Survey: Over 33% of HKers expect increase in discretionary spending ahead of Christmas

One-third (33%) of Hong Kong consumers expect an increase in discretionary spending in the next three months as the holiday season approaches, a TransUnion study finds. 
 
TransUnion’s Q4 2024 Consumer Pulse Study involved a survey of 1,000 adults 18 years of age and older residing in Hong Kong between 25 September and 5 October 2024. This quarterly study examines shifting consumer attitudes and behaviours based on the dynamics of income, debt, and identity theft. 
 
According to the survey, more than half (52%) of Hong Kong consumers were optimistic about their household finances in the next 12 months – the highest rate in 2024. The majority (44%) of consumers anticipated an income rise, most notably among Millennials (rising from 40% last year to 51%), with 42% of consumers saying that they expected income stability in the next year. 
 
Over one-third (34%) of Hong Kong consumers in Q4 2024 reported an increase in household income over the last three months. Notably, Gen Z led this trend among the four surveyed generations including Gen Z, Millennials, Gen X, and Baby Boomers, with nearly half (49%) of them reporting income gains, the highest of any group despite a decrease from last year (57% in Q4 2023).  
 
Millennials showed significant improvement with 40% disclosing an income increase, marking the highest percentage since Q4 2023. Building on the positive trend of income increases reported last quarter, over half (52%) of the respondents indicated that their income levels remained unchanged in Q4 2024, suggesting a stable income for the majority. 
 
Riding on these positive trends in income and anticipated future earnings, around 52% of consumers expressed optimism about their household financial outlook for the upcoming year, up from 46% in Q4 2023. Additionally, this positivity could also be attributed to consumers’ enhanced capabilities in managing current financial obligations as 80% of consumers expected to be able to pay their current bills and loans in full, an improvement from the 74% who said the same last year. 
 
Despite growing optimism about future earnings and financial outlook, consumers indicated they have strategically adjusted their household budget to safeguard their financial health amid potential economic challenges, such as inflation and job insecurity (57% and 54% cited these as their top three household finances concerns respectively). 
 
While a significant 41% remained cautious about making large purchases, one-third (33%) of consumers anticipated increasing their discretionary spending on dining, travel and entertainment in the next three months as the festive holiday season approaches. This reflects the ongoing consumption confidence among Hong Kong consumers towards the traditional year-end retail peak. 
 
The study also highlighted encouraging trends in consumer awareness of the importance of credit access and lending products. Not only did 84% of consumers acknowledge the importance of having access to credit and lending products in achieving their financial goals, but perception also improved, with 54% of consumers feeling they had sufficient credit access, marking a seven-percentage point jump from last year. 
  
Notably, two-thirds (67%) of Gen Z respondents believed they had adequate access and 75% were confident their credit application would be approved if needed. More than half (57%) of Millennials believed they had adequate access, while 71% were confident that their credit would be approved. Among those seeking new credit in Q4 2024, credit cards emerged as the top choice at 41%, followed by personal loans at 26% and buy now pay later payment services at 25%. 
 
“Our latest Consumer Pulse Study for Q4 2024 reveals an encouraging outlook on household financial dynamics in Hong Kong. With positive trends in income and future earnings anticipated, there is an increasing sense of optimism regarding financial stability, especially among younger generations. As 2024 draws to an end, Hong Kong consumers are planning to increase their spending on dining and travel while also actively prioritising other prudent measures to ensure financial resilience. This forward-thinking mindset is a promising sign for the market as we head into the new year," said Weihan Sun, principal of research and consulting for Asia Pacific at TransUnion. 
 
“Actively managing credit health and monitoring credit reports are foundational to accessing credit and lending products. It is clear that improving education about credit monitoring is essential for enhancing financial literacy among consumers in Hong Kong,” said Sun.  
 
“While we encourage consumers to monitor their report regularly, the Credit Data Smart (CDS) initiative, implemented by the Industry Associations, allows each consumer to receive a free credit report from TransUnion once every 12 months. We believe this is a good starting point for consumers to build a regular credit monitoring habit, ultimately empowering them to achieve important life goals by unlocking more opportunities via responsible access to credit.”

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