Despite The Recent Crisis
Global market intelligence firm Synovate today released the Hong Kong results of its global money and finance survey during a panel discussion moderated by Brendan Shair, Managing Director of Synovate in Hong Kong, at the Hong Kong Institute of Bankers Banking Conference.
Synovate surveyed around 11,400 people from 16 markets across the world to find out what had changed about their money management style and attitudes in the year since the global financial crisis hit.
Trust in Hong Kong's financial system
Hong Kong consumers are the second highest group (88%) globally to state that there is a need for more government regulations on the financial services industry to reduce the risk of another similar economic crisis.
"Many consumers in Hong Kong are also investors. This is an important part of their life, sometimes every day, so they want the government to take any needed actions to ensure the financial system is secure," comments Shair.
"However, before we draw a straightforward conclusion on the state of Hong Kong's financial system, further results show that a need for more regulation does not necessarily mean consumers are not confident in the current system.
"Fifty-eight percent of consumers in Hong Kong said they still trust their financial institutions, which is 20% higher than the global average. Hong Kong consumers are the top group who state this across the 16 markets surveyed. They feel safe with the current system, but if it can become even more secure and they are more protected, the better.
"Despite the volatility of the market, many will not abandon it. We have been through the turbulent times of the Asian financial crisis and a hard hit of SARS. While people in Hong Kong haven't necessarily forgotten about the money they lost in the market at those times, they show the vitality of moving onward and bouncing back quickly," said Shair.
The three markets with the most people indicating a decline in trust of financial institutions are the UK (72%), France (68%), and Serbia (67%).
Reality of the crisis: keep on spending but with changed mentality
Although consumers in Hong Kong do not seem to be dramatically impacted by the economic crisis, indicated by 56% of consumers who did not change their financial habits in the past six months and 94% who did not delay purchases or spent less, many consumers have indicated changes to their attitude towards money.
Fifty-six percent said the economic crisis has permanently changed their attitudes about the importance of saving money, while 59% are going to do their best to not go back to spending what they used to before the downturn.
Close to 80% of people recognize that increasing their savings is more important than reducing debt.
"Similar to the findings from Synovate PAX 2009, which studies elite adults in 11 markets across the Asia Pacific, Hong Kong consumers are still spending despite the condition of the economy. Habits and mindsets, however, have surely been impacted as we have seen in this study. This is a very important time for companies to study and figure out the current priorities for consumers. Marketers should realize it is a continuous drive for their products and services, instead of decreasing their marketing and ad spend during the downturn."
Life goes on but less flashy
Major events in different life stages have not been affected by the downturn.
The majority of consumers did not postpone or spend significantly less on major life events such as having a wedding (98% did not postpone or spend less), having a baby (98%), and purchasing (97%) or renovating a home (95%).
Hong Kong consumers also continued spending on new TVs, computers, and other large appliances (86% did not postpone or spend less), and going on holiday overseas (84%) in the past six months.
When asked why they delayed their purchase when such situations arose, Hong Kong consumers are the highest group globally to indicate it is because "it's a luxury item that they don't really need," and "it just seems wrong to spend a lot at the moment."
Brendan further comments:
"There is the social pressure to be less flashy in the downturn. We have participants in focus groups commenting that they requested not to have their luxury purchase put into the branded shop bag, and into a regular plastic bag instead so they will not appear as spending frivolously when the economy and people around are down and gloomy."
Additional reasons on why consumers in Hong Kong have postponed spending or spent significantly less in the past six months can be seen in the below figure.
About Synovate global survey on money and finance
This Synovate In:fact survey on money and finance was conducted in August 2009, Synovate surveying more than 11,400 respondents across 16 markets to find out what they had changed about their money management style and attitudes in the year since the global financial crisis hit.
The markets covered in this survey are Australia, Brazil, Canada, Denmark, France, Hong Kong, India, Malaysia, New Zealand, Russia, Serbia, South Africa, Spain, Taiwan, UK and the USA.
Synovate, the market research arm of Aegis Group plc, generates consumer insights that drive competitive marketing solutions.
The network provides clients with cohesive global support and a comprehensive suite of research solutions. Synovate employs over 6,400 staff across 62 countries.
For more information on Synovate visit www.synovate.com .
Hong Kong - 26 November 2009