Affluent consumers shun material goods, opt for family time and altruism
The Visa Affluent Study 2013 has revealed that it is no longer all about big brands and flashy items for the well-off, but family time and charity that now drive how they spend.
The study, conducted across Asia Pacific and the Middle East, looked at affluent consumers’ spending habits, priorities, optimism about the future and indexed their propensity to spend on discretionary items in the future.
China, followed by India and Indonesia are the countries with the most positive outlook on the economy which in turn led to them stating that they were planning to spend more on discretionary items over the coming year; while Japan, where they are more pessimistic about economic growth, ranked the lowest in terms of future discretionary spending.
However, in markets such as Hong Kong, South Korea and Singapore, the affluent plan to spend modestly despite their lack of confidence in the economy.
Family holidays, donations to charity and evenings out have emerged as the top drivers of future discretionary spending across the region. Family holidays emerged in first place in all markets except Indonesia and the United Arab Emirates (UAE), where they chose to spend more on charitable donations, and China and Hong Kong, where they chose to spend more on evenings out. Uniquely, Indonesians rated buying a new car and jewelry among their top five discretionary spends and also showed a greater tendency to spend on impulse.
The study also revealed that more than four out of five respondents believe that sharing a full life with their family and friends is what matters most to them, with only half saying that owning the best brands defined luxury for them. Furthermore, unique experiences with personalized services rated highly with the affluent in India (83 percent) and China (80 percent).
Iain Jamieson, Visa country manager for the Philippines and Guam, says: “The Visa Affluent Study suggests that there is a strong correlation between the expectation of positive economic performance and, therefore, the likelihood to spend more on discretionary items. This is of course natural, as affluent consumers may expect more disposable income with a stable or growing economy.”
Jamieson continues, “What is perhaps more surprising is that most of the affluent agree that wealth is not about physical status symbols such as the latest designer handbag or flashy watch, but about experiences and enjoying life to the full with friends and family. They are also increasingly motivated to assume greater responsibility toward helping others, which is reflected by the average affluent respondent making five charitable donations last year.”
The meaning of affluence and luxury was also generally agreed upon across the regions with one exception: China. The top earners in China believe that affluence creates influence (81 percent). In other countries, affluence is perceived as insurance, providing certainty in an uncertain world (73 percent) and as a means to give back to society (71 percent). Respondents also believe that affluence brings both greater responsibility and allows them to build a legacy (both 70 percent), with responsibility weighing in at 92 percent in Indonesia. Only 66 percent overall agreed that affluence brings with it the expectation that one will build more wealth.
For more information on the Visa Affluent Study 2013 and for country-specific data, please visit www.visa.com.sg