Dining and Entertainment Remains Top Spending Priority for Region’s Consumers: MasterCard Survey

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Mumbai, July 01, 2009: The mantra Eat, Drink and Be Merry is holding strong among consumers in Asia/Pacific, Middle East and Africa. According to the MasterCard Survey on Consumer Purchasing Priorities released today, the region’s consumers are expecting Dining and Entertainment to be their top spending priority for the next six months. It took top spot in the previous survey released in December 2008. The category topped the list for discretionary spend in 18 of the 21 markets across Asia/Pacific, Middle East and Africa.

Among the ten main categories included in the MasterCard survey, spend on extracurricular activities for one’s children, and on fitness and wellness are expected to be the least prone to cutbacks, revealed the MasterCard Worldwide Index of Consumer Purchasing Resilience, which is based on the survey findings.

The MasterCard Survey on Consumer Purchasing Priorities, released twice yearly, provides valuable insights into consumers’ discretionary spending priorities for the six months ahead. The latest survey was conducted from 23 March to 18 April 2009 and involved 9,211 consumers from 21 markets. Data collection was via personal, telephone and Computer Aided Telephone interviews, with the questionnaire translated to the local language wherever appropriate and necessary.

The MasterCard Worldwide Index of Consumer Purchasing Resilience measures the resilience of the top planned expenditure categories of consumers to spending cutbacks. The Index is derived from the following data - the categories of goods and services that consumers would spend on in the coming six months, how important each of these categories is to consumers and if they would cut back on their discretionary spending over the next six months. The Index and its accompanying reports do not represent MasterCard financial performance.

According to the MasterCard Survey on Consumer Purchasing Priorities, Dining and Entertainment (as indicated by 69% of the region’s respondents), Fashion and Accessories (49%), Fitness and Wellness (36%), Consumer Electronics and Children’s Extra-Curricular Activities/Private Tuition (34% each) are the top spending priorities for the next six months.

Dining and Entertainment is also among the top three categories most resilient to cutbacks in consumer spending. It registered a score of 69 in the MasterCard Worldwide Index of Consumer Purchasing Resilience, behind spend on Children’s Extra-Curricular Activities/Private Tuition (87) and Fitness and Wellness (78). Consumer Electronics (67) and Fashion and Accessories (65) also showed resilience to cutbacks. A score of over 50 indicates that the planned expenditure is unlikely to be cut back; whereas a score below 50 suggests that it is vulnerable to cutback in spending by households.

The survey also found that the majority of consumers are planning to maintain their discretionary spend for the second half of the year at the same levels as six months ago. China (70%), Kuwait (69%), Saudi Arabia (67%) and Japan (63%) have the highest percentage of consumers planning to maintain their discretionary spending, while Qatar (21%), South Africa and India (20% each) have the highest percentage of consumers planning to increase their discretionary spending in the next six months.

Dr Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard Worldwide said, “The global recession does not appear to have a serious impact on the urban middle class in the Asia/Pacific, Middle East and Africa region compared with previous recessions. Private consumption is holding up well in the region; and in many markets consumers are either planning to maintain or increase their discretionary spending in the next six months. Everything else being equal, the latest findings in consumer purchasing priorities are very positive for a stronger outlook of domestic consumption going forward, in spite of persistent uncertainty in the global economy.”