How have the Chinese super-rich become super-rich?
The Bao Fa Hu is the very large and powerful group of overnight millionaires or billionaires who have little “cultural worth,” . Bao Fa means “explosively rich” and Hu means “group.” Western countries call them “new money”. According to the statistics, the population of Bao fa hu is about 60 million, nearly the same as an entire European country as France. People think that bao fa hu accumulate wealth through international trade with foreigners, while as the statistics show, 95% of the rich earned money in domestic market, leaving the rest 5% for exports. So it seems that the appearance of bao fa hu has nothing to do with “the opening up policy”. While a large number of the millionaires can be attributed to natural resource development, like iron, coal, rare metals, mainly located in Shanxi Province, Sichuan Province, Jiangxi Province and Northeast China. Besides, the number of millionaires from East China, including Zhejiang Province, Guangdong Province and Fujian Province, is also impressive because of their geographical advantages.
Shopping overseas for Chinese
Affluent Bao fa hu are willing to pay for flights to Hong Kong, the US and Europe and traveling abroad to purchase luxury goods due to no tariff, and much more discount respectively. Most luxury stores, like Burberry and Gucci, have already employed Chinese staff to provide service for Chinese. They usually put an outstanding notice writing in Chinese outside stores to inform passengers that we welcome Chinese consumers. According to the statistics, 30% of the sales for Burberry in London area came from Chinese visitors, 22% sales of Gucci in Europe stores. Owing to such interesting phenomenon, a new phrase named “Beijing Ponds” (money spent in England by Chinese) came out suggesting that Chinese millionaires have covered large market share for foreign luxury brands. As for the reason why they go overseas for shopping varies in three groups, 72% think Luxury goods overseas are cheaper than at home, 69% think there is more variety overseas, while 45% think the service and shopping experience is better overseas.
Luxury lifestyle in China
Even though the bao fa hu earned money, but they didn’t gain equal high taste for lifestyle, especially when they purchased a luxury handbag worthed over 10,000 yuan without any hesitation, or when they bought a bottle of Lafite 1869 with over 130,000 Pond from Sotheby’s auction house but just for drinking instead of keeping in wine cellar. However, in specialists’ eyes, it is not investment but endless waste. Besides, Chinese buyers have their own ways of drinking. They cheers first and then make bottoms up, sometimes they even add Coke Colar into the wine just to make it sweeter. It is unbelievable for people who truly love wine. By comparison, western millionaires can always keep a simple attitude and lifestyle, they don’t pursue material too much but spiritual enjoyment, maybe this is a new direction where Chinese Bao fa hu should go.