciousness becomes more prevalent.
9. Affluent Asian consumers look westwards to Europe / America for emulation - True or False?
Till date, the luxury goods market in Asia has been dominated by products primarily designed for the Western market and ‘imported’ into Asia.
As the luxury consumer matures beyond ‘status’ and gets further refined on dimensions such as discernment, taste, indulgence etc., there is a resurgence of interest and pride in their own culture.
Opportunities now exist in varied areas of luxury products like Chinese antiques, Japanese tea tables, Indian traditional jewelry, Jade statuettes and even real estate in a traditional style (Si He Yuan).
In sum, if you desire to get a grip on today’s affluent consumer ...
Start by bunking the myth that they are one-dimensional people with old family wealth seeking to own luxury products.
Instead, start thinking of them as ...People who seek life-enriching experiences; want to be assured of style and quality; need to be stimulated by new and different situations; want to be recognized as knowledgeable and worldly; are not afraid of the unfamiliar, offbeat, or exotic; have a global perspective; enjoy regionally authentic products; have a predisposition to nostalgia; do not purchase luxuries purely for materialistic reasons; have a social conscience and appreciate doing business with organizations that have a true social commitment; have a strong influence on the buying decisions of peers; consider spirituality and religion as an integral part of life; are quick to seek out information online; desire ways to simplify life; and are always pursuing more of life's most essential luxury—time.
Feel breathless?
For those who still want to check their scores on the above test
TRUE – Zero and FALSE – Nine !
1. Affluent consumers are older people with family wealth - True or False?
In what Fortune magazine terms the "Goldilocks" economy, economic prosperity means that new wealth is being created at an unprecedented rate, and as a result, the face of the affluent consumer is changing across age, economic, and racial spectrums. With the rise of the new economy, the stock market 'whiz kids' and the Internet revolutionaries have created a new generation of young entrepreneurs who have taken their ideas and skills and become millionaires seemingly overnight.
The ‘emerging rich’ are no longer those having old family money. They are significantly younger people. And these ‘first-generation’ affluent are demonstrating a large appetite for luxury goods throughout Asia.
"As the majority of 'The Emerging Rich' did not grow up surrounded by the finer things, it is important for luxury marketers to enlighten them and expose them to the wonderful experiences awaiting them, because once they experience the good life, they are not going to go backpacking again." Says Pamela Fiori, editor in chief, Town & Country Magazine
2. Affluent consumers tend to spend rather than invest - True or False?
According to a recent Synovate study among 1,674 Hong Kong business decision makers, increasingly, affluent people are thinking about the long term investment rather than immediate luxury consumption. One of the reasons for this change could also the already high levels of ownership of luxury, personal and household products by the affluent class.
Facts - Fewer wealthy people in Hong Kong enjoy shopping as much as they did a year ago and more of them prefer to own property or invest in the financial markets. According to the HSBC China Affluent study, similar results can be seen in China where nearly 26% of all affluent people own a third home and (hold your breath) nearly 8% own a fourth home. There is also a growing market for investment advisory services which indicates that the affluent are increasingly enjoying the ‘thrills’ of participating in the volatility of the stock markets.
"Today, affluent consumers are far more interested in living well and smartly rather than keeping up with the Joneses" sums up Pam Danziger, author of the book, Why People Buy Things They Don't Need.
3. Affluent consumers are interested in acquiring ‘products’ - True or False?
Many affluent and older consumers today prefer experiences more than physical goods. They want to collect vivid and meaningful "experiences" to store as memories and exchange as "conversational currency."
They desire for luxury experiences - experiences that will make them feel special, whether it be a massage, a night out with fine dining and entertainment, or taking a luxurious vacation abroad. Parallely, many luxury products such as cars, jewelry or entertainment systems are capturing a declining portion of that total, as boomers “max out” on gadgets and gizmos and turn their attention to luxury experiences.
According to the American Express Platinum Luxury Survey, more than half of affluent consumers (59%) receive the greatest personal satisfaction from experiences, such as fine dining, travel, entertainment, cultural/arts events and sporting events. In the same survey, only 21% of those surveyed say they get the greatest satisfaction from personal luxuries, such as automobiles, fashion and jewelry!
This can also be evidenced in that higher-quality magazines focusing on lifestyle experiences such as Harper’s Bazaar, GQ, Vogue and Entertaining & Travel have bucked the general downturn in the magazine market and have been successful in the most recent Roy Morgan Readership survey in Australia.
