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Consumer Confidence Plateaus In Southeast Asia; Strong Focus On Saving And Economizing Household Expenses

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  • Indonesia, the Philippines, Thailand and Malaysia still the most optimistic markets despite declines in latest quarter
  • Majority of Southeast Asian consumers channelling spare cash into savings
  • As many as nine in 10 consumers say they have changed spending to save on household expenses

SINGAPORE, 30 0CTOBER 2013 – Consumer confidence in Southeast Asia in Q3 2013 continues to rank among the highest globally, despite having leveled out in the latest quarter, while consumers indicate they are focusing more on saving for the future and reprioritizing their discretionary spending to save on household expenses, according to the latest Consumer Confidence Index released today by Nielsen, a global information and measurement company.

According to the Nielsen Global Survey of Consumer Confidence and Spending Intentions, Indonesia reported the highest index score globally of 120 in Q3 2013 (down four points on the previous quarter and 26 points above the global average of 94), followed by the Philippines which recorded a three point decrease to 118. Thailand and Malaysia also featured amongst the most confident nations despite recording slight declines over the last two quarters. Confidence in Thailand fell by two points to 112 in Q3 2013 compared to the previous quarter, and Malaysia also recorded a two point decline to 101. Confidence in Singapore increased by three points to 98 in Q3, and Vietnam increased two points to 97. (See Chart 1).

The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns, and spending intentions amongst more than 30,000 respondents with Internet access in 60 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

“Although four Southeast Asian markets recorded a fall in consumer confidence compared to the previous quarter, it is important to keep these modest declines in perspective. Despite declining four index points, Indonesia reported the highest consumer confidence index globally for the third consecutive quarter,” said Matt Krepsik, Executive Director of Nielsen’s Marketing Effectiveness business in Southeast Asia, North Asia and Pacific. “These latest Nielsen findings suggest a level of cautious optimism throughout Southeast Asia as consumers balance their expansion of wealth between spending and channelling their spare cash into savings to ensure their future financial security.”

PERCEPTIONS OF STATE OF PERSONAL FINANCES

The primary contributor to declines in consumer confidence across most of Southeast Asia was a slip in consumers’ perception of personal finances for the year ahead compared to the previous quarter. Indonesians continue to have the world’s most optimistic view on their financial position with 80 percent saying their personal finances were good/excellent in Q3 2013, down four points compared to the previous quarter, but still 25 points above the global benchmark of 55; followed by the Philippines (down two points to 77%), Thailand (down one point to 68%) and Malaysia (down two points to 60%).

Conversely, the financial outlook improved for consumers in Singapore (up four points to 54%) and Vietnam (up two points to 50%), although remained slightly below the global average. (See Chart 2). 

INCREASED FOCUS ON SAVING SPARE CASH

Southeast Asians continue to rank among the world’s biggest savers, and channelling excess funds into savings was the number one area cited by consumers in the region after covering essential living expenses. In Indonesia, more than three in four consumers are saving their spare cash in Q3 2013 (up five percentage points versus previous quarter to 76% and 24 points above the global average of 52%), followed by Vietnam (up four points to 72%), Thailand (up five points to 68%), the Philippines (down three points to 67%), Singapore (up four points to 64%) and Malaysia (down four points to 57%).

Despite the levelling of confidence, consumers still indicated they were prepared to channel a portion of their spare cash into holidays, new technology, and investing in shares and stocks. (See Chart 3).

SEEKING VALUE AND INVESTING FOR THE FUTURE

Up to nine in 10 Southeast Asian consumers say they have changed their spending to save on household expenses over the last year. Consumers in Thailand and Vietnam showed the strongest inclination to curb household expenses (90%), the highest level recorded globally in the Nielsen survey and 26 points higher than the global average of 64 percent; followed by Indonesia (82%), the Philippines (80%), Malaysia (79%) and Singapore (62%).

Areas where consumers indicated they would look to cut back to save on household expenses included fashion and on out-of-home entertainment. Consumers in Vietnam were the most likely to reduce their spending on new clothes (62%), followed by Malaysia (61%) and the Philippines (61%), while Vietnamese consumers also indicated the strongest inclination to cut back on out-of-home entertainment (60%), followed by Thailand (57%) and Malaysia (52%). (See Chart 4) 

“Southeast Asian consumers are thrifty value-seekers and are prioritising their household expenditure as they look to invest for the future,” noted Krepsik.  “While focusing on saving remains a high priority, consumers are experience-oriented and are willing to spend on recreational activities and other big ticket items such as holidays, and new technology. Discretionary spending on items including new clothes and basic out-of-home entertainment are the areas they are likely to cut back on in order to save on day-to-day household expenses and boost their wealth.”

About the Nielsen Global Survey

The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted between August 14 and September 6, 2013, and polled more than 30,000 online consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa, and North America. The sample has quotas based on age and sex for each country based on their Internet users, is weighted to be representative of Internet consumers, and has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60-percent Internet penetration or 10M online population for survey inclusion. The China Consumer Confidence Index is compiled from a separate mixed methodology survey among 3,500 respondents in China. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.

About Nielsen

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands. For more information, visit www.nielsen.com.

Contact

Deanie Sultana, +61 431 483 176, deanie.sultana@nielsen.com