Purchase of high-end products among elite consumers in Asia has shown an increasing trend, according to Synovate Pax - a survey conducted by global market research company Synovate. Synovate Pax has announced its full year results that tracks media, prosperity and influence across Asia Pacific.
The survey claims to have covered 11 countries in Asia including Hong Kong, Singapore, Korea, Japan, Taiwan, Malaysia, Philippines, Thailand, Indonesia, India and Australia. More than 220,000 interviews were conducted across the region to back it. In India, the survey results are based on information collected from three cities - Bangalore, Mumbai and Delhi.
Observations
The survey conducted up to mid 2003, threw up some interesting findings. Listed below are a few:
* Ownership of high-end personal items: Affluent Asians rapidly acquire new products and services so the emphasis for marketers is on stimulating upgrades and replacements across well-off consumers - rather than first purchases.
Computers, luxury clothes and watches fall into this category. Typically, the items showing the greatest growth in personal ownership have technology and fashion features - this covers items such as mobile phones, notebooks and desktop computers.
Ownership of a mobile phone with an Internet function has grown from 22.5 per cent in 2001, to 28.9 per cent in 2002 and 30.7 per cent by mid 2003. But mobiles without Internet access are still owned by 55 per cent of these affluent Asians in mid 2003.
The popularity of notebooks and desktop computers has continued to grow in Hong Kong, standing at 35 per cent and 76.4 per cent respectively in the latest Pax results. 32.2 per cent of the PAX respondents in Hong Kong now own a mobile with Internet access. Singaporeans seem to have sufficient desktop computers for personal use - they peaked at 70.6 per cent in 2002. But notebooks remain on the growth march with 22.4 per cent owning them in 2001 results, 25.6 per cent in 2002 and 26.1 per cent in 2003.
By contrast, ownership of a mobile with Internet access is 58.5 per cent in Seoul and 67.2 per cent in Tokyo amongst Pax audiences. In Kuala Lumpur, desktop ownership has remained flat since 2001, at about 65 per cent. But notebooks ownership has increased from 21.4 per cent in 2001 to 26.1 per cent by mid 2003.
* Ownership of high-end household items: High-end household products cover items like digital still cameras, digital video cameras, DVDs, VCDs and televisions. A hefty 37 per cent of affluent Asians suggest that they intend to purchase one or more item from this category in the next twelve months.
Digital photography is on the steady rise across Asia Pacific - be it digital video or digital still. Ownership of a digital video camera has grown from 22.1 per cent in 2001, to 23.8 per cent in 2002 and 25.0 per cent in mid 2003. Region-wise, Hong Kong has a very high levels of owning digital video and still cameras - both categories of which have shown healthy growth over the last three years to the latest figures of 37.6 per cent and 56 per cent respectively. In Singapore, digital cameras are showing growing adoption, and now stand at 27.4 per cent ownership for video and 33.8 per cent for still digital cameras. Kuala Lumpur shows the same jumps in the popularity of digital cameras.
Car ownership in Kuala Lumpur (and intention to purchase a new car in the next year) remains at one of the highest in the region. Some 92.3 per cent own at least one car and 24 per cent intend to purchase one in the next twelve months.
* Business class travellers: The report states that overall, the number of Asians taking business trips had declined after 11 September 2001 terrorist attacks in the US. However, the decline was marked in the ranks of infrequent business travellers only. As for frequent business travellers, they stayed on the move. Even the Sars (Severe Acute Respiratory Syndrome) epidemic didn't stop them.
As per the survey figures, 18.2 per cent of the Pax population took one or more flights for business reasons in 2001, 16.5 per cent did to the end of 2002 and 15.3 per cent to mid 2003. This last result probably stemmed from the effect of Sars and possibly from concerns over terrorism.
Regionwise, in Hong Kong, those flying business class declined from 4.2 per cent in 2001 to 3.2 per cent by mid 2003. The Malaysian figures for three or more business trips declined as a result of 9/11, but Kuala Lumpur business people were back on the road in increased numbers even during the SARS outbreak. The figures are 11.9 per cent in 2001, 7.4 per cent in 2002 and 7.9 per cent for this year.
Business travel in Singapore showed an all time high (23 per cent) in 2002. But the recovery in hotels was short-lived and the travel industry saw a slump after Sars, reducing the number back to 21.1 per cent in 2003.
* Leisure travel: The Synovate PAX 2003 results show that 9/11 had a much greater impact on leisure travel across the region than Sars did. However, the travel industry responded quickly to Sars with the release of some exceptional deals.
Specifically, Synovate Pax respondents who usually take more than three trips for leisure was affected by 9/11 but Sars showed no discernible impact. Over all, 5.3 per cent of the Pax population took three or more trips for leisure in 2001, 4.9 per cent did to the end of 2002 and 5 per cent to mid 2003.
Regionwise, leisure trips from Hong Kong continue to be as popular as ever at 58.3 per cent up to mid 2003. By contrast, leisure trips from Singapore were affected post 9/11 and Sars. Figures were 52 per cent travel in 2001, 48.3 per cent till the end of 2002 and 47 per cent till mid 2003. In Kuala Lumpur, the number of people taking three or more leisure trips hit an all-time high at the end of 2002, but was back down by mid 2003, at 7.7 per cent and 5.6 per cent respectively.
