Southeast Asian consumers continue to show the highest optimism globally in the second quarter with an index score of 112, far-surpassing the global consumer confidence score of 96 points, according to a Nielsen report.
The report highlighted that while confidence levels in Southeast Asia remain relatively high, the Philippines was the only market where consumer sentiment increased in the past quarter, gaining seven points to rise to a score of 122—the country’s highest level on record.
However, Vietnam (104) reported Southeast Asia’s biggest quarterly decline in confidence (down eight points) followed by Malaysia (89), which dropped five points from the first quarter. Despite the declines, the Philippines, Indonesia (120), Thailand (111) and Vietnam remain among the top 10 most optimistic markets globally.
“Across Southeast Asia optimism remains high, but in this past quarter we’ve seen some signs of vulnerability emerge in certain markets. On the one hand we have markets like Philippines where we’re seeing a continued influx of foreign investments and a robust domestic consumption base. In comparison, markets such as Vietnam are starting to face headwinds such as declining foreign direct investment and a struggling retail environment,” observed Regan Leggett, Nielsen Client Service Director in Southeast Asia, North Asia and Pacific.
The state of the economy was one of the major concerns for consumers across the region with Thailand (45 per cent), Malaysia (43 per cent) and Indonesia (37 per cent) being the most concerned globally.
The economy was followed by job security for consumers in Southeast Asia (13 per cent), particularly in Singapore (31 per cent). Other major worries in the region include health, work/life balance, and increasing utility bills.
According to the report, SE Asian consumers continue to be among the world’s most conscientious savers, with seven in 10 (70 per cent) funnelling their spare cash into savings. Vietnam consumers are the biggest savers globally (73 per cent), while consumers from the Philippines (72 per cent) and Indonesia (69 per cent) rank second and third and those from Singapore and Thailand (66 per cent) tie in fifth place while consumers from Malaysia take the sixth spot globally.
The report highlights that SE Asian consumers are also increasingly looking for diversified investment strategies. Consumers in Thailand (39 per cent), Malaysia and Indonesia (32 per cent), Singapore (28 per cent) and the Philippines (27 per cent) are investing their spare cash into stock/mutual funds while consumers in Thailand (29 per cent), Singapore (26 per cent), Malaysia (24 per cent) and Vietnam (15 per cent) are channelling their spare funds toward building their retirement fund.
“Consumers across the region consistently show a strong propensity to plan for the future and save for a rainy day. Growing interest in diversified investment strategies is a good sign for industries such as banking and finance, as demand increases for a broader range of banking products and services,” said Mr Leggett.
According to the report, with the general cost of living continuing to rise across SE Asia, at least nine in 10 consumers in Thailand (90 per cent), Malaysia and Vietnam (86 per cent), Philippines (85 per cent), Indonesia (81 per cent) and Singapore (62 per cent) have adjusted their spending habits over the past 12 months in a bid to reduce household spending.
More than six in 10 consumers in Malaysia (64 per cent) and Singapore (62 per cent), Vietnam and the Philippines (60 per cent) are spending less on new clothing, while 52 per cent of Thais are cutting down on out-of-home entertainment and 50 per cent of Indonesians are delaying technology upgrades in their effort to reduce household expenses, the report highlighted.
But while consumers remain conscientious toward securing their finances, an increasing number are splurging on holidays, including nearly half of Singaporeans (49 per cent), 45 per cent of Thais and Indonesians, and two in five Malaysians (40 per cent).