Spending is no longer all about big brands and flashy items for the well-off, but family time and charity now drive how they spend.
The Visa Affluent Study 2013, conducted across Asia Pacific and the Middle East, looked at affluent consumers’ spending habits and priorities, their 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 saying they plan to spend more on discretionary items over the coming year. Japan, where people are more pessimistic about economic growth, ranked lowest in terms of future discretionary spending.
However, in markets such as Hong Kong, South Korea and Singapore, the affluent plan to spend modestly and lack confidence in the economy.
Family holidays, donations to charity and evenings out have emerged as the top drivers of future discretionary spend across the region. Family holidays emerged in first place in all markets except Indonesia and the 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 jewellery 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 personalised services rated highly with the affluent in India (83 per cent) and China (80 per cent).
“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,” says Visa’s head of consumer products for Asia Pacific, Central Europe, Middle East and Africa James Lim.
“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 towards helping others, which is reflected by the average affluent respondent making five charitable donations last year.”
The meaning of affluence was also generally agreed upon across the regions with one exception: China. The top earners in China believe that affluence creates influence (81 per cent).
In other countries, affluence is perceived as insurance, providing certainty in an uncertain world (73 per cent) and as a means to give back to society (71 per cent).
Respondents also believe that affluence brings both greater responsibility and allows them to build a legacy (both 70 per cent), with responsibility weighing in at 92 per cent in Indonesia. Only 66 per cent overall agreed that affluence brings with it the expectation that one will build more wealth.