4. Affluent consumers have a relatively relaxed lifestyle - True or False?
Affluent people of today lead a very demanding 24 X 7 lifestyle. They work exceedingly hard and expect their relaxation to be just as challenging and demanding. The dichotomy of the new affluent consumer is captured in a single statement—“the more they make, the more they expect from life"
According to a study among affluent audiences, more than 50% of all respondents had less than 2 hours daily (on an average) as leisure time and most of them prefer spending it with their families. Interestingly, only 5% of all respondents had more than 7 hours daily for leisure. Surely, this is a ‘workaholic’ affluent audience
5. Affluent consumers seek exclusivity and envy - True or False?
Affluent consumers are paying a premium for authenticity over exclusivity and envy. Authenticity has manifested in authentic products with natural materials and authentic experiences such as adventure and eco travel, arts and culture, food and wine, spas and wellness, and even their vacation homes.
They today want products to contain authentic stories that will enable them to narrate their own experiences, and, in many cases, for the purpose of impressing others. Expect to see more honest (albeit poetically enhanced) stories about amenities, destinations, properties, local history, and authentic experiences.
An excerpt from the brochure of India’s most expensive Spa in the Himalayas serves as a good example – “This lodge is handcrafted with architectural elements designed by local artisans as a testament to generations of traditional craftsmanship. The timbers harvested from this property have been used in every room.”
6. Affluent consumers seek to have more money - True or False?
“Money isn't everything to world's wealthy" says the AmEx / Roper ASW global affluent study among 11,000 consumers in over eleven countries - about half of high income consumers around the world would choose to have more time in their lives, rather than more money. Even in money-driven Hong Kong, more than 37 % of all affluent consumers preferred time.
"In the real world, affluent consumers aren't relaxing poolside or eating bonbons," said Peggy Maher, VP / GM at AmEx "They're working long hours, juggling personal and professional lives, and are constantly pressed for time."
Hence, time is becoming a big desirable in 2008 - a scarce resource and the new status symbol. Affluent consumers crave quality time for themselves and to spend with friends and family. These consumers now dedicate specific weeks every year to reconnect with others close to them and consume ‘new’ experiences.
7. Affluent consumers do not reduce spending in tight economic conditions - True or False?
Many affluent consumers are also tightening their belts. They now prefer to ‘fractionally’ own their luxury goods. And this trend also means that so many affluent consumers are also turning into mini-entrepreneurs. See this as a further evolution of the person to person marketplace – an eBay for the rich and the famous.
In the current real estate market, rich individuals are now looking to fractionalize their very own vacation home (see Luxuryfractionalguide.com for more details). Expect to see more hybrid fractional real estate alternatives that are consumer friendly and consumer driven.
“Luxury-goods purchases dropped 21 percent for each affluent consumer, while spending on buying and renting experiences gained 11 percent in the third quarter of 2007 according to research firm, Unity Marketing. These data display the undeniable interest in luxury access without luxury ownership,” comments Susan Kime, President of KIMEDIA, LLC, and expert in the fractional luxury field.
8. Affluent consumers are about self-centered indulgence - True or False?
Affluent consumers are moving beyond self centered indulgence and are increasingly enticed by ‘eco-goodness’ and its impact on their leisure habits.
In a HSBC China Affluent study among over 15,000 respondents, Being Green was the second most important variable affecting buying decisions (with a score of 4.45 out of 5). The only variable that scored more in affecting buying decisions was convenience and overcoming time constraints (4.55 out of 5).
Hence, learning the rules of green marketing and committing to environmental sensitivity is paramount for the luxury marketer. Expect to see more green buildings, newspaper and jute bags, water conservation, energy efficiency, hybrid luxury cars, etc. as green consciousness becomes more prevalent.
9. Affluent Asian consumers look westwards to Europe / America for emulation - True or False?
Till date, the luxury goods market in Asia has been dominated by products primarily designed for the Western market and ‘imported’ into Asia.
As the luxury consumer matures beyond ‘status’ and gets further refined on dimensions such as discernment, taste, indulgence etc., there is a resurgence of interest and pride in their own culture.
Opportunities now exist in varied areas of luxury products like Chinese antiques, Japanese tea tables, Indian traditional jewelry, Jade statuettes and even real estate in a traditional style (Si He Yuan).
In sum, if you desire to get a grip on today’s affluent consumer ...
Start by bunking the myth that they are one-dimensional people with old family wealth seeking to own luxury products.
Instead, start thinking of them as ...People who seek life-enriching experiences; want to be assured of style and quality; need to be stimulated by new and different situations; want to be recognized as knowledgeable and worldly; are not afraid of the unfamiliar, offbeat, or exotic; have a global perspective; enjoy regionally authentic products; have a predisposition to nostalgia; do not purchase luxuries purely for materialistic reasons; have a social conscience and appreciate doing business with organizations that have a true social commitment; have a strong influence on the buying decisions of peers; consider spirituality and religion as an integral part of life; are quick to seek out information online; desire ways to simplify life; and are always pursuing more of life's most essential luxury—time.
Feel breathless?
For those who still want to check their scores on the above test
TRUE – Zero and FALSE – Nine !
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