Asian consumers divided on confidence

11 February 2013

NEW YORK: Consumer confidence in the Asia-Pacific region continued to edge upwards during the final quarter of 2012, new data shows.

The quarterly Global Survey of Consumer Confidence and Spending Intentions from Nielsen, the market research firm, recorded a one point rise in its confidence index to 101, as five countries in the region reported higher consumer confidence than the third quarter of the year.

The headline figure, however, obscures some growing divisions. "Similar to Europe, we are seeing an increasingly polarized Asia-Pacific region," Venkatesh Bala, chief economist at the Cambridge Group, a part of Nielsen, told Campaign Asia.

"On the one hand, there are high population markets with a robust consumption base like China, India and Indonesia. On the other hand there are export dependent markets like South Korea and Taiwan that are more exposed to precarious global economic conditions."

India topped the list with a confidence index of 121, up two points on the previous quarter, followed by the Philippines on 119, up one point.

Indonesia was in third place on 117, but this was down two points on Q3 2012. Thailand, in fourth place, recorded the biggest increase across the region, rising three points to 115. In fifth place, China rose two points to 108.

Hong Kong fell four points to 85, a figure which represents the steepest drop over a year: in Q3 2012 the special administrative region's index stood at 99.

Bala pointed out that Hong Kong, as the region's financial centre, had been adversely affected by the Eurozone crisis, while further uncertainties had been created by elections and China's new leadership.

Elsewhere, Taiwan also recorded a four point fall to 66, while Australia and Singapore both saw a three-point drop to 95.

South Korea continued to show by far the lowest confidence in the region, dipping a further two points to 38.

The study also found that 59% of respondents across the region felt the state of their finances was good or excellent, up two points from Q3 2012.

Caution reigns, however, as a similar percentage indicated they were putting off buying items they wanted. And rather than spending, some 58% choose to put their spare cash into savings.

Data sourced from Campaign Asia; additional content by Warc staff