The Hindu Business Line : `Spending power of affluent Asians to grow'

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Singapore Jan. 19 By 2015, businesses targeting the affluent in Asia will have a whopping opportunity of $600 billion, as the spending power of consumers in both `Affluent Asia' and `Emerging Asia' is set to explode.

This is the finding of the Asia-Pacific Economic Advisor to MasterCard Worldwide Dr Yuwa Hedrick-Wong in his book Succeeding like Success. The book was released in Singapore on Friday at a conference organised by MasterCard Worldwide.

Consumption patterns

Dr Yuwa said the size and spending power of the affluent consumers in these markets are expected to expand quickly over the next decade, reaching more than 11 million wealthy households in affluent Asia and more than 58 million in emerging Asia. The book contains interesting nuggets on how people in "Affluent Asia' (Australia, Hong Kong, Japan, Korea, Singapore and Taiwan) and `Emerging Asia' (China, India, Malaysia, the Philippines and Thailand) have made it to the `wealthy' list, and the consumption patterns that consumers in these different markets will adopt.

How the rich spend

Interestingly, his research data, and interaction with Forbes CEOs at various platforms, has shown that while the rich Indians will blow up a lot of their money on shopping, wealthy Australians and Taiwanese consumers will spend the most on overseas travel and leisure.

"In China and Singapore, the largest expenditure will be on automobiles, PCs and mobile phones. The biggest discretionary expenditure item for the wealthy in more than half of the markets across Asia — Japan, Korea, Hong Kong, Malaysia, Indonesia, Thailand and the Philippines — will be dining and entertainment," Dr Yuwa told a round table discussion on the findings of his study.

He added that the wealthy in Japan ($229.7 billion), China ($166.2 billion) and Korea ($90.8 billion) are estimated to have the largest discretionary spending power by 2015, with these three markets alone contributing to over 80 per cent of the total discretionary spend in Asia.

Consumption behaviour

While acknowledging that the consumption behaviour of these wealthy consumers are influenced by factors such as age, gender, lifecycle stages and personal characteristics, the book provides useful insight into these consumers by examining their pathway to affluence.

These are divided into three categories — inheritance, the pioneering pathway, where people create massive wealth from literally nothing through entrepreneurial energy and successfully seizing and exploiting opportunities — Dhirubhai Ambani's case is detailed in the book — and the professional pathway, where one acquires wealth through professional skills.

"Due to the incredibly diverse and complicated socio-economic histories of Asia, an understanding of the pathway to success of Asia's affluent is an effective perspective for businesses to leverage," said Dr Yuwa.

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`Spending power of affluent Asians to grow'