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More millionaires and a shift in consumer behaviour in emerging markets present opportunities for luxury brands

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A surge in the number of millionaires and a shift in luxury consumer behaviour in emerging markets in the coming decade present opportunities for brands that serve the wealthy, according to a new report by Wealth-X.

Decades of Wealth: The Next 10 Years In Wealth & Luxury, reveals that emerging markets such as India and South Africa will see their millionaire populations rise significantly in the coming decade. There will be 437,000 millionaires In India by 2018, and that number is projected to double by 2023.

Wealth growth in Africa – particularly in the key markets of South Africa, Nigeria and Kenya – will continue, at a rate of over 10 pre cent per annum.

Some USD4.1 trillion will be transferred globally by ultra high net worth (UNHW) individuals to the next generation over the next decade, including USD1.2 trillion in liquid assets.

The way wealth is used by the newly wealthy will adapt and change in emerging markets. The rise in discernment among the world's wealthy will not only affect the brands they buy, but it will also affect what they buy.

Wealth-X has identified five implications of the shift in luxury consumer behaviours in emerging markets for brands that target wealthy consumers:

• Less Internationalisation, More Localisation: In the coming decade, it will be increasingly important to segment and understand the wealthy at a more detailed level – most likely defined by cities within countries. Brands should also be prepared for the non-linear development of economies and wealth creation.

• Pushing Frontiers Will Generate New Spending and Opportunities: The wealthy have always been among any early adopter group, and new frontiers will become the focus of both luxury consumption (such as space travel) and of investment.

• Experience More Desired Than Products: Growing discernment among the rich in emerging markets will increasingly shift luxury consumption away from product purchases to experiences such as space travel and underwater holidays.

• Exclusivity and Personalisation Sought: As well as fundamental rarity, personalisation will be the second major driver of exclusivity in the next decade. This will be manifested in tailored and unique products, through to one-off experiences.

• Intimacy: Privacy and Closeness Will Gain Importance: There will be an increasing desire for privacy among the wealthy in the future, yet at the same time a desire for greater intimacy among the select providers they trust.

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