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Emerging Opportunities in the Chinese Wealth Management Industry: Market Size, Strategies, Products and Competitive Landscape

BRICdata
Published Date » 2012-06-18
No. Of Pages » 75

Synopsis

The report provides detailed market analysis, information and insights, including:

  • In-depth analysis of wealth management strategies adopted by banking and financial institutions in China
  • How companies in China are adopting marketing strategies to succeed in the wealth management industry 
  • Key trends and drivers supporting the growth of the wealth management industry in China
  • Challenges faced by companies in the Chinese wealth management industry
  • Company-wise analysis of marketing strategies and product offerings in the wealth management industry

Summary

Chinas GDP recorded strong annual growth of 9.5% in 2011, growth that is expected to continue over the forecast period. This makes the country an attractive investment location for wealth management firms. Moreover, China has the main components that comprise a high-growth wealth management market, including a very large and young affluent customer base, an improving wealth situation among the global Chinese population, a governmental desire to more tightly regulate the countrys financial services, and an increasing share of organized companies as compared to the unorganized workforce. The volume of HNWIs in China increased at a compound annual growth rate (CAGR) of 8.96% during the review period (20072011), while the total wealth of Chinas HNWIs recorded a CAGR of 9.77% during the review period. 

Scope

  • This report provides an extensive analysis of the Chinese wealth management industry, including market sizing by asset classification
  • The report highlights various asset classes available for HNWIs and also classifies the investment made by HNWIs in each of the mentioned asset classes
  • It also provides an analysis of the marketing strategies used by banking and financial services companies in China
  • The report provides a detailed understanding of the product offerings of banking and asset management companies 
  • It also provides insights into the strategies that companies can adopt to succeed in the industry to strengthen market position

Reasons To Buy

  • Gain in-depth insight into the wealth management industry and the strategies used in China
  • Understand the various market dynamics of the wealth management industry in China
  • Take informed decisions and formulate effective strategies based on the reports detailed market insights on wealth management in China
  • Understand the growth strategies adopted by key companies

Key Highlights

  • China currently has the second-largest number of high-net-worth-individuals (HNWIs) in the Asia-Pacific region after Japan. Over the forecast period (20122016), the wealth and volume of HNWIs in the country is expected to continue to increase strongly, with the number of Chinese HNWIs projected to reach over 2.4 million individuals by 2016.
  • The popularity of alternative asset holdings has increased dramatically over the past two years, growth that is expected to continue into the forecast period and help the share of alternatives within total HNWI assets to increase from 4.7% in 2011 to 8.5% in 2016.
  • Chinas HNWIs provide strong growth prospects for the countrys wealth management firms and private banks, as there is currently a relatively low penetration of financial services in China.
  • The Chinese wealth management market is currently highly fragmented as a result of it being in an early stage of development. Moreover, the countrys organized service providers, such as commercial banks and wealth management companies, have thus far predominantly focused on Chinas urban population, neglecting a potentially lucrative customer base of HNWIs that reside in rural areas.
  • Commercial banks, private wealth management companies and asset management companies are adopting various marketing strategies in order to become successful in the Chinese wealth management industry.
Table Of Content

1 Executive Summary

2 Chinese Wealth Management Market Environment
2.1 Macroeconomic Fundamentals
2.1.1 GDP at constant prices
2.1.2 Inflation rate
2.1.3 Annual disposable income
2.1.4 Shanghai Stock Exchange market capitalization
2.1.5 Interest rate
2.2 Regulatory Framework
2.2.1 Banking regulations
2.2.2 Wealth management and related norms
2.2.3 Regulatory framework on hedge funds

3 Market Size and Growth Potential of Chinese Wealth Management
3.1 Market Size of Chinese Wealth Management by HNWIs
3.1.1 High-net-worth-individuals (HNWIs)
3.1.2 Ultra-high-net-worth-individuals (UHNWIs)
3.1.3 The core high-net-worth individuals (core HNWIs)
3.2 HNWI Investments by Asset Class
3.2.1 Investment trends in liquid assets equity, fixed income and cash deposits
3.2.2 Investment trends in cash and deposits
3.2.3 Trends in alternative assets
3.2.4 Investments in real estate
3.2.5 Investment trends in equity
3.2.6 Trends in art, wine and automobiles

