Consumer confidence across the
Asia Pacific region has fallen seven points from six months ago as a result of the current economic volatility and the
concerns over a global economic recession, according to the latest MasterCard Worldwide Index of Consumer Confidence.
Consumers are also
tightening their belts, with 70% of the region’s consumers looking to cut back on their discretionary spend for the next 12 months. These were
some of the findings from the inaugural MasterCard Worldwide Index of Consumer Purchasing Priorities and the latest MasterCard Worldwide
Index of Consumer Confidence which were released today.
“Consumers across the region are bracing themselves
for tougher times ahead in 2009. In most markets across Asia, more than half of the respondents surveyed are looking at cutting back on
discretionary spend. Australia and New Zealand stand out as the only two markets where less than half of the consumers surveyed indicated a
reduction in discretionary spend over the next 12 months. While many are looking towards China to help maintain economic growth momentum
in the region, the fact is the Asia’s economic powerhouse itself is slowing down fast, with 60% of Chinese consumers indicating a reduction in
discretionary spend,” said Dr. Yuwa Hedrick-Wong, economic advisor,
Asia Pacific, MasterCard Worldwide.
MasterCard Worldwide Index of Consumer Confidence is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral. Five economic factors are
measured: Employment, the Economy, Regular Income, Stock Market and Quality of Life.
• Only four
- Vietnam (88.1), China (76.6), India (63.9) and Singapore (62.3) - out of the 14 markets surveyed are optimistic about the first half of
2009, although all but Vietnam’s score had declined from six months ago. Australia was neutral
(49). Hong Kong, having dropped from 83.1 six
months ago to 41.8 currently, and Taiwan (from 71.3 to 32.1 currently) experienced the greatest decline in consumer confidence.
• The latest region wide consumer confidence score of 47.4 is below the score six months ago
(55) and a year ago (67.3), but above the
average of 32.3 during the 1997-98 Asian economic.
• Overall consumer outlook across the region fell for all five indicators measured from six months ago - Employment (from 54.2 to 41.2),
Economy (from 51.8 to 42.1), Quality of Life (from 48.2 to 44) and the Stock Market (from 53.4 to 45.5). The outlook for Regular Income (from 72.2
to 64.3) declined but remained optimistic.
MasterCard Worldwide Index of Consumer Purchasing Priorities
• Consumers across the region currently spend an average of between 10 – 20% of their personal annual income on discretionary items. Some
30% of consumers spend 21% - 50% of their personal annual income on discretionary items, and 5% of respondents said they usually spend
more than 50% of their personal annual income on discretionary items.
• Seventy percent of the region’s consumers, however are looking to cut back on discretionary spend over the next 12 months. Markets with the
highest number of consumers looking to reduce expenditure are Taiwan (90.8%), the Philippines (90.5%) and Korea (85.5%). New Zealand
(44%), Australia (46.5%) and China (60.1%) have the least number of respondents looking to reduce their discretionary expenditure over the
next 12 months.
• Over the 12 months ahead, male counterparts (69%) are less likely to cut back on their discretionary spending as compared to female
• Younger consumers are less likely to cut back on spend as compared to their older counterparts. 68.1% of consumers aged 30 years and
below would cut back on spend, as compared to 71.9% of consumers aged 56 years and above.
• Across the region, Dining and Entertainment is the top discretionary spend priority (59%) for the next 12 months, followed by Fashion and
Accessories (46%), Children’s Education2
• One in three consumers is looking to save more than 20% of their income over the next 12 months. Saving is important to consumers in all
markets, especially to the Filipinos (97%), Indonesians (96%), Malaysians (93%), Indians (92%) and Thais (90%). Even China, which was at the
lowest end of the list, had 78% of consumers stating that saving was important. (44%) and Personal Travel (42%). Dining and Entertainment is
the top purchasing priority in 11 out of the 14 markets surveyed, with the exception of India, Korea and the Philippines where Children’s
Education ranked top.
The MasterCard Worldwide Index of Consumer Confidence and MasterCard Worldwide Index of Consumer Purchasing Priorities are based on
consumer surveys conducted by MasterCard across the region. A total of 6,019 consumers were surveyed in 14
markets (Australia, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore,
Taiwan, Thailand and Vietnam) between 1 to 29
September 2008. Data collection was via personal, telephone and Computer Aided Telephone interviews, with the questionnaire translated to
the local language wherever appropriate and necessary.
The new MasterCard Worldwide Index of Consumer Purchasing Priorities, which will be
released annually, provides valuable insights into consumers’ savings and expenditure behavior and their discretionary spending priorities for
the 12 months ahead. The long running MasterCard Worldwide Index of Consumer
Confidence provides information on consumer sentiment across the region.
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