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November 3 2009
Hong Kong
Consumer confidence in Hong Kong last month rebounded to its highest level since 2007at 93 points as consumers regained optimism in local job prospects and started to return to pre-recession spending habits, according to the Nielsen Global Consumer Confidence Index. Hong Kong’s consumer confidence index (CCI) jumped 14 points in the third quarter compared to the previous quarter - the highest increase among 54 markets surveyed.
“After several quarters of restraint, consumers resumed spending on discretionary items such as new clothes, out-of-home entertainment, technology and holidays which they cut back on a year ago, said Oliver Rust, Managing Director for The Nielsen Company in Hong Kong. “Since the second half of 2007, consumer confidence in Hong Kong has been on a steady decline, but in the past six months this trend has reversed significantly. The pace of the recovery has accelerated in the last three months.”
In the latest Nielsen survey, the number of Hong Kong consumers who said they were in recession dropped by nearly 30 percent in the third quarter compared to the previous quarter.
One of the key factors behind Hong Kong’s surge in consumer confidence in Q3 is consumers’ perceptions for improving local job prospects, which has positively influenced their perception of personal finances and encouraged them to open their wallets.
When consumer confidence in Hong Kong fell to its lowest level on record in April this year, only 5 percent of consumers described their job prospects as “good or excellent”. Last month this number increased to 41 percent.
“In April 2009, Hong Kong ranked as one of the world’s top ten most pessimistic countries about local job prospects. Today, it is one of the world’s most optimistic markets for job prospects – it’s a significant turnaround and demonstrates how quickly consumer sentiment for the domestic labour market and the economy has rebounded,” observed Rust.
Consumers’ optimism towards their personal finances also rose accordingly. Last month, more than half (55%) of Hong Kong consumers described their state of personal finance as good compared to 37 percent six months ago.
“Hong Kong consumers feel that the worst of the global financial recession is behind them and early indications show that they are looking to spend on high ticket items,” said Rust.
“According to the survey, in the third quarter, consumers’ willingness to spend, or predicted purchasing habits rebounded to nearly the same levels they were pre-downturn. In the latest survey, Hong Kong featured in global top ten rankings for spending on out-of-home entertainment, holidays/vacations and upgrading new technology (PC’s, mobile phones),” added Rust.
Hong Kong consumers’ strong savings culture continues to dominate their financial habits. After covering for their essential living expenses, 71 percent of Hong Kongers are putting spare cash into savings, followed by investing in the stock market (49%) and spending on social life (47%).
Despite the buoyant turnaround in consumer confidence in the past six months, the economy remains the top concern for Hong Kong consumers.
“The steep decline into recession and the recent rebound, highlights how renewed optimism in Hong Kong, especially following China’s significant boost in Q3 Gross Domestic Product (GDP) figures. The growth in China has in part been driven by the 4.1trillion RMB Government stimulus packaged designed to drive local consumption and it’s evident that it is working,” added Rust.
In addition, spending on basic groceries and Fast Moving Consumer Goods (FMCG) categories has remained stable throughout the year and Q3 2009 has seen only marginal growth of 3% in value sales. Although the FMCG category sales did not decline even during the downturn, the revival in consumer sentiment has yet to boost this sector’s sales further.
“While consumers cut back on discretionary categories like snacks and confectionary during the year, the overall Non Food categories maintained momentum driven by increased in-home usage of skin and beauty care products as well as preventive measures to guard against the H1N1 outbreak during the year,” said Rust.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing information, media information, online intelligence, mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com
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