English

Asia Pacific Consumers Ready to Spend Their Way Out of Recession

A recent Nielsen survey portrays that Asia Pacific consumers are ready to spend their way out of recession. Renewed willingness to spend as 2010 progresses is found in China, Brazil, India, Singapore and Hong Kong. Stock market investments and increased savings are a result of consumers being more confident in the market, including spending on luxury items such as vacations, clothes and entertainment.

One MasterCard survey portrayed that entertaining and dining is where Asian Pacific consumers will put their money in the next six months, showing extreme resilience in the face of the global recession.

Consumer confidence has surged in the first quarter of 2010, returning consumers to positive territory. In the last 6 months, the majority of consumer sentiment in Asia pacific has shifted their gears from recession into recovery. In this climate of economy, the sentiment is correlated to actual sales. In Australia, for instance, the confidence of consumers rose eleven points in the third quarter of last year.

Strengthening economic conditions resulted in the Reserve Bank of Australia to increase its rates, becoming the first country to do this. This resulted in increased sales of 2% in both August and September of 2009 in FMCG or fast moving consumer goods. Since Nielsen tracked the recession in January 2009, there is a buzz that it is currently at its lowest levels.

Asia Pacific spending has always been a key indicator of confidence in business and has made a rebound faster than analysts have expected. Across many Asian Pacific markets, sales of FMCG has made a significant increase as Asian consumers are starting to purchase items which are discretionary after a long period of spending within the parameters of a budget.

In October of 2009, sixty-six percent of worldwide consumers claimed that their economy was in recession compared to seventy-seven percent in April of 2009. For many consumers in Asia Pacific, however, the recession has become a thing of the past. 87% of Chinese say that their country is out of the recession while 60% of Hong Kong and Australian citizens say the same. Half of Indians believe that recession has ended in their country as well.

According to another survey conducted by the MasterCard Worldwide Index of Consumer Purchasing Priorities, the top spending priorities of Asia Pacific consumers are 49% on fashion and accessories 36% on wellness and fitness, 34% on their children’s private tuition, 34% on extra curricular activities and 34% as well on consumer electronics.

In Hong Kong, thirty percent less consumers say that their country is in a recession. In the most recent survey, thirty two percent of Honk Kong consumers said that they are in a recession compared to sixty percent in June of 2009. After holding back on spending for many quarters, with the Hang Seng property index on the increase, Hong Kong consumers are currently beginning to open their wallets once more.

Increased spending on discretionary items such as home entertainment, technology, holidays and new clothes is on the rise, which is a stark contrast to their cutting back on spending on these items a year before. Consequently, many other sectors of the economy are seeing a fresh recovery, including finance, property and high ticket retailing. A recovery on the FMCG remains to be seen, however as the sales of these goods have remained somewhat unchanging.

Last quarter’s 6-point increase in China was propelled by significant improvements in the personal income and local job possibilities in the country. Six out of ten Chinese describe their job prospects excellent when asked to rate the way they foresee the next 12 months, which is a fourteen percent increase compared to the 2nd quarter. China’s two tier-cities posted up to 22 percent increased consumer confidence compared to the quarter before.

Nielsen witnessed in July that Chinese consumers felt the economy was on its lowest level and was on the way to recovery. In the 3rd quarter, there is an extension of this optimism. Chinese consumers are still hesitating to spend money but there is a willingness to try new products. Thus, the companies which will focus on introducing innovative new products may be the ones to drive consumers to purchase more items throughout the country.

The survey further says that in the last quarter of 2009, Asia Pacific markets emerged to become eight of ten consumer markets that are most confident compared to South Korea, Japan, Indonesia and India, which were the least confident.

Among all the Asian Pacific markets, the highest increase in confidence came from Hong Kong as portrayed by a seven point increase in index in the fourth quarter from 93 to 100 on a 200-point scale. Since June of 2009, a 21-point increase occurred in Hong Kong.

