Thursday, 25 June 2009

Filipinos optimistic on individual finances in the future

Pinoys opting for value, not luxury, amid crisis
JESSICA ANNE D. HERMOSA
BusinessWorld
http://www.bworldonline.com/BW062509/content.php?id=001

FILIPINOS ARE LESS likely to indulge in luxuries than other Asian shoppers this year even as they are among the most optimistic that personal finances will soon improve, a regional poll showed.

Consumers in the country are more driven by value than status unlike most of their neighbors, according to data from the "Eye on Asia" survey which was made available yesterday to BusinessWorld.

The review, made by marketing communications firm the Grey Group in January, culled responses from 33,000 people in 16 Asia-Pacific economies: Australia, Bangladesh, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand, and Vietnam.

The Philippines consistently ranked in the bottom half of the 16 for most questions on the importance of buying luxury items.

"We found that Philippines typically scored fairly low. They don’t feel they need this... They are not status seekers, but more value seekers... They may not be ready for the luxury boom seen in other Asian countries," Grey Korea Chief Strategy Officer Steve Yi said in a telephone interview.

"More developed countries typically want to be more indulgent. In general, the more urbanized nations tend to believe it is much more important to indulge," Mr. Yi said.

Asked whether it is important to indulge oneself to cope with the stresses of modern life, the 500 Filipino respondents had a score of 2.97 compared to the Asian average of 3.09, putting the country in the bottom sixth. South Korea topped the list and was interestingly trailed by Sri Lanka and Bangladesh.

Asked whether they believed in "treating myself to life’s pleasures as often as I can", Filipinos again ranked in the bottom sixth.

Smaller purchases may be the key, with the Filipino respondents indicating they were amenable to the purchase of "little luxuries", this time with responses near the Asian average (a score of 2.83 versus the 2.85 median).

The survey, which segmented consumers into shopping tribes, went on to classify Filipinos more as "perceived value seekers." Forty-one percent fell into this category which is described as consumers who want added value, emotional connection, and reliability.

This came as Filipinos ranked fourth in the list of Asian consumers concerned about household finances. Vietnam, Sri Lanka and Korea were the top three. Indonesia was at the bottom after China.

The rest of the Filipino respondents fell into four other "tribes." Nearly a quarter are "new brand enjoyers," a fifth are "function firsts" and just roughly a tenth seek status when making a purchase. The smallest segment, 5%, are "individualist believers" that want trendy brands.

But compared to other Asian consumers, Filipinos are more optimistic when it comes to the state of their individual finances in the future. Nearly half or 48% of the Filipino respondents believe their household finances will get better in the next year.

"Filipinos are a little above the average of 40%," Mr. Yi said. The relative optimism, he explained, may be because the financial crisis has hit developed countries harder.

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