4 Wealth Management Services in China
4.1 Portfolio Management and Portfolio Rebalancing
4.1.1 Bank of China wealth management
4.1.2 China Merchant Bank (CMB) Sunflower financial management planning service
4.1.3 Standard Chartered Banks investment services
4.2 Trusts and Estate Planning and Management
4.2.1 China Banking Corporations estate planning services
4.2.2 Weir & Associates trust and planning company
4.3 Private Banking and Financing
4.3.1 ICBC Private Banking Services
4.3.2 China Merchant Banks Sunflower VIP service
4.3.3 CitiGold private banking
4.4 Investment Management and Advisory
4.4.1 ICBC Perfect Match wealth management product
4.4.2 Bank of Chinas Zhongyinjifu wealth management investment plan

5 Trends and Growth Drivers
5.1 HNWIs Shifting Investments from Residential Real Estate as Regulations Cool the Market
5.2 Tax Optimization Products Are Not Currently in High Demand
5.3 Increasing Number of HNWIs in China Presents Significant Business Opportunities
5.4 Real GDP Growth Rate
5.5 Chinese Wealth Management Customers are Shifting to Professional Institutions
5.6 Money Lenders are Shifting Their Focus to Wealth Management Products
5.7 Increasing Number of Wealth Management Institutions in the Chinese Market
5.8 Emergence of Offshore Wealth Management in China
5.9 Chinese HNWIs Are Using Multiple Wealth Management Institutions

6 Marketing and Growth Strategies of Chinese Wealth Management Service Providers
6.1 Providing Personalized Investment Services
6.2 Online Wealth Management Services
6.3 Mobile Application for Wealth Management Services
6.3.1 Bank of Chinas mobile investment management application
6.3.2 Bank of Beijing iPhone application for marketing
6.3.3 ICBC exclusive mobile banking wealth management products
6.4 Product Diversification
6.5 Partnering with Assets Management Companies
6.6 Utilizing Social Media to Interact With Customers
6.6.1 Chinese banks are using social media platforms to build strong relationships with their customers

7 Strategies to Succeed in the Chinese Wealth Management Industry
7.1 Effective Customer Segmentation
7.2 Building an Effective Distribution Strategy
7.3 Brand Building
7.4 Identifying Customer Needs to Increase Share of Wallet
7.5 Building Core Competencies
7.6 360 Degree View of Investment

8 Challenges
8.1 Underdeveloped Wealth Management Products
8.2 Lack of Expert Professionals in Wealth Management
8.3 Complicated and Cumbersome Tax System
8.4 Complex Regulatory Structure
8.5 Move Away From Self Management
8.6 Demand for Intergenerational Wealth Transfer and Younger Clientele
8.7 Philanthropy

9 Competitive Landscape
9.1 Industry Structure
9.2 Wealth Managers and Private Banks
9.2.1 Public sector banks
9.2.2 Wealth managers
9.2.3 Private-sector banks
9.2.4 Foreign banks and MNCs
9.2.5 Joint ventures

10 Company Profiles
10.1 Bank of China
10.1.1 Company overview
10.1.2 Business segmentation
10.2 Agricultural Bank of China Limited
10.2.1 Company overview
10.2.2 Business segmentation
10.3 China Construction Bank Corporation
10.3.1 Company overview
10.3.2 Business segmentation
10.4 China Merchants Bank Company Limited
10.4.1 Company overview
10.4.2 Business segmentation
10.5 Ping An Insurance (Group) Company of China Ltd
10.5.1 Company overview
10.5.2 Business segmentation
10.6 Non-Banking Investment Management Companies in China
10.6.1 China Asset Management (ChinaAMC)
10.6.2 Credit Suisse China
10.6.3 China CITIC Bank

