Hong Kong consumers’ confidence in Q2 2018 was not as strong as that in Q1, and they were more willing to invest their spare cash into savings, according to a study conducted by Nielsen and the Conference Board.
The consumer confidence index stood at 105 points, two points below Q1 2018. The slight decline was mainly attributed to consumers’ decreasing readiness to spend amid uncertain economic conditions. This is the second consecutive quarter-on-quarter (qoq) drop of the index, which reached 108 in Q4 2017.
The consumer confidence towards job prospects remained strong at 59%, one percentage point below Q1 2018. The result reflected the wider macro-economic environment as the overall unemployment rate remains at an all-time low of 2.8%.
Michael Lee, managing director of Nielsen Hong Kong and Macau, commented: “With stable inflation and consumer confidence, we expect this momentum to continue in Q3 but at a relatively stable pace.”
On the other hand, 72% of respondents said they would invest their spare cash into savings after covering essential expenses – the figure was four percentage points higher than Q1 2018. The Hang Seng Index decreased by 5% in Q2 2018 compared to the previous quarter, which resulted in reduced sentiment, from 42% in Q1 to 41% in Q2, to invest in shares/stocks/mutual funds.
Consumers also reduced spending on vacations and out-of-home entertainment – both categories has decreased by one percentage point.
The survey also showed that the economy (28%) and health (27%) were two major concern in the upcoming six months. A respective 17% of consumers considered political stability and work/life balance as major concerns in the next six months.
Speaking of the result, Lee said: “Although the business environment in Q2 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 premiumisation 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 maximise business return.”