Ipsos Encyclopedia - Affluent

An affluent individual is, first and foremost, defined by above-average financial resources.

Definition

An affluent individual is, first and foremost, defined by above-average financial resources.

As a sociodemographic class, the Affluent can only be defined on a country by country basis, since income distributions differ strongly from one country to another and so one must always take Purchasing Power into account when determining the income levels which define affluence in a given country.

In the United States, Ipsos has defined the Affluent as those living in households where income is at or above $125,000 per year (approximately the Top 20% of all households).

In Europe, Ipsos defines the Affluent as the Top 13% of all adults (18+). The European Top 13% comprise the main income earners in the Top 20% households in each of the 21 survey countries, as measured by household income.

In Asia, Ipsos defines Affluent by different income levels from one country to another, due to the wide income discrepancies among countries: the income threshold thus corresponds to the Top 30% of earners in more affluent countries like Hong Kong and Singapore and to the Top 8% in less affluent countries like the Philippines, India, etc.

Ipsos Point Of View

​Affluent consumers tend to be influential out of all proportion to their size as a demographic class: with money to spend and the ability to experiment, they're often the earliest adopters of products and services. Ipsos has hence coined the concept of "Affluencers" - affluent consumers who are keen on trying and recommending new products and services.

Since what Affluencers are doing now is what everyone else will be doing next, they should be considered in every marketing plan. 71% of affluents in the US are Affluencers in at least one category where they have the inside scoop on new products and services—and they enjoy sharing their knowledge and recommendations with others. They spend significantly more than the average consumer in many product categories but also higher levels than the other affluent consumers. Examples include spending on watches and jewellery (hard luxury), home construction and design, new cars, travel and accommodation.

In addition, there are several services aimed specifically aimed at this audience: wealth management and private banking, luxury hotels, first class and business class travel, luxury and sports cars, etc.

According to IATA, where the premium cabin's share of total passengers ranges from around 5% on international routes within Asia to nearly 13% across the North Atlantic, the fact that premium-class passengers pay on average three to six times more than their economy counterparts, leads to a share of revenues close to 15% within Asia, around 37% between Europe and Asia and across the Pacific, and almost 47% across the North Atlantic.

In the US automotive sector, the profit margin of premium brands is at least twice as high as that of economy brands due to the price premium obtained from affluent buyers. Find out more from the Automotive definition.

Best reading

See also High Net Worth individual

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