The world’s richest individuals distance themselves even further financially from the rest of the pack.
The world’s richest individuals distance themselves even further financially from the rest of the pack.
Despite the mood that has pervaded the lives and businesses of most people in the developed world in the past year, the world’s billionaires and millionaires have in fact got even richer. They now total 10 million individuals, who saw their overall wealth rocket 18.9% last year to $39 trillion — an almost ludicrously high figure, which flies in the face of the global recession.
While the relatively modest $1 million wealth bracket grew by 17%, the super rich (those with assets exceeding $30 million) did even better with their wealth increasing by 21.5%. This select financial elite had fortunes averaging $150 million each, which is particularly remarkable when you consider that the category begins at a ‘mere’ $30 million. For the average to be five times in excess of this, those at the top of the bracket must be very rich indeed.
This recent leap in the ultra rich’s collective wealth comes despite the fact that it was also the very rich who took the bigger hit in 2008, losing 245 of their fortunes. You need to be brave, it would seem, to play with the high-rollers.
The geographical distribution of the rich and very rich is also reflective of recent changes in global demographic structure. For the first time there were as many (three million) millionaires in Asia as there were in Europe, although Asia’s rich controlled $9.7 trillion at the end of 2009, compared with the $9.5 trillion held by their European counterparts. Japan had the second-largest group of millionaires, totalling 1.65 million, while Germany came in third, with 861,000. China came in fourth, with 477,000 millionaires, edging past Britain with 448,000. The millionaire’s sun is certainly rising in the East.
The ramifications for the luxury industry seem clear- there is profit to be made in a spectacular wealth category, which is increasingly separate from the rest of the world and apparently subject to their own economic mirco-climate. And while investment needs to be targeted geographically, it is perhaps emerging millionaire hubs that need to be targeted as much as whole emerging economies.
For wealth management companies the competition will be fierce but the rewards will also be enormous. But there are already signs that this trend is impacting at a fashion and retail level. LS recently spoke to a luxury jewellery designer who had been counter-intuitively advised by a senior industry expert to raise their prices, during this time of alleged penny pinching and luxury shame, in order to appeal to a demographic or consumer category that looked like it still had some growth in it — ‘the price insensitive’.
Rather than looking into cheaper diffusion lines, maybe luxury brands should be looking at stretching themselves to provide goods and services at the very top of the market. What could your brand do to appeal to the man or woman who has everything, and a fairly significant tranche of the world’s total wealth?
Sources
New York Times
