Political Concern from Hong Kong Consumers Reach its Highest Point
HONG KONG, 17 November, 2014 – Hong Kong’s consumer confidence index reported a four-point increase over the previous quarter, from 103 to 107, according to consumer confidence findings from Nielsen.
In the latest round of the survey, conducted August 13 – September 5, 2014, global consumer confidence edged up one index point in the third quarter to a score of 98 — an increase of one point from the previous quarter and two points from the start of the year. Within the region, consumer confidence in Hong Kong is higher than that in Taiwan (79) and Singapore (103), but lower than in China (111). Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.
Drivers of Consumer Confidence
According to Nielsen’s findings, optimistic level for the key index drivers - job prospects, state of personal finance and readiness to spend, all recorded a rise in the third quarter. Specifically, positive outlook on consumers’ willingness to spend increased from 47% to 53%. Positive outlook among respondents towards personal finance increased from 54% to 60%. Consumers also showed positive outlook on job prospects, resulting a 5-percentage-point increase from 54% to 59%.
“The rise of consumer confidence in third quarter was caused by a number of factors.” said Eva Leung, Managing Director, Nielsen Hong Kong and Macau. “The positive performance on Hang Seng Index in late August attracted some Hong Kong consumers to utilize their spare cash on stock investments. Besides, the earlier Mid-Autumn Festival contributed an upward trend on retail sales performances.”
When comparing to last quarter, discretionary spending intentions among Hong Kong consumers increased across all categories measured, with the biggest rise on out-of-home entertainment (43%), which increased by 7 percentage points. Consumers showed more positive in buying new clothes (28%) or spending spare cash on holidays (26%). Putting cash into savings is still the favourite choice for most Hong Kong consumers, with 74% in this quarter.
What are consumers concerned about?
For the first time in 2014, consumers’ concerns over political stability (13%) came top of the list, overriding economic concern by 1 percentage point. “Uncertainties remained regarding the Occupy protests on local economy,” said Leung. “Some complained sales had plunged as a result during the Golden Week in October. While the CCI fieldwork was done by early September, we use another approach to know more about its impact on consumer confidence level.”
Overall retail sales, according to the Government, still made moderate growth in September. The third quarter GDP also grew at a faster-than-expected 2.7% accordingly. Data from Nielsen’s ScanTrack also shows that sales volume in selected categories, such as cooling sheets, increased over a double in the first week of October.
“Judging by insights from different data, it is too early to gauge the overall impact of the Occupy protests, especially towards consumers’ confidence level. Local consumption is still strong to some extent, and more insights will be revealed in later phase in terms of its impact on economy.” Leung concluded.
While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of existing Internet users, not total populations. In developing markets where online penetration is still growing, audiences may be younger and more affluent than the general population. In addition, survey responses are based on claimed behavior, rather than actual metered data.