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Top Of The Pyramid

Top of the pyramid

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  Foreword The luxury segment is fraught with irony: for the consumer, it evokes a rarified exclusivity, a pearly fragility even, that is at odds with what occupies the consumer market analyst – steely drivers that insulate the segment from the slings and arrows of economic upheavals. FY2016-17 iterated this more than ever: spending among India’s 160,600 super rich was unaffected though more self-conscious. India’s ultra High Networth Household (HNH)* segment actually grew 10% to 160,600 in this time. With a total networth of  `  153 trillion, this is a segment that interests us deeply. As a financial house, we are chuffed at the ultra HNIs' growing interest in equity as we look beyond current market volatility at long-term allocation patterns. As wealth managers, we are hooked on the big trends that emerge from this edition’s research: luxury spends continue notwithstanding whiffs of wariness, equity is digging its heels in, digital is becoming popular as a mode of buying and socializing, wellness is a growing preoccupation and family offices are grappling with handovers to a slick young generation that appears less hungry and more compassionate at the same time. It may come as no surprise that digital/social media are enabling buying and socializing amongst ultra HNIs, but you may be as surprised as I am that 81% of them do almost a third of all their shopping online. This online engagement presents an opportunity for all of us who address this segment one way or another.At a time when domestic and global markets are looking to find their steady levels, and headwinds – whether post demonetization or taxation regime changes – are a fact of life, I am happy to report that luxury continues to hold its own. Happy reading! Jaideep Hansraj CEO – Wealth Management and Priority Banking Kotak Mahindra Bank Ltd. *We define an ultra HNI Household (HNH) as one with a minimum networth of  ` 250 million, mapped over 10 years.  Foreword  18  SPENDSINSIDE THE REPORT   04  About the Report  08  Executive Summary  12  Luxury Holds Its Own   Indian Ultra HNH  n  Broad Patterns  n  Allocation by Category 26  The Perfect Balance n Working Fitness Out n Modern Fitness Regimes n A Growing Indulgence n Way to Wellness n The Tools of Fitness n Social Media and Fitness 34  Heart and Soul n  Philanthropy as a Way of Life n The Young Knights n  Drivers of Philanthropy n  The Chosen Ones n  Popular and Emerging Conduits   SPECIAL FOCUSSPECIAL FOCUS  2017  TOP   OF   THE   PYRAMID   2017 | Kotak Wealth Management   n  Main Source of Wealth n Equity Emerges a Clear Winner n Approach to Investment n Robo Advisory 54  Investments 44 The Second Self n Online Activities n Popular Apps and Websites n Online Shopping n Online Reading Habits SPECIAL FOCUS 62  Family Business n Transferring Control n Engaging the Next Generation n Success with Succession n Integration Ideas n Harmony and Efficiency n Containing Conflict SPECIAL FOCUS   Report op of the Pyramid is Kotak Wealth Management’s annual publication that covers the spending, investment, and lifestyle patterns of ultra high networth individuals (HNIs). Kotak Wealth Management, the private banking arm of Kotak Mahindra Bank, commissioned professional services firm Ernst & Young LLP (EY) for the report. EY collaborated with market research firm- Feedback Consulting for the survey to study and analyse ultra HNI trends. For its projections, EY used parameters such as GDP growth, savings and inflation rates, past and projected financial and non-financial asset-class allocations, and returns. The government has launched several initiatives and policies with a long-term vision for the Indian economy. These initiatives have influenced the investing and spending patterns of ultra HNHs in India. This year saw an increase in the number of ultra HNHs (high networth households) over last year. The report further details the investment and spending patterns of the ultra HNHs.In addition to looking at their spending and investing patterns the report has explored ultra HNI behaviour in social-media usage, fitness regimes, and charitable pursuits. The special focus areas of this year’s edition are digital behaviour, health and wellness, philanthropy, and family businesses. Making of Top of the Pyramid 2017 During our research, we observed that emerging cities and small towns continue to form a significant part of the Indian ultra HNH population. We found that besides the top four metro cities, other cities such as Bengaluru, Ahmedabad, Pune, Hyderabad, Nagpur, and Ludhiana contribute largely to the Indian ultra HNI population.The current report is a culmination of insights from three main sources that are listed below: 1. A detailed market survey of close to 200 ultra HNIs by Feedback Consulting. The survey took place  About the   This year, TOP explored four special areas – health and wellness, philanthropy, online presence, and family businesses  TOP   OF   THE   PYRAMID   2017 | Kotak Wealth Management