The Conference Board® Global Consumer Confidence Survey is a quarterly survey used as an indicator of consumer sentiment conducted in collaboration with Nielsen.
Covering more than 32,000 respondents across 64 markets, the survey measures consumer perceptions about local job prospects, personal finances and spending intentions and results suggest strong growth opportunities for Hong Kong’s consumer centric businesses.
In Hong Kong, the consumer confidence index remained strong at 105 points despite a slight drop of two points from the first quarter of 2018. The drop was mainly attributed to consumers’ decreasing readiness to spend in light of uncertain economic conditions. However, consumer confidence towards job prospects remained strong at 59% (Q1 2018: 60%) and once again reflected the wider macro-economic environment where the overall unemployment rate remains at an all-time low of 2.8%.
“Overall retail performance registered impressive growth of 12.8% in Q2. Spending from mainland visitors supported the overall momentum leading to a rebounding in sales of both luxury as well as non-luxury categories. With stable inflation and consumer confidence, we expect this momentum to continue in Q3 but at a relatively stable pace,” said Michael Lee, Managing Director, Nielsen Hong Kong and Macau.
There has been an increase in the consumer price index of 2.7% as of June 2018 compared with a year ago, an increasing number (+4%) of Hong Kong consumers in the second quarter indicated they will invest their spare cash into savings (72%) after covering essential expenses.
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Moreover, the 5% drop in the Hang Seng Index in the second quarter of 2018 compared to the previous quarter has resulted in reduced sentiment (-1%) to invest in shares / stocks / mutual funds (41%).
Consumers also reduced discretionary spending on items such as vacations (29%) and out-of-home entertainment (37%) though overall purchase intention remained strong.
According to the survey, Hong Kong respondents cited the economy (28%) and health (27%) as their major concern in the next six months. A respective 17% of consumers considered political stability and work/life balance as major concerns in the next six months.
“Although the business environment in the second quarter of 2018 has been positive, Hong Kong’s economy is expected to be affected by instability in the global economy. It is therefore important for retailers and brand owners to put more effort into product premiumization and innovation. To succeed in the era of customer experience, understanding consumer needs and leveraging the technological advancement to enhance customers’ shopping experience is crucial in order to maximize business return,” Lee added.
Consumer Confidence in Asia-Pacific remained high at 112 points, despite a decline of three points from the previous quarter. Within Asia Pacific, 11 of the 14 countries showed a decline except Malaysia, Australia and Indonesia. However, China (113), India (124), Indonesia (127), Malaysia (117), Philippines (127) and Vietnam (120) are in the top-10 of countries with the highest levels of consumer confidence globally.