Southeast Asian consumer confidence has gained further momentum in Q3 2014, with three Southeast Asia markets ranking in the top five most optimistic countries globally, according to the latest Nielsen Global Survey of Consumer Confidence and Spending Intentions.
Indonesian consumers are the second most confident globally, with the country’s consumer confidence score increasing by two points to 125 in Q3 2014 compared to previous quarter. The Philippines remains third most confident globally, scoring 115 points. Thailand’s Consumer Confidence Index score showed the highest jump in the region with an increase of eight points to 113 compared to last quarter. Consumer confidence in Singapore jumped five points to 103, the highest level since late 2011, while Vietnam’s Consumer Confidence Index jumped three points to 102, the highest level since late 2010. Malaysians are equally positive with a six point increase compared to last quarter (99 points). Globally consumer confidence remains steady at 98 points.
“The consistent, steady climb of consumer confidence in the region highlights strong underlying factors that are buoying consumer outlook on the future,” said Vishal Bali, Nielsen’s Managing Director of Consumer Insights in Southeast Asia, North Asia and Pacific. “The recently emerged clarity on the political front in some markets and a variety of underlying economic factors have helped drive the surge in consumer confidence.”
THE ECONOMY AND JOB SECURITY REMAIN TOP CONCERNS
While the majority of consumers across Southeast Asia share a positive outlook for the future, the current state of the economy remains one the highest concerns in the region. More than two in five consumers in Thailand (44%) list the economy as a key worry over the next six months, along with 33% in Malaysia, 27% in Vietnam and 24% in Singapore. A further one in three consumers in the Philippines (34%) feel uncertain about job security, 31% in Singapore, 26% in Thailand and 22% in Vietnam.
“While consumers in Southeast Asia continue to be upbeat about their future, financial security remains a top priority,” emphasises Bali. “Both job security and economic outlook have a direct impact on consumers’ degree of financial security, and hence remain key concerns.”
CAUTIOUS SOUTHEAST ASIANS ARE SAVING FOR THE FUTURE
Southeast Asian consumers remain focused on putting aside savings for the future with more than seven in 10 consumers in Vietnam (77%) and Indonesia (74%) stashing their spare cash into savings after covering essential living expenses. Consumers in other Southeast Asia markets are also diligently building nest eggs, including those in the Philippines (67%), Thailand (67%), Singapore (66%) and Malaysia (63%).
Along with channelling spare cash into savings and investing in stocks, consumers in the region are also eager to spend on big ticket items. Singaporeans are the most-inclined globally to spend their spare cash on vacations (51%), followed closely by Malaysia (47%) and Indonesia (41%). Meanwhile, around a third of consumers in the Philippines (37%), Vietnam (35%), Thailand (31%) and Singapore (31%) choose to spend their spare cash on new clothes.
“Southeast Asians are known for prioritising saving over spending, and it is this mentality which influences their careful spending patterns,” observes Bali. “Conversely, rising disposable income is driving the desire to seek out lifestyle upgrades such as vacations and buying new clothes.”
In the face of rising inflation across the region, a growing number of consumers are looking for ways to reduce their everyday household bills, and five Southeast Asia markets (Thailand, Vietnam, Philippines, Malaysia and Indonesia) rank in the top 10 globally when it comes to changing their spending to save on household expenses. Close to nine in 10 Thais (88%) have changed their spending in the past year to save on household expenses, the highest level globally, followed by 86% in Vietnam, 83% in the Philippines, 79% in Malaysia, 76% in Indonesia and 63% in Singapore. Spending less on new clothes, cutting down on out-of-home entertainment and trying to save on utility bills are some of the most common areas where consumers are looking to save.
“Consumers in Southeast Asia have a cautious approach when it comes to spending,” states Bali. “As their wealth increases, they remain frugal with their outgoings. And as prices increases they are on the look-out for ways to save on everyday expenses.”
Insights contained in this article are taken from The Nielsen Global Survey of Consumer Confidence and Spending Intentions which was conducted between 13 August and 5 September 2014 and polled more than 30,000 online consumers in 60 countries throughout Asia Pacific, Europe, Latin America, the Middle East, Africa and North America.