Turmoil among the rich consumers – Paul French

The important segment of rich Chinese sees a wide range of changes, splitting the group in at least three sections, tells retail analyst Paul French in Quartz. And all are planning better in how to spend their money as the fight against corruption turns serious.

Quartz:

China’s luxury market can be split into three groups, says Paul French, chief China market strategist for Mintel:

“You have the secretaries who can only afford a handbag, then the provincial new money types who are just discovering luxury and want to dress head to toe in Louis Vuitton—the Shanghainese call these people “potato dumplings.” Then there is this smaller, harder to define group right at the top. Everyone wants these customers as they have most of the money. But they are becoming more aware of being caught out for something by the [Communist] party disciplinarians or outed for extreme wealth on the internet.” …

China’s one-child policy has also influenced the move to sensible banking, French says. “The early entrepreneurs are getting old. They have only one child. If that child is not interested in or incapable of continuing the business, you have to list or sell the business and stash the money somewhere it can grow to keep your family rich for two to three generations.”

The leadership shift in China is convincing the wealthy elite to manage their money better too, French adds. “There is a sense that the period in China of just being able to accumulate vast sums of money is coming to an end. Someone in the party might even take your business away.”

More in Quartz.

Paul French is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.