In China and many other countries, it’s often thought that the wealthier the person, the less impacted they are by shocks and downturns in the economy. As 2023 has gone on, this appears to have changed. Monthly tracking data in Agility’s TrendLens™ study has shown a dramatic decline in optimism among Chinese high-net-worth individuals (HNWIs) across key indicators.

After an initial rebound in the first quarter of the year, when there was hope of the return of a strong re-opening following the zero-Covid period, Agility Research & Strategy (Agility) has seen a steady downward trend starting from around April of 2023 and continuing for the next six months.

With a sample of 2,000 Affluent individuals, including over 600 HNWIs (i.e. US dollar millionaires) now collected continuously, the 2023-24 TrendLens™ program gives a granular look at Chinese luxury consumers, with visibility on changes from month to month across the year.

Poor investment performance is certainly playing a role: Chinese HNWIs’ confidence in their real estate and financial investments has dropped by 27 points from February to April to the most recent 3-month period of July to September.

They are now less bullish about their investments than affluent consumers – it is the first time that Agility has registered such a situation since it began tracking data in 2016.

While the shift is being felt in the larger Tier 1 and 2 cities, by far, the sharpest drop-offs have been in China’s lower-tier cities, where sentiment is significantly downwards this year.

With this sobering news on Chinese millionaires, Agility noted several trends among them:

  • They are still spending on experiences: Of the areas where HNWIs are most likely to increase spending in the next six months, experience-related categories occupy four of the top seven – including entertainment, travel experiences, spas, and sports. Watches and fine jewellery also occupy high positions on their lists.
  • Quiet luxury is a thing for HNWIs: More than 3 in 5 HNWIs prefer buying items that are recognisable as being from a luxury brand but in a discreet way or with no logo at all. The trend is more stark among high-net-worth women (69%) and those over age 40 (70%).
  • Limited editions are motivating: The data from the TrendLens™ study shows HNWIs name limited editions or exclusive or rare items from luxury brands as the top factor motivating luxury purchases ahead of new products and collections and brand or product heritage or back-story. It is especially the case among Gen-Z and Millennial-aged millionaires, who are even more focused on limited editions than those in their 40s and above.
  • They are continuing to travel overseas and shop: Duty-free shopping is their #2 planned leisure activity during an overseas trip after culinary tours. More than half of HNWIs expect to go overseas to buy from many luxury categories – including watches, jewellery, handbags, and cosmetics – at equal or greater levels than they had prior to the pandemic.

In terms of leisure destinations, France, the United States, and the United Kingdom are their top three choices, followed by Australia, Germany, and South Korea.

As a pure shopping destination, Hong Kong is the favourite, followed by European destinations, including France. Sanya, Macau, and Italy share fourth place in the rankings.

Among domestic destinations, Sanya remains the most popular choice, followed by Yunnan and Shanghai.

“The dynamic and constantly changing environment makes it critical to stay on top of how luxury consumers feel, think, spend, and behave.”

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