Asian consumers moderate spending

Regional - Households across South East Asia are beginning to tighten their belts as the economic crunch sets in, cutting back on luxury items like cigarettes, soft drinks, junk food and gourmet coffee.

A new report from the WPP-owned Research International, which polled 1300 people across six Asian countries, shows that consumers across Asia are starting to bargain shop and indulge less in impulse purchasing.

Research International said inflation has outstripped salary increases and household budgets are in worse shape compared to six months ago.

"We are seeing the dominance of a ‘smart' consumer - one who has not given up on consumerism but is shopping for specials, going to sales, cutting back on certain pleasures and trying to eliminate waste," Rosalynn Tang, MD of Research International Singapore, said.

But despite surging prices, SEA consumers are reluctant to stop purchasing their favourite brands.

The report found that 50% of respondents are continuing to buy their favourite cigarettes, personal care products and preferred fuel. But to make their dollars go further, 74% are seeking out cheaper home care, food and beverage products. When it comes to alcohol, consumers are taking to ‘happy hour' promotions and bar hopping to take advantage of cheaper prices.

However Tang added that the general mood of SEA consumers remains upbeat, with 20% experiencing improvements to their quality of life in the past 12 months and 39% believing that things will get better.