Video production: Ho Yee Wong

The next generation of wealth in Asia is starting to have a profound effect on the luxury sector. These affluent members of society are not only contributing to the market growth of the luxury industry, but are also shifting luxury consumption patterns from products to services. And Hong Kong might be the most expensive city for those who aspire to live a life with the trappings of a rich millennial.

Millennials and the generation after them already account for about one-third of luxury shoppers and this proportion will expand to around 45% by 2025, according to management consultancy Bain & Company.

The younger generations are undoubtedly driving the evolution of the whole luxury industry. Rich millennials tend to attach more value to experiences and lifestyle enhancement rather than to pleasure derived from purchasing physical products, according to Julius Baer’s Wealth Report. Therefore, the impact these high-end consumers are having on the luxury industry goes beyond just the material aspect.

In addition to purchasing luxury items such as wine, handbags, timepieces, jewellery, and cars, a developing trend is of Asia’s next generation of wealthy people showing far greater interest in luxury experiences or services. For these people, just posting their newly purchased limited-edition items on Instagram is not enough - the photo will really stand out when set against the backdrop of a fine dining establishment or a hotel suite.

Hong Kong is one of Asia’s costliest cities to enjoy such high-end services, being ranked as one of the top three most expensive Asian major cities for luxury services in 2018. These services include business-class flights, residential property, hotel suites, golf club membership fees and degustation dinners, according to the Wealth Report. The city is the most expensive place in Asia to experience business-class flights and residential properties.

Tokyo is also another very expensive city to experience luxury services, and is ranked as the costliest in the hotel suite category, the report shows.

At the other end of the scale, Bangkok and Kuala Lumpur are ranked as the cheapest major cities to undertake such consumption activity, according to the report. Kuala Lumpur is particularly cost-effective in terms of residential property and hotel suite costs.

These findings are generally in line with the overall luxury market environment in Asia. In 2018, Hong Kong, Shanghai and Singapore continued to jockey for the top three positions in Asia in terms of the city ranking by luxury items, according to the report. Kuala Lumpur retained its status as the least expensive city in the region.