Despite economic uncertainty, turbulent markets and slow pandemic recovery, there’s been a significant increase in the number of super-rich individuals across the globe.
According to global investment bank Credit Suisse’s Global Wealth Report 2022, there were 62,500 millionaires worldwide at the end of 2021. This equates to 1.2% of the global wealth distribution, a rise of 9% since 2019. The number of ultra-high-net-worth individuals (UHNWIs) with $USD 30 million or more in investable assets grew even more rapidly, increasing by 21% in the same period.
Data published by global real estate consultancy Knight Frank reports that 9,717 UHNWIs are based in the Middle East. This number is predicted to rise to 12,028 by 2026.
It may seem like a tiny percentage, but the 1.2% of influential and affluent individuals control almost 50% of the global household wealth – that’s a staggering $USD22.17 trillion.
While the wealth of the top tier may seem incredibly disproportionate compared to the rest of the world, the super-rich can make a valuable contribution to any country’s economy.
For marketers looking to attract and retain the top tier, it’s important to understand their demographics: Who are they? Where do they live? What do they buy, and where do they invest? The results might surprise you.
Here’s an insight into super-rich demographics and marketing to the top tier.
Who are they?
The 1.2% generally fall into the following categories:
- Inherited wealth
- Baby boomers selling off their SMEs
- Stock market movers and shakers
- CEOs of multinational corporations
- Tech billionaires
As you may expect, the majority of UHNWIs in the top tier are white males aged over 55 from the USA or Europe.
However, these older, traditional profiles are rapidly being eclipsed by a new generation of super-rich. Knight Frank estimates that 129,557 UHNWIs are self-made and under the age of 40. In the Middle East, 1,879 account for 19% of this new surge of younger, tech-savvy wealth.
The gender balance is also shifting. There are now almost 39,000 women that account for 15% of the $USD30 million + UHNWI category.
Surprisingly, the three countries with more female than male entrepreneurs are Qatar, Madagascar and Saudi Arabia.
Where do they live?
According to a report by migration experts Henley & Partners, 38% of centi-millionaires ($USD100 million or more) live in the USA.
However, the next ten years will see a dramatic geographical shift in super-rich numbers migrating from West to East. Henley predicts that centi-millionaires in Asia will increase by 57% over the next decade, with China and India at the forefront of eclipsing the USA and Europe.
While New York currently takes the top spot for the largest millionaire population, Dubai ranks number one in the Middle East region. The city boasts 68,400 millionaires, 206 centi-millionaires and 15 billionaires with a growth rate of 62% from 2012 to 2022. Over the next five years, it’s predicted that UHNWIs growth in the Middle East region will increase by 24%.
Rather than consider the number of UHNWIs in the top cities, maybe we should be paying more attention to migration trends – in other words, where is the new generation of super-rich going?
Times are changing. In a volatile global climate, UHNWIs are looking for increased mobility and safe havens for their families. For this reason, Dubai is starting to shine as an attractive wealth hub. Thanks to the long-term residency offered by the UAE golden visa, a first-class infrastructure, a favourable tax regime, cutting-edge connectivity and ease of doing business, Dubai is establishing a growing reputation as a world-class UHNWI destination.
It’s interesting to note that in 2022, Dubai secured its status as the number one second home hub for global UHNWIs with a Prime Residential Price Index acceleration of 44.2%. In comparison, New York was way back in 67th place with a PIRI increase of just 2.7%.
According to a report by Wealth-x, in the first half of 2022, the UHNWI population dropped by almost 10% in the USA, and by 6.9% in Europe. In the Middle East, it grew by 7.4%.
Part of the UAE’s appeal to international buyers may also be due to its resilience during the COVID-19 pandemic and subsequent fast recovery.
What motivates them?
Not only are the world’s wealthiest people getting younger, but what motivates them is also changing from old-school traditional wealth.
When it comes to wealth migration, today’s super-wealthy families are looking for:
- Better education options
- A clean environment
- Safety and security
- A higher standard of living
- Business diversification opportunities
- Legacy protection
While the main drivers for countries seeking to encourage wealth growth include:
- A safe environment with low crime rates
- Growth in key sectors such as technology, healthcare, manufacturing and tourism
- A strong transport, energy and connectivity infrastructure
- A green economy with an emphasis on sustainable development
- Strong ownership rights
- Well-structured regulatory frameworks and governance
- A strong banking system
- Favourable tax rates
Marketing to the super-rich
Fact: a large proportion of today’s ultra-wealthy are self-made. They’re intelligent, educated, hard-working, driven, critical thinkers. Marketing to this new generation of super-rich needs a different approach. Think of their passions, interests and values. Consider their geographical location, too.
For example, North American UHNWIs’ interests may include philanthropy, writing, law and outdoor pursuits, while Middle Eastern UHNWIs lean towards business, finance, technology, education, real estate and health.
When it comes to luxury marketing in 2023, there are two main trends to consider: China and women.
For many years marketing for the super-rich has focused primarily on the USA and Europe. However, the list of Asian UHNWIs is growing rapidly, and to ignore this emerging market would be unwise. China is now the second-largest wealth market globally, with more than a quarter of the super-rich population under the age of 50.
China is currently home to 6.2 million millionaires, and that figure is set to grow to 12.2 million by 2026 – almost a 97% increase. They are tech-savvy, spoiled for choice, and very selective about their purchases. Marketing to Asia’s super-rich therefore needs to be specific and personalised.
Marketers can’t rely on demographics alone. Go deeper and research their passions, interests, motivations, concerns, and preferences. Asian millionaires want credible, well-sourced information delivered to them quickly and efficiently.
Another growing segment that must not be ignored is UHNW women. This small but influential audience has a greater interest in equality, social justice and ethical, sustainable luxury brands. Purchasing decisions are influenced by their values and ethos rather than a desire for the finer things in life.
Compared to their male counterparts, UHNW women tend to be more emotionally aware, artistic, altruistic, energetic and sociable.
A new generation of super-rich
The majority of today’s UHNWIs are younger and more tech-savvy and global than ever before. This elite group is also more socially and environmentally aware. You could say that the impartiality of COVID-19 was a wake-up call for many of the super-rich.
Classic cars, fine wines, jewels, art and super yachts… the usual shopping list of the super-rich is beginning to change. ESG investing, ethical banking, eco-friendly real estate and personalised, luxury resorts are taking over as the main interests of the super-rich population.
Marketing to this elite group requires a highly tailored, bespoke approach with a deep understanding of what exactly makes them tick.