1. Chapter 23. The Nouveau Riche Section 4. Needs, Value and Aspiration The Chinese Way, Ding and Xu, 2014 Chapter 23. The Nouveau Riche 1

2. Outline Introduction Defining the nouveau riche Preferences and behaviors of the nouveau riche Road ahead 2 The Chinese Way, Ding and Xu, 2014 Chapter 23. The Nouveau Riche

3. Introduction As wealth accumulation has become the dominant life objective, the wealthy have become trendsetters of China. The current lifestyles of the wealthy may serve as reference for the aspirations of the Chinese people. 3 The Chinese Way, Ding and Xu, 2014 Chapter 23. The Nouveau Riche

4. Defining the nouveau riche In China, those who are considered to be wealthy can be divided into four classes based on net worth: ⁻RMB 10 billion ⁻RMB 1 billion (threshold, truly revered, e.g., 89% are self-made, much higher than the worldwide average of 60%); ⁻RMB 100 million (typically entrepreneurs); ⁻RMB 10 million (1.05 million, most by investing in real estate). Most of these four classes have acquired their wealth during the last 20 to 30 years. ⁻no “old money” role models to pattern their lifestyle; ⁻constantly evolving desires and aspirations. 4 The Chinese Way, Ding and Xu, 2014 Chapter 23. The Nouveau Riche

5. Preferences and behaviors of the nouveau riche Stereotype: traditionally, the affluent engage in conspicuous consumption to show off their wealth and social status. Exception: “people in 10 billion group may dress like factory workers” by our informant 5 The Chinese Way, Ding and Xu, 2014 Chapter 23. The Nouveau Riche

6. Preferences and behaviors of the nouveau riche As the wealthy class has matured, so have their tastes and consumption habits. The GroupM Knowledge–Hurun Wealth Report 2013 revealed some interesting statistics about Chinese multimillionaires: ⁻43% possess a master’s degree or higher, or an EMBA; ⁻own three limousines and four luxury watches, on average; ⁻go abroad an average of 2.8 times per year, and travel for business 7.5 days per month; ⁻they take an average of 20 vacation days per year; ⁻enjoy travel, reading, drinking tea, and playing sports such as swimming and golf for leisure; The Chinese Way, Ding and Xu, 2014 Chapter 23. The Nouveau Riche 6

7. Preferences and behaviors of the nouveau riche ⁻more than 70% have physical examinations regularly, and about 10% have their own private doctors; ⁻half are smokers, and 70% drink (half of whom prefer wine made from grapes); ⁻66% collect art, especially watches, ancient calligraphy and paintings; ⁻access information primarily on the internet; ⁻believe that paying taxes is the best way to engage in social responsibility; ⁻have become more sensitive to environmental issues; ⁻33% choose to send their children to study abroad during their high school years. 7 The Chinese Way, Ding and Xu, 2014 Chapter 23. The Nouveau Riche

8. Preferences and behaviors of the nouveau riche 10 current trends among the nouveau riche: ⁻1. From gold chains to Buddha beads; ⁻2. From fashion to antiques; ⁻3. From Chinese white spirits to red wine; ⁻4. From suits and ties to linen clothes and shoes; ⁻5. From Mahjong to golf; ⁻6. From Mercedes or BMW to bicycles; ⁻7. From global tours to exploring natural resorts with friends; ⁻8. From nightclubs to movies and traditional culture museums; ⁻9. From friends in debauchery to EMBA classmates; ⁻10. From coarse philistines into Buddhism-pursuers. 8 The Chinese Way, Ding and Xu, 2014 Chapter 23. The Nouveau Riche

9. Preferences and behaviors of the nouveau riche The wealthy are becoming more low-key, healthy, traditional, and cerebral. : ⁻many decide to go back to school to get an EMBA; ⁻another hobby of the uber-wealthy is running. Their preferences have become trends in the rest of society, especially among members of the middle class (anticipated to grow from 230 million in 2013 to 630 million in 2033). 9 The Chinese Way, Ding and Xu, 2014 Chapter 23. The Nouveau Riche

10. Road ahead Their desires will continue to change. Less conspicuous consumption and healthier lifestyles The nouveau riche will no longer be the reference group for the majority of the society. 10 The Chinese Way, Ding and Xu, 2014 Chapter 23. The Nouveau Riche