|
12 December 2007
Hong Kong
Rising oil prices, the spread of the sub-prime credit issue in international markets, and the slow down in the US economy are all taking their toll on the confidence of the world’s consumers. According to the latest Global Consumer Confidence Study conducted by The Nielsen Company, more than a quarter of global consumers expect a global recession in 2008, resulting in a dip in confidence in 21 of the 48 markets surveyed.
Globally over a quarter of consumers anticipate a global recession in the next 12 months with people in Thailand, Taiwan and Italy leading the pack; and over half are concerned about the Unemployment (54%) and Inflation (51%) issue that a recession would bring about.
“In the world’s leading economy of the US, consumer confidence has seen a continual decline from late 2006 on the back of a number of negative economic indicators such as the anticipated economic slowdown, the weak Dollar, rising oil prices and the sub-prime issue creating increased debt for consumers,” said Ms Angel Young, Executive Director, Retail Measurement Services, The Nielsen Company, Hong Kong. “The unfavorable economic environment in the US is clearly having an impact on economies in the rest of the world, resulting in less upbeat consumer sentiment elsewhere.”
On the other end of the scale, 69 percent of the mainland Chinese and two thirds of Vietnamese do not believe in a recession anytime soon. In Hong Kong, amidst an upbeat market environment backed by positive economic indicators like improving employment, rising property prices and stock market etc, over half of consumers do not believe in a global recession in 2008. Nevertheless Unemployment (64%), Inflation (46%) and the Falling Property Prices (23%) were the top three major concerns among HK consumers in the event of a recession.
According to the Nielsen Global Consumer Confidence Index, first established in 2005, a continuing decline in global consumer confidence has been recorded, with an Index of 94 in the second half of 2007, down from 97 six months ago, and 99 in 2006.
The Nielsen Consumer Confidence Index – Top 10 Ranking
Globally, Norway superseded India as the world’s most optimistic market with a CI score of 135, up two points from the May survey. India ranked second at 133, representing a dip for the third consecutive round since its peak score of 137 in late 2006. Scoring 124 this time round, Denmark ranked a distant third, a position it has maintained for the past three rounds of the survey.
In addition to India, Asia Pacific markets including Indonesia (4th), Australia (4th), Hong Kong (5th), Vietnam (6th), New Zealand (7th) and Singapore (8th) were all among the world’s top 10 most optimistic making Asia Pacific the most optimistic region worldwide.
Table 1
Holiday Spending at Risk?
Clouded by a less upbeat environment, consumers are becoming more cautious about their personal finances and spending. “Globally, consumers have continued to err on the side of caution since the start of the year. Not only has the level of consumer confidence fallen in seven of the 14 market surveyed, but consumers’ readiness to spend has also been dampened,” observed Ms Young.
As another indication of a belt-tightening outlook, 13 percent of global consumers said they have no spare cash after covering basic living expenses and nearly two thirds of consumers think that it is not a good time or indeed a bad time to spend on things that they want, and only a third thinks it is a good time to spend (dropped by seven percentage points from 2006), putting holidays spending in the upcoming festive seasons in doubt for retailers around the world.
“Clearly consumers around the world are more cautious with spending – of the 48 markets surveyed, 26 recorded a continuing decline in people’s readiness to spend – an important signal for retailers who will need to put in extra effort to entice consumers to loosen their purse strings with the festive seasons of Christmas and New Year fast approaching,” added Ms Young. “Although Hong Kong people are an exception backed by the buoyant market environment, people’s disposable income is on the rise and they are more ready to spend than anyone else.”
In Asia Pacific, Hong Kong consumers appear to be most relaxed about spending, with 60 percent indicating their readiness to spend in the next 12 months and over three quarters are comfortable with the state of their personal finance.
Table 2
What are consumers going to spend on?
Despite softening intentions to spend, Holidays/Vacations (32%), New Clothes (31%) and Out of Home Entertainment (28%) have garnered most votes from the world consumers who claimed to have spare cash to spend after covering their essential living expenses.
With Hong Kong people holding up their strong spending appetite, taking Holidays/Vacations (47%) is the top choice for nearly half of Hong Kong people followed by buying New Clothes (37%) and Out of Home Entertainment (33%).
