Status symbols

It costs nearly US$15,000 for a bottle of Remy Martin’s Louis XII brand and only 786 bottles are available worldwide. Chinese consumers have already pre-ordered 100 of them.

It would appear that the French cognac maker’s efforts to corner China’s luxury spirits market – a rare cask of Louis XII was unveiled in the southern city of Guilin – have worked. Although Remy Martin saw its global profit fall 20% year-on-year in 2008, income derived from the China market rose 10%.

According to the most recent World Wealth Report issued by Merrill Lynch Global Wealth Management and consulting firm Capgemini, the worldwide population of high net worth individuals (persons with investible assets of at least US$1 million) dropped 14.9% in 2008, reducing both the number of rich and their total assets to below 2005 levels.

For China, this meant a drop of 49,000 millionaires (11.8%) to 364,000 – a relatively minor dip compared to the 64% reduction in total millionaires experienced by Hong Kong. In fact, so small was China’s millionaire slump that it actually surpassed the UK in the process of declining, now ranking fourth among countries with the largest number of millionaires (next to the US, Germany, and Japan).

But when it comes to the ultra-wealthy – people with more than US$30 million – mainland China and Hong Kong have retained a combined 6,300 in spite of the economic downturn, nearly 26% of the Asia-Pacific total.

Now, in an effort to distinguish themselves from the growing upper class, China’s super-rich are beginning to seek out increasingly exclusive – even bizarre – ways of displaying their success.

Unusual by nature

Rich people the world over are prone to eccentricities in their consumption habits. One American multimillionaire, for example, covered his mansion with so many Christmas lights it distorted the path of migrating birds. Status competition plays a role, as does the simple fact that the ability to buy on merest of whim leads to increasingly whimsical purchases.

However, given the relatively recent arrival of China’s nouveau riche and their relative isolation from the global billionaire community, the consumption habits of the country’s uppermost exhibit particularly Chinese quirks.

For example, each year rich Chinese people spend millions of dollars on Super Red Arowana, or "Dragon Fish." At 30-90 centimeters in length and costing anywhere from US$10,000-$300,000 for the brightest specimens, Dragon Fish are undoubtedly the most expensive pets, pound for pound, in the world.

Unfortunately for those who hoped Dragon Fish would set them firmly apart from the hoi polloi, even fish are not immune to counterfeiting. Shortly after the Arowana became popular, black market forums cropped up offering access to illegal imports and bootleg look-alikes. One user, registered as "Sugiza," lamented wasting RMB9,000 (US$1,300) on an imposter, a red parrot bay cichlid, which sells for more or less the same price as a goldfish.

"I lost RMB9,000 on a stupid fish that soon died," he said.

Living to excess

Dragon Fish are just the beginning. Each year thousands of wealthy Chinese couples spend between US$10,000-$50,000 on "butterfly weddings," in which hundreds or even thousands of butterflies are released over the heads of the newlyweds as they exit the ceremony.

They are also buying hardware. Given the restricted nature of China’s airspace, there isn’t much space for hobby luxury aircraft – although business aviation is picking up.

Pleasure craft for sea journeys, on the other hand, are more free to maneuver. As a result, Italy’s Azimut Yachts has begun taking orders for 30-meter long "mega-yachts" to be distributed through a Chinese subsidiary. The company has set a benchmark for 50 mega-yacht deliveries a year by 2012, and will begin offering Azimut Leonardo 98s, rumored to be the largest yacht ever sold in China, by the end of the year.  

On the ground, nothing can top Bentley’s 728 stretch limo, the most expensive luxury vehicle in the world. In 2008, Bentley’s Beijing dealership sold six at a whopping US$1.2 million a pop – another world record – and the company is planning to roll out two more models in China later this year. Bentley Beijing brought in enough revenue to make it one of the company’s top 10 dealerships worldwide in 2008. With sales rising 50% year-on-year, Bentley China will likely continue to outperform most of its US and European rivals.

Indeed, China’s super-rich are showing no signs of slowing their spending. Not a week goes by without news of a woman purchasing a US$500,000 mastiff or the opening of a shoe store hawking US$10,000 loafers. But while such stories make good news copy, it also starkly emphasizes China’s ever growing wealth gap. Bearing in mind that this is still nominally a communist country, China’s wealthiest citizens may be overdoing it.