Research company TNS has unveiled the results of the biggest global study into the attitudes and investment priorities of the affluent – painting a timely picture of wealth, post global recession.
While the US still ranks as the world’s most prosperous country, with 31 million affluent households, the study reveals that the emerging economies of India and China have overtaken many European countries in this measure of consumer wealth.
G Chandrasekhar, Senior Vice President, TNS India, noted, “A lot of people believe that there is considerable level of latent affluence within the Indian economy. The moot points are: what is the magnitude of this affluence? And how can we tap this enormous potential? This study gives some pointers on both: the extent of the investment potential that the country offers, as well as some relevant insights for tapping this potential.”
Based on interviews with 12,000 people across 24 markets, including China, Brazil and India, TNS’ Global Affluent Investor study shows that the growth of developing economic powerhouses is already starting to impact personal fortunes, among households with more than $100,000 investable assets.
It also shows that emerging markets now rival their developed counterparts in terms of the amount that people have to invest. The UAE and India appear in the top five countries where the affluent have more than $1 million investable assets on average, alongside Singapore and Hong Kong. The only Europeans to feature in this top five are the Swedish, whilst the UK and France are the least likely in Europe to have these levels of investable assets.
While incidence of affluence would naturally be higher in small, wealthy countries like Luxemburg (29 per cent) and Singapore (20 per cent), there are huge contrasts in markets with large populations; while 27 per cent of the US are affluent, this falls to around 1 per cent in India and China. This demonstrates a great contrast in wealth distribution within emerging markets, even where the actual number of affluent households is high and highlights a need for very precise marketing strategies to reach the right audience.
Reg van Steen, Director Business and Finance, TNS, commented, “When examining global incidence of affluence, it’s not only size that matters. We wanted to identify the growth potential of each market – and our research confirms that emerging markets will become new centres of affluence in coming years. India and China have already surpassed major European markets like Germany and France. It’s interesting to see that the entrepreneurial spirit of people in these markets is already paying off in terms of personal wealth.”
Fundamental social shifts are unearthed when examining the demographics of the world’s affluent. While they average 57 years old in North America and Northern Europe, this falls to the early 40s in Australia, Singapore and Hong Kong. While men are the primary decision makers among affluent households in India (80 per cent men) and Central Europe (79 per cent), the balance is spread far more even in North America (45 per cent men).
TNS’ findings also demonstrate regional contrasts in terms of what the affluent actually invest in. While the Chinese, Indian and German affluent are keen investors in precious metals (cited by 35 per cent, 33 per cent and 23 per cent of respondents, respectively), this falls to just 3 per cent in Sweden, Norway and the Netherlands, and 2 per cent in Denmark and Israel.
Reg van Steen continued, “Despite today’s pan-global financial trends, it’s important to recognise the diversity in local preferences when it comes to asset allocation. We detected big differences between markets, even when they border each other geographically: only 5 per cent of Norwegians invest in bonds, compared to 31 per cent of the Swedes. And while the popularity of commodities fluctuates at a global level, they are very popular among India’s affluent. These are the insights that make all the difference when trying to engage the wealthy with a specific product or service.”