Saturday, 05/11/2022 10:10

Consumer spending in Asia Pacific remains strong, despite rising costs: Mastercard report

The Mastercard Economics Institute’s “Shifting Wallets” report found that global consumer flight bookings throughout this summer stayed 15 per cent above 2019 levels. — photo Mastercard  

HCM CITY — Amidst an ever-changing and unprecedented global economy, the choices consumers make in what, where and when they spend today may help reveal where we are headed next.

The Mastercard Economics Institute’s “Shifting Wallets” report looks at how consumers across the world are holding tight to habits that offer convenience, experience or both.

The report found that Asia Pacific has seen a sharp recovery in outbound travel following the re-opening of borders, despite the growing cost of air travel. This is notable in markets like Singapore and Australia, with strong demand persisting even beyond the initial loosening of restrictions. Equally, spending on experiences is continuing to exceed spending on things, reflected in the spending patterns for experiences including dining out or entertainment.

Asia Pacific consumers are ordering from restaurants – both in-person or online – over making their own meals at home, with spending on restaurants up 16 per cent in August 2022 from January 2022 levels, whilst grocery spending is down 5 per cent. 

The report said that despite personnel shortages and a surge in crude oil prices pushing up the cost of air travel, spending on travel and experiences remained strong for consumers in APAC.

Globally, large businesses dramatically outperform smaller ones in the shift to digital — but small online service providers in APAC are still finding ways to thrive.

Working from home and the shift to digital have blurred the lines: date night is any night, and leisurely shopping trips are no longer limited to Saturday and Sunday. This has significant staffing and supply chain implications for retailers, restaurants, and other businesses.

“Consumers in Asia Pacific are looking to make up for lost time after a challenging few years,” said David Mann, Chief Economist of Mastercard AP & MEA. “The pent-up demand to see new places and experience new things is influencing consumer to spend in a big way. With the ongoing prioritization of getaways, dining, entertainment, and experiences, we are expecting to see even more rebound in the travel and entertainment sectors.”

“In addition, we’re seeing new opportunities for online businesses, as both goods and experiences spending shifts away from the weekends. As digital shopping and remote work continue to influence our daily habits, consumers will adjust and re-adjust their spending preferences to match the changing rhythm of our lives,” added Mann. — VNS

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