The Moodie Report

New consumer research reveals evolving spending habits among Asian nationalities – 12/05/09

Published: 11/05/09

Source: ©The Moodie Report

By Mary Jane Pittilla

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Marketing expert Viveca Chan addresses the 2009 TFWA Asia Pacific conference on the continuing consumer confidence among affluent Chinese people

ASIA PACIFIC. Newly conducted research has thrown up some interesting observations about the changing spending behaviour of affluent Asian travellers, the TFWA Asia Pacific conference heard on Monday.

In a particularly enlightening speech using data from the charge card company, American Express International Vice President and Area Market Head, Global Merchant Services ASEAN and India Peter Kapoor shared the results of a study of affluent passengers (passengers with liquid assets of at least US$300,000) at Singapore Changi, Hong Kong International and London Heathrow airports.

The research found that in 2008, compared to the previous year, total passenger spend had grown by +34% at Changi, by +6% at Hong Kong and by +11% at Heathrow.

At Changi the average transaction size at all types of outlet was S$108 for 2008, with restaurant spend at S$27 and retail outlets S$112.

At Hong Kong International Airport average transaction size was HK$1,002, with dining spend at HK$242 and retail at HK$1,226. Heathrow's average transaction size was GBP129, with dining at GBP21 and retail at GBP61.

Noting that Hong Kong's dining spend was twice that of Changi's, Kapoor asked the audience of retailers: "Are you taking advantage of the opportunities – are you maximising your spend?" He also mooted the idea of a loyalty card scheme.

Further research conducted by Amex and Synovate, who quizzed focus groups in several markets, unearthed fresh insights on the changing lifestyles of travellers in Singapore, India and Hong Kong. While flashiness is out in Hong Kong, it's certainly still a factor among Indians, who love to show off, said Kapoor.

In Singapore, the survey found that "Talk value" was the new luxury among consumers. This newly coined phrase is all about "people enjoying experiences and the ability to talk about experiences to friends, colleagues and family," explained Kapoor.

Insights from India showed that travellers want nothing but the best, meaning they are very demanding consumers.

In Hong Kong, affluent people are connoisseurs and they love discovering new things – visiting watch factories in Switzerland, for example.

BUOYANT CONSUMER CONFIDENCE IN CHINA

In China consumer confidence remains high despite the global economic downturn, the TFWA conference heard. Speaking about the continuing resurgence of national pride in the country following the 2008 Olympics, Viveca Chan, Chairman and CEO of WE Marketing Group, said good quality was the most important factor for Chinese affluents when purchasing luxury goods.

Creating trust is important for this nationality, as the people are fearful of buying fake products. Among the items the Chinese are willing to pay more for are facial moisturisers, Chan noted.

The Chinese now want more subtle branding, according to Chan's consumer research, as well as unique packaging for gift-giving. A recognisable logo is very important, too. Linking your brand story to local Chinese culture or celebrities is vital, as is the establishment of freestanding stores in China.

JAPANESE STILL INTERESTED IN BRAND HERITAGE

Revealing new insights on the evolving tastes of the hard-pressed Japanese consumer, Japan Tourism Marketing Co Director and Vice President Marketing Masato Takamatsu told the TFWA conference attendees that value brands were performing the best in the Japanese market. Brands such as Uniqlo, Forever 21 and H&M were among those raking in the highest profits in 2008.

Although they are fearful of spending because of the financial crisis, Japanese consumers are still very interested in the heritage of luxury brands. Other trends include visiting Korea to buy brands, due to currency factors, and an increasing usage of discount outlet websites offering top branded products for up to 70% off the recommended retail price.

In general, the Japanese are keen to know the history and tradition of your brand, seek the best quality and good service – but don't be too pushy, warned Takamatsu.