According to Nielsen, local Hong Kong consumers are planning to increase their spending on entertainment, vacations and new clothes in the next six months are overall consumer confidence improved from seventy to ninety-nine point.

However, regardless of a greater overall increase in consumer confidence, ‘saving for a rainy day’ has remained number one of the list of consumer’s priorities in Hong Kong, with seventy-one percent putting their extra cash into savings.

Because of the stock market stability, the confidence consumers have in investments is also strengthened. Over half of the respondents (51%) say that they will invest spare cash in mutual funds and stock.

According to James Russo, Vice President of The Nielsen Company global consumer insights, this is a great sign that the overall global recession recovery is headed in the right direction.

“The Nielsen survey shows that in the past six months, consumers have become more optimistic about their countries emerging from recession with better job prospects and personal finances,” says Nielsen.

“However, while purse strings may be loosening in some markets, there is clearly a big difference in the pace of expected recovery between the emerging and developed markets, and consumers’ increased confidence is not yet translating into a widespread readiness to start spending.” Nielsen adds.

Compared to 90% of Mexican, United States and England consumers who feel that they are still deep in the recession, 60% Singaporean, 73% percent Hong Kong and 83% consumers from China believe that in the 4th quarter of 2009, the recession had ended in their country.

Also leading the way into discretionary types of spending, Asia topped global rankings for mutual funds and stock investments with China topping the rankings. Chinese consumers are ranked 44% in the world for spending on technology products, 57% for spending on mutual funds, 50% for holidays and 53% for new clothes. The survey also found that consumers from Hong Kong are starting to spend on new clothes, new technology and entertainment outside the home.

In India, concerns over the rising prices of food hampers their confidence. Russo says that “although the Indian economy is expected to grow in 2010, India has experienced a bad monsoon season resulting in increased food prices and higher grocery bills for consumers. This has had an immediate impact on consumer confidence and the availability of discretionary income.”

According to a Nielsen Report from the last quarter of 2009, consumers both in China and in the Philippines are intent on spending their cash on new technology. Consumers in Korea and Japan who are tech-savvy do not want to wait much longer to upgrade their current cell phones and PC’s. Alternatively, ten percent of Chinese consumers say that they can wait to delay their technology purchases.

Sensible Singaporeans

Despite rebounding confidence levels in 2008, a MasterCard survey finds that Singaporeans remain conservative with their money.

Focusing more on saving their income compared to just six months ago (34.2%), 45.8% of the survey participants said that they plan to increase the amount they save in the first six months of 2010. Compared to 54.4% in the last survey, 45% currently say that they plan to save an equal amount of cash.

72.8% respondents who claimed they plan to save the same amount if not more said that the reason for this was to save for emergency expenditures that were unforeseen, due to an ‘uncertain economic outlook.’ 35.3% said they plan to save for personal international air travel and 37.9% for purchasing consumer electronics.

In the next six months, 28% of Singaporeans plan to save approximately 11-20% of their income and 21% plan to save approximately 21-30%.

The Kospi index of South Korea has increased almost fifty percent since the beginning of 2010 and its weak Won has given quite a boost for its export and manufacturing industries as well as for its sectors of key export products which is cars and consumer electronics.

Economic adviser of Africa, the Middle East and Asia Pacific Dr Yuwa Hendrick-Wong stated that “consumer sentiment here fell precipitously in 2008 and early 2009, but it is now seeing a V-shaped rebound. Persistent uncertainty in the outlook of the global economy, however, continues to affect consumers’ savings and spending behavior, which show that most consumers are still saving for precautionary reasons.”

He adds that “For the Asia Pacific region as a whole, the robust recovery in both economic conditions and consumer sentiments can therefore be characterized only as a ‘partial decoupling’ from the rest of the global economy.”



Source by Jennifer Cosculluela
kontraktor rumah
bina rumah
pinjaman lppsa
pengeluaran kwsp
spesifikasi rumah
rumah ibs
pelan rumah
rekabentuk rumah
bina rumah atas tanah sendiri
kontraktor rumah selangor
rumah banglo