Savings and Investments
Saving for a rainy day continues to be popular among 42 percent of the world’s consumers and over half of those in Asia Pacific (52%), however consumers’ appetite to invest in the stock market for greater returns is rapidly gaining in popularity – 41 percent of people in Asia Pacific opting to put their spare cash into the stock market, a continual increase from the past three rounds of the survey.
Hong Kong (58%) again tops the world with most people saying they will invest in stocks and shares doubling the global average of 23 percent. In the fast-growing economies of China (57%) and India (51%) where the stock market has been under the international spotlight, consumers seem equally eager to get into the share market. (Table 3) Clearly a wave of investment heat is prevailing throughout Asia with the region being home to the world most eager to invest consumers.
Table 3
Major Concerns
Regardless of any global recession, consumers continue to worry most about the Economy (47%), Health (37%) and Job Security (30%) in the six months ahead. The top three concerns for Hong Kong people are Economy (63%), Health (49%) and Job Security (34%).
Taiwan (74%) tops the world with most people concerned about the state of the Economy in the next six months, followed by people in China (71%).
Among the Asia Pacific markets, people in China (63%), Hong Kong (49%) and Vietnam (48%) were most concerned about their health; while Vietnam (58%), South Korea (54%) and the Philippines (47%) ranked among the world’s top 10 most concerned about Job Security in the next six months.
The Least Optimistic
The world’s most pessimistic consumers hail mainly from Europe, although South Korea (54). Japan (59) and Taiwan (69) remain at the bottom of the global list as far as the Asia region is concerned. Indeed, the situation in Japan and Taiwan continues to snow-ball, with consumers’ confidence levels further deteriorating from the beginning of 2007.
Highlights of Hong Kong Survey Results:
- Over half of HK people do not believe that there will be a global recession in the next 12 months – among the world’s most optimistic
- In the event of a recession, Hong Kong people would be most concerned about Unemployment, Inflation and Falling Property Prices – a signal for HK consumers to take pre-cautionary measures in advance
- Hong Kong ranks the world’s fifth most optimistic market with a consumer confidence index at 118, stable throughout the year of 2007 but represents an increase by 7 index scores and a jump by five places when compare to the same period in 2006
- Hong Kong is among the world’s top 10 most optimistic in terms of job market (6th), state of personal finance (6th) and spending in the next 12 months (3rd); in fact, Hong Kong tops the Asia Pacific region when it comes to readiness to spend
- Holidays/Vacation; New Clothes and Out of home entertainment are the top three most popular spending options among HK consumers – good news for retailers of these industries
- The positive attitude towards spending can partly attribute to the improving job market and the buoyant stock and property markets. It is also evidenced by the fact that less people today (3%) claim they do not have any spare cash compare to 2006 (9%)
- Besides spending, Hong Kong people are equally eager to reap a profit from the booming stock market. Throughout 2007, HK people top the world as the most eager to invest when they have spare cash with the level of desire increases for several years now
- The number of people eager to put their spare cash into retirement funds is also on the rise – from only 8% in 2006 to 20% in 2007
- Because of the high penchant to invest and spend, Hong Kong people for the first time in recent years rank out of the top 10 most eager to save groups
- Regardless of the current economic environment and a relatively optimistic attitude, Hong Kong people are still mindful about the development of the Economy, Health and Job Security as these have direct impact to the outlook of the Hong Kong market.
The Survey
The latest survey, conducted from October to November, polled about 26,312 internet users in 48 markets from Europe, Asia Pacific, North America and the Middle East.
The Nielsen Online Consumer Confidence and Opinion Survey is the largest half-yearly survey of its kind, aimed at gauging current confidence levels, spending habits/intentions and current major concerns of consumers across the globe. The Nielsen Consumer Confidence Index is developed based on consumer’s
48 Markets Covered
Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China, Czechs Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, Italy, Japan, Korea, Latvia, Lithuania, Malaysia, Mexico, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Russia, Thailand, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Turkey, UAE, United Kingdom, US and Vietnam.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positionsin marketing information (ACNielsen), media information (Nielsen Media Research),online intelligence (NetRatings and BuzzMetrics), trade shows andbusiness publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in Haarlem, the Netherlands, and New York, USA. For more information, please visit, www.nielsen.com.
Back to Top
|