* Personal financial products across the Pax universe: Ownership of personal financial products has high levels across the Pax audience - 83.7 per cent own at least one of these products.
Between 2001 and mid 2003, the instruments which lost some investor interest included stocks, foreign currencies and unit trusts. And - presumably due to the volatility of the market and world events during this time - none of these products have gained in ownership.
However, life insurance is shown to be the least susceptible to changes as the level of 68.6 per cent has held steady for the last three years.
Specifically, Hong Kong has higher than average of foreign currency account ownership with 30.2 per cent of the Hong Kong-based Pax respondents owning these vehicles. The regional average is 10.3 per cent. The high prevalence of these accounts in Hong Kong may simply reflect the openness of the banking system and the ease of securing these accounts. In Singaporean, property continues to gain in popularity as a hedge against economic uncertainty - moving up 2.5 per cent from 2001 levels to a current level of 21.6 per cent for Pax respondents living in a property that they own themselves. 11 per cent of affluent Singaporeans have an investment property. In Kuala Lumpur, a massive 56.3 per cent of affluent residents live in a property that they own themselves, and 30 per cent have other properties for investment purposes.
TV viewing trends
The survey put light on another interesting trend in the region. Cable and satellite viewing throughout Asia, especially India, has seen a drastic rise.
India, in the second quarter of 2003, has 1,108,728 Pax respondents hooked on to cable and satellite, thereby being the highest TV viewing country in Asia. In 2002, the figure was 1,097,392.
In comparison, Singapore, which is the second highest cable viewing nation reports only 433,001 viewers in the second quarter on '03. Kuala Lampur, the third in line has 249,078 cable viewing Pax respondents. Jakarta has the least cable viewing population of merely 88,624 respondents in the second quarter on '03.
The most popular channel among affluent adults according to the survey is Discovery Channel which has grabbed 2,156,571 viewers just between September 2002 and August 2003. (See table below) Surprisingly, the next highly-watched channel is National Geographic with 1,740,452 viewers. While movie channel HBO has 1,690,575 viewers, Star Movies has 1,134,702 and AXN only 705,483 viewers according to the survey. Music channel MTV has 1,186,894 viewers.
Channel viewership among Pax audience
(Markets include Bangkok, Hong Kong, Jakarta, Kuala Lumpur, Manila, Singapore, Taipei, Seoul and India)
Q3 2002 Q3+Q4 2002 Q3 '02-Q1 '03 Q3 '02-Q2 '03
Animal Planet 611,552 582,503 573,527 567,748
AXN 711,476 680,654 681,050 705,483
BBC World 748,853 713,924 683,091 691,422
Cartoon Network 746,963 694,834 657,213 646,679
Channel NewsAsia 392,581 393,168 389,302 401,038
Channel V 556,832 550,284 527,697 526,721
CNBC 490,639 470,897 461,973 459,729
CNN 1,699,891 1,588,993 1,473,297 1,469,309
Discovery Channel 2,107,652 2,124,523 2,161,162 2,156,571
ESPN 1,106,849 1,040,890 1,024,877 1,043,028
HBO 1,746,391 1,720,007 1,700,123 1,690,575
MTV 1,252,873 1,207,238 1,174,920 1,186,894
National Geographic Channel 1,736,738 1,740,028 1,749,654 1,740,452
NHK 374,407 332,914 296,305 289,556
Phoenix Chinese 472,562 460,955 454,031 440,317
STAR Movies 1,286,517 1,242,316 1,157,705 1,134,702
STAR Sports 966,797 914,147 885,452 879,686
STAR World 576,512 500,019 492,146 515,710
* CNBC includes CNBC Asia, CNBC India, MBN-CNBC, CNBC Singapore and CNBC Hong Kong.
Who's the audience
Synovate Hong Kong's media director Steve Garton said the survey covered the movers and shakers of Asia - the top 20 per cent of society.
A company release quoted Garton as saying, "As Asia's only current upscale media tracking survey, Synovate Pax is a critical information source to media organisations and planners." However, he stated that Synovate Pax delves even further into the consumer psyche of the affluent Asian. "We talk to the innovators and the early adopters of products," he said.
The Synovate Pax audience includes those sections of society with the highest disposable income to spend on discretionary items. Garton said that these consumers are vital to marketers of quality products and services because they will be the first to buy new items.
"Any new product or service must sell immediately for it to be viable, as product life cycles are becoming increasingly compressed. There is only a small window of opportunity in which to become commercially successful - before competitors emulate new features," Garton maintained.
Garton said "Synovate Pax helps marketers answer a fundamental question - what are Asia's most influential consumers going to do next? Without media and product consumption data, the answer remains elusive."
After moving to continuous tracking a year ago, the survey now offers a full annual database, updated quarterly, showing trends over time. All major upscale regional broadcasters, media specialists and key regional publications use Synovate Pax.
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