11 Appendix
11.1 About BRICdata
11.1.1 Definitions
11.1.2 Areas of expertise
11.2 Methodology
11.3 Disclaimer

List of Tables


Table 1: Chinese GDP at Constant Prices (US$ Billion), 20072016 (Base Year 19992000)
Table 2: Chinese Inflation Rate (%), 20072016
Table 3: Chinese Annual Disposable Income (US$ Billion), 20072016
Table 4: Chineses Shanghai Stock Exchange Market Capitalization (US$ Trillion), 20072011
Table 5: China Central Bank Interest Rate Fluctuations (%), September 2009 July 2011
Table 6: Chinese HNWIs Volume by Wealth Bands, 20072011
Table 7: Chinese HNWIs Volume by Wealth Bands, 20072011
Table 8: Chinese HNWIs Volume by Wealth Bands, 20122016
Table 9: Chinese HNWIs Volume by Wealth Bands, 20122016
Table 10: Chinese HNWIs Value by Wealth Band (US$ Billion), 20072011
Table 11: Chinese HNWIs Value by Wealth Band (US$ Billion), 20122016
Table 12: Chinese UHNWIs Volume by Type of UHNWI, 20072011
Table 13: Chinese UHNWIs Volume by Type of UHNWI, 20122016
Table 14: Chinese UHNWIs Value by Type of UHNWI (US$ Billion), 20072011
Table 15: Chinese UHNWIs Value by Type of UHNWI (US$ Billion), 20122016
Table 16: Chinese Core HNWIs Volume by Type of Core HNWI, 20072011
Table 17: Chinese Core HNWIs Volume by Type of Core HNWI, 20122016
Table 18: Chinese Core HNWIs Value by Type of Core HNWI (US$ Billion), 20072011
Table 19: Chinese Core HNWIs Value by Type of Core HNWI (US$ Billion), 20122016
Table 20: Chinese HNWI Liquid Asset Composition (%), 20072016
Table 21: Chinese HNWI Trends of Investments in Alternative Assets (US$ Billion), 20072011
Table 22: Chinese HNWI Trends of Investments in Alternative Assets (US$ Billion), 20072011
Table 23: Chinese HNWI Alternative Asset Composition (%), 20072016
Table 24: Chinese Real GDP Growth Rate (%), 20072016
Table 25: ChinaAMC: Main Services
Table 26: Credit Suisse China: Main Services
Table 27: CITIC Bank Corporation Limited: Main Services
Table 28: Definitions

List of Figures


Figure 1: Chinese GDP at Constant Prices (US$ Billion), 20072016 (Base Year 19992000)
Figure 2: Chinese Inflation Rate (%), 20072016
Figure 3: Chinese Annual Disposable Income (US$ Billion), 20072016
Figure 4: Chineses Shanghai Stock Exchange Market Capitalization (US$ Trillion), 20072011
Figure 5: China Central Bank Interest Rate Fluctuations (%), September 2009 July 2011
Figure 6: Chinese Wealth Management Industry Customers HNWI Composition
Figure 7: Chinese HNWIs Value by Wealth Band (US$ Billion), 20072011
Figure 8: Chinese HNWIs Value by Wealth Band (US$ Billion), 20122016
Figure 9: Chinese HNWIs Regional Distribution (% Share), 2011
Figure 10: Chinese HNWIs Regional Distribution Key Regions, 2011
Figure 11: Chinese UHNWIs Volume by Type of UHNWI, 20072011
Figure 12: Chinese UHNWIs Volume by Type of UHNWI, 20122016
Figure 13: Chinese UHNWIs Value by Type of UHNWI (US$ Billion), 20072011
Figure 14: Chinese UHNWIs Value by Type of UHNWI (US$ Billion), 20122016
Figure 15: Chinese UHNWIs Regional Distribution (% Share), 2011
Figure 16: Chinese Core HNWIs Volume by Type of Core HNWI, 20072011
Figure 17: Chinese Core HNWIs Volume by Type of Core HNWI, 20122016
Figure 18: Chinese Core HNWIs Value by Type of Core HNWI (US$ Billion), 20072011
Figure 19: Chinese Core HNWIs Value by Type of Core HNWI (US$ Billion), 20122016
Figure 20: Asset Class Composition (% Share), 20072016
Figure 21: Chinese HNWI Liquid Asset Composition (US$ Billion), 20072016
Figure 22: HNWIs Investment in Cash and Deposits (US$ Billion), 20072016
Figure 23: Chinese HNWI Trends of Investments in Alternative Assets (in US$ Billion), 2007-2011
Figure 24:Chinese HNWI Trends of Investments in Alternative Assets (in US$ Billion), 20122016
Figure 25: Chinese HNWI Investment in Real Estate (US$ Billion), 20072016
Figure 26: Chinese HNWI Investment in Equities (US$ Billion), 20072016
Figure 27: Mercedes-Benz and Porsche* Cars Unit Sales in Chinese Market
Figure 28: Wealth Management Services In China
Figure 29: Chinese Wealth Management Trends and Growth Drivers
Figure 30: HNWI Growth Factor Correlation, 2007-11
Figure 31: PICC Social Media Platform on Weibo.com
Figure 32: Strategies to Succeed in the Chinese Wealth Management Industry
Figure 33: A Unified View of Customer Investment
Figure 34: Challenges in Chinese Wealth Management
Figure 35: Chinese Wealth Management Industry Structure
Figure 36: Major Companies in Chinese Wealth Management Industry

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