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MasterCard Survey: Consumers in Asia Pacific Saving For Rainy Days

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Consumers in Asia Pacific are saving up for rainy days ahead, according to the MasterCard Worldwide Index of Consumer Purchasing Priorities. A vast majority of consumers in the region (87%) today say that saving is very important or important to them. It is especially a priority for those earning less than US$10,000 a year (91%), compared with those earning above US$30,000 a year (85%).

The annual MasterCard Worldwide Index of Consumer Purchasing Priorities provides valuable insights into consumers savings and expenditure behavior and their discretionary spending priorities for the 12 months ahead. This years Index is based on a survey of 6,019 consumers in 14 markets (Australia, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand and Vietnam), conducted between 1 and 29 September 2008.

Indonesia (97%), the Philippines (97%), Malaysia (93%) and India (92%), have the highest percentage of consumers reporting that saving is either important or very important to them. China, on the other hand, has the lowest percentage (77%), followed closely by Singapore (79%) and Korea (81%).

Precautionary saving is the top savings motive for consumers across the region (66%) - Thai consumers are most concerned with saving for this reason (81%), compared with consumers in Vietnam who are least concerned (48%).

"The strong precautionary motive of holding cash observed in Asia Pacific is a direct reflection of consumers' perception of economic uncertainty and their experiences of recent market volatility. Everything else being equal, this is the single most important factor that determines whether consumer spending will go up or down in the next 12 months," according to Dr. Yuwa Hedrick-Wong, economic advisor at MasterCard Worldwide in Asia Pacific.

"Consumers purchasing priorities are also being affected by strong precautionary saving. While dining and entertaining as well as personal travel remain the top spending priorities in virtually all key markets in the region, spending on auto and big ticket item consumer electronics are conspicuously absent among the top three spending priorities in all the markets surveyed, Dr. Hedrick-Wong added.

Apart from having an emergency stash, other main reasons for saving are - retirement (45%), investment (36%), and buying property (31%). Not surprisingly, consumers who are over 30 year of age are more keen to save for retirement than consumers under 30 (53% versus 28%).

Consumers earning more than US$30,000 a year are also more concerned with saving for retirement than those earning less than US$10,000 per year (59% versus 31%). The under-30 consumers, single, and divorced/widowed are among the most enthusiastic in saving for investment (40%, 41%, and 49% respectively). The under-30 consumers are also the keenest in saving to buy property (41%).

On average, consumers in Asia Pacific expect to save between 11%-20% of their income over the next 12 months. Less than a fifth (16%) of consumers expect to save more than 30% of their income over the next year. Close to a tenth (8%) of consumers say they expect to save more than 40% of their income.

Consumers in Vietnam (34%), Korea (33%), Taiwan (25%), Singapore (21%), Hong Kong (20%) and China (19%) expect to save more than 30% of their own income in the next 12 months.

Regionally, only 8% of consumers admit they expect zero savings in the next 12 months. Consumers in New Zealand, Australia, Korea, and the Philippines, are the least savings oriented in the region with a little less than a quarter of respondents (22%, 21%, 19% and 16%) respectively saying that they do not expect to save anything at all over the next year.

Of the 13% of respondents across the region who did not consider savings to be important, the top reasons for this are that they do not earn enough to save, they believe in enjoying life now as much as they can, and they have no problems earning money.

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