SINGAPORE: China's economic slowdown is affecting consumer confidence across the wider Asia region, new data has shown.
According to Mastercard's recently released consumer confidence data, consumer positivity dropped significantly in 12 of the 17 markets surveyed across the region in late 2015.
Consumer sentiment across the region is now the lowest since 2012, with developed markets in particular feeling the pinch. The downward trend has continued since mid-2015, when the scale of China's economic slowdown became apparent.
China's volatility is rattling neighbouring markets, and with senior Chinese officials now under investigation regarding the accuracy of economic data there are fears that the landscape may be even more gloomy than anticipated.
The numbers will give brands concern as mainland China's economic problems bleed into markets with a high level of exposure, such as Singapore, Hong Kong and Taiwan. The luxury sector in particular faces tough times ahead as Asia's high end markets bear the brunt of the slowdown.
For brands looking to buffer potential losses in mainland China with increased sales in other markets, the news may not be good.
Singapore – South East Asia's wealthiest market – recorded a 20.9% drop in consumer confidence as the Singaporean economy struggles against strong headwinds. The drop is classified as an "extreme deterioration" in the data. Hong Kong is down 16.8%.
The greatest drop in confidence, however, came in Sri Lanka where sentiment dropped more than 25 points in the last half quarter of 2015.
Taiwan is the most pessimistic market regionally, with just 28% of consumers feeling positive about the future, a 20 point drop in just a few weeks. Just 33% of South Koreans and Malaysians surveyed felt optimistic, among the lowest in the region.
However there is good news emerging from Asia's developing markets, which continue to grow apace. Consumer sentiment in Indonesia, Vietnam and Myanmar is on the rise. Myanmar, which is rapidly opening up for business, increased 41.1 percentage points to 95.7% confidence in late 2015. The Philippines also remains buoyant at 82.3% confidence.
Data sourced from MasterCard, Mumbrella, New York Times; additional content by Warc staff