No revenge spending in store for businesses from Hong Kong to Singapore as consumers tighten belt for rainy days, AIA survey shows

Name: Amid pandemic, Chinese consumers spend US$74.1 billion during Singles’ Day online sales festival
Uploaded: 2021-06-24T06:15:06.000Z
Duration: 3 min 2 s
Description: Amid pandemic, Chinese consumers spend US$74.1 billion during Singles’ Day online sales festival

Some 52 per cent of Hongkongers plan to increase their savings this year despite income erosion, mirroring trends in mainland China and Singapore

AIA unveils results of a January survey on 7,400 of its customers in China and major Southeast Asian economies

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A giant electronic board showing the online transaction value during the annual Singles’ Day sales gala. Photo: Reuters

Enoch Yiu

Published: 2:15pm, 24 Jun 2021Updated: 11:06pm, 24 Jun 2021

Consumers in Hong Kong, mainland China and major Southeast Asian economies are seeking to set aside more cash for rainy days even as the pandemic has eroded their income. That may be unpleasant news for retailers and restaurateurs seeking to revive their businesses.

Some 52 per cent of Hongkongers intend to boost their savings this year, according to a survey published by AIA Group. Almost half of them (46 per cent) aim to save 50 per cent more than in 2020. That mirrors the responses in mainland China and Singapore, the insurer added.

AIA surveyed 7,400 respondents in China and Southeast Asia including Singapore, Indonesia, Malaysia, Philippines, Thailand, and Vietnam in January. AIA is the world’s second most valuable insurer after Ping An Insurance (Group), according to Bloomberg data.

03:02

Amid pandemic, Chinese consumers spend US$74.1 billion during Singles’ Day online sales festival

The survey underscores belt-tightening measures amid income and job losses, dimming hopes for businesses seeking an uplift from pent-up demand or “revenge spending.” Recent efforts to reopen economies continue to be plagued by a resurgence in Covid-19 infection cases, the emergence of virus variants and relatively slow progress in vaccination programmes.

“As the spending pattern in mainland China has shown, it seems people have no big interest in revenge spending” at the moment, said Kenny Ng Lai-yin, a strategist at Everbright Sun Hung Kai Securities. “Consumers are still worried about economic uncertainties.”

Besides, the stock market wealth-effect has largely deserted many of the markets where the survey was conducted. While benchmarks in Singapore and Thailand rose more than 9 per cent, those in mainland China and Malaysia have declined.

04:10

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The AIA results resonate with a separate survey published by Citigroup last month, in which more than 70 per cent of respondents would adopt a “pragmatic” view on consumption. This suggests they are unlikely to go on a shopping spree before the pandemic battle is won.