Southeast Asian consumer confidence in Q1 2014 remained strong with confidence levels in Indonesia, Philippines and Thailand ranked among the most-confident globally, and Singapore and Vietnam both remaining well-above the average global consumer confidence level, according to Nielsen’s Q1 2014 Global Survey of Consumer Confidence and Spending.
Indonesia’s confidence index score remained the highest globally for the fifth consecutive quarter at 124 points in Q1 2014 (unchanged from the previous quarter) while the Philippines came in third globally with 116 points, a two point increase compared to last quarter. Confidence levels among consumers in Thailand also remained positive at 108 points (down 1 index point versus last quarter). Both Singapore and Vietnam posted a confidence index score of 99 in the first quarter of the year, an increase of two points quarter-on-quarter for Singapore and one point for Vietnam. Malaysia saw the region’s largest decline in confidence between Q4 2013 and the Q1 2014, dropping six index points to 92, two points below the global average of 94 points.
“Overall, consumers’ confidence levels across Southeast Asia remain relatively high, particularly in Indonesia which has retained its year-long reign as the most confident nation globally,” observes Vishal Bali, Managing Director of Nielsen’s Consumerization Practice in Southeast Asia, North Asia and Pacific. “Encouragingly, across the region, consumers continue to feel confident and optimistic despite some uncertainty at a global level. This has resulted in stable scores across most markets on a yearly basis. The only exception is Malaysia which has recorded quarter-on-quarter declines for the past year. This is primarily driven by rising fuel and grocery prices due to the reduction in government subsidies in these areas.”
As consumer confidence levels across most of Southeast Asia remain stable in Q1 2014, so do consumers’ perceptions of their personal finances for the year ahead. Indonesians are most positive about their financial status with 83 percent saying the state of their personal finances over the coming 12 months is good/excellent (down 1 percentage point versus Q4 2013), followed by the Philippines (up 3 points to 79%) and Thailand (down 6 points to 63%).
The financial outlook for consumers in Vietnam, Malaysia and Singapore remained steady quarter-on-quarter. Vietnam saw a one percentage point increase in Q1 2014, with 56 percent of consumer perceiving their financial outlook in the year ahead as good or excellent, while Malaysia took a six point dip to 50 percent. Singaporeans’ perceptions towards the state of their personal finances remained unchanged at 54 percent compared to the previous quarter.
As consumers in this region continue to hold a positive perception of their personal finances, intention to save after covering essential living expenses also remained a high priority. More than three in four Vietnamese consumers (77%) channelled their spare cash into savings in Q1 2014 (up 3 percentage points versus Q4 2013 and 30 percentage points above the global average of 47%) as did 71 percent of Indonesian consumers (down 1 point), 70 percent of Singaporeans (up 6 points), 69 percent of consumers in the Philippines (up 1 point), 64 percent of Malaysian consumers (up 1 point) and 64 percent of Thai consumers (down 1 point).
“Consumers in this region are diligent in managing their finances and are conscientious savers,” notes Bali. “As awareness and availability of savings and investment vehicles increases, consumers across the region are looking to tap into these vehicles as a means of maximising their future financial outlook and planning for their golden years.”
More than eight in 10 Southeast Asian consumers say they have changed their spending habits over the past 12 months to save on household expenses. Consumers in Thailand and Vietnam are most inclined to limit their household expenses (87%), followed by consumers in Malaysia (83%), Indonesia (82%) and Philippines (80%). Singaporeans were the least-inclined of Southeast Asian consumers to change their spending habits (61%).
At least six in 10 consumers in Vietnam (64%), Singapore (64%), the Philippines (59%) and Malaysia (59%) have reduced spending on new clothes as a means of improving household savings. Other areas where consumers are cutting back include out-of-home entertainment and utilities.
“Southeast Asian consumers’ focus on reducing their household expenses is consistent with their focus on saving for the future,” notes Bali. “For markets such as Thailand and Malaysia, the desire to reduce overall household debt is driving efforts around reducing household expenses. Although income levels across the region are increasing, consumers remain cautious with their spending and are prepared to change their spending habits in order to increase their wealth.
“Despite their tendency to save for a rainy day, it is interesting to note that many Southeast Asian consumers are still willing to spend on holidays, and this is reflective of consumers becoming more sophisticated in their spending and the rising demand throughout the region for experiential offerings.”
Insights contained in this article are taken from The Nielsen Global Survey of Consumer Confidence and Spending Intentions which was conducted between 17 February and 7 March 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. Download the full report now or for more information contact Nielsen.