TEHRAN IRAN. High-net-worth individual (HNWI) is a term used by some segments of the financial services industry to designate persons whose investible assets (such as stocks and bonds) exceed a given amount. Typically, these individuals are defined as holding financial assets (excluding their primary) with a value greater than US$1 million. However, there are distinct classifications of HNWI and the exact dividing lines depend on how a bank wishes to segment its market. For example, an investor with less than US$1 million but more than US$100,000 is considered to be “ affluent”, or perhaps even “Sub-HNWI”. I think that “The Rich Kids of Tehran” Instagram site which I recently came across constitutes a very interesting topic about the HNWIs and sub-HNWIs spending and needs. After decades of austerity following the Islamic Revolution, middle-class Iranians have developed a taste for high-end designer goods, and for Tehran’s young rich, shopping has become the new religion.
Exposure to foreign trends through travelling, the internet and satellite television has created a desire for branded products, and of course showing off is a big part of the story. By spending huge amounts of money on big brands, well-off Iranians want to show they’ve made it. Therefore, one group of super-rich young Tehranis have taken showing off to new levels with their own Instagram site “Rich Kids of Tehran” , where without any perceptible sense of irony, they post pictures of their designer clothes and Tehran lifestyle.
When the site first appeared last year it prompted fury and resentment among poorer Iranians and the conservatives who dominate Iran’s political and legal institutions. But the Rich Kids seem undeterred by the controversy, reminding that, as for media, digital is catching up quick. Millions of users defy the official ban on Facebook and Iran’s Supreme Leader, Ayatollah Ali Khamenei, and President Hassan Rouhani use social networks like Twitterl!
Recent “Rich Kids of Tehran” postings include pictures of Tehran Fashion Week as well as those of the Iranian-Born Vaqar Sisters who draw acclaim at Paris Fashion Week on October 2016. The Vaqar sisters were being invited to compete in the third edition of the LVMH Prize for Young Fashion Designers and they were Louis Vuitton’s guests for four days in Paris. Their unique designs were showcased at Paris Fashion Week and attracted the attention of the world’s top designers and fashion critics, all of whom were aware of the Iranian fashion industry’s lack of support and the difficulties facing designers there as compared to elsewhere. Better yet: Shiva and Shirin ended up on the shortlist of 23, becoming the first Iranian fashion designers to be semi-finalists in the competition. During their stay in Paris, the Vaqar received visits from such fashion luminaries as the CEO of Christian Dior Sidney Toledano, Karl Lagerfeld, and Anna Wintour, editor-in-chief of American Vogue.
Although Shiva and Shirin were not among the eight finalists, they said they had subsequently received orders from a number of countries around the world. They described the experience as the beginning of a new and promising chapter in their professional life. Despite all of the challenges and difficulties confronting them, they entered the world of fashion and clothing design, and started creating their own brand of women’s wear for the Iranian market. Beyond the High-net-worth individuals as defined above, we must also recall that the International Monetary Fund puts Iran’s per capita GDP (gross domestic product) at $16,500. That means Iranian consumers on average have more money to spend than their counterparts in emerging markets like Brazil, China, India and South Africa. With the prospect of banking sanctions being lifted if a nuclear deal is finally reached, the big brands are waking up to the potential of a barely tapped market which could offer big dividends in the future. In big cities all across Iran, traditional bazaars now face fierce competition from American-style urban shopping centres where big name Western brands are on conspicuous display.
Mariam, an office worker who earns the equivalent of just $17,000 a year, has just blown more than a month’s salary on a new Burberry bag. She bought it online from an Iranian website that offers clothes and accessories from big brands and Western High Street retailers. The site takes payments via local credit cards, and offers a free home-delivery service. Mariam told BBC Persian she would rather pay more for good-quality brand names than cheaper but inferior, locally made equivalents. But she concedes that status also plays a big role in how she decides to spend her money. “There’s a lot of pressure on middle-class people to go out wearing designer clothes or an expensive watch,” she says. “Personally I feel more confident when I’m wearing brands.”
Finally, I am reporting that other recent postings by “The Rich Kids of Tehran” Instagram site questioned about where people are going on holiday this year – the responses range from Italy and Monaco to Japan and Dubai…