Over 70% of respondents from UOB’s flagship Asean consumer sentiment study (ACSS) said that they expect their respective countries to experience an economic downturn in the next 12 months amid the current inflationary environment.
The ACSS, which is in its fourth year, was conducted from June 1 to 26 among 3,400 individuals online. The individuals came from Singapore, Indonesia, Malaysia, Thailand and Vietnam. The study also marks the first time UOB has partnered with global management consulting firm Boston Consulting Group.
The study also found that rising inflation is a key concern in Asean with 63% of the respondents expressing worry about it. About 57% of the respondents also indicated that they are worried about the rising cost of expenses for their household. Singaporeans, in particular, are more worried compared to their peers, with 71% and 64% worrying about rising inflation and higher household expenses respectively.
About 49% of respondents in Asean are also worried about their long-term financial commitments while 52% of them are concerned that they may see a decline in their savings and, or wealth holdings. Again, Singaporeans within the survey were more worried, with 59% and 59% concerned about both scenarios respectively.
Beyond inflation, the top three concerns in Asean are the ability to set aside enough money for savings (37%), the ability to afford essential items (31%) and the ability for respondents to maintain their current lifestyles (28%). About 42% of the Singaporeans surveyed were most worried about their ability to set aside money for their savings while 37% worried about their ability to plan ahead for retirement. About 31% of Singaporeans also worried about their ability to afford essential items while another 31% worried about their ability to maintain their current lifestyles.
In Singapore, 43% of consumers surveyed also indicated that they had spent more on utility bills in the past year. Some 34% of the respondents in Singapore reported an increase in household groceries expenses while 32% said that they were shelling out more for their daily commutes.
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However, over 25% of Singaporeans said that they’re budgeting more for their expenses, which is 6% more than last year’s percentage. Consequently, consumers are setting aside less for savings, with 23% declaring as such.
Within the period of the study, consumers spent the most on their utility bills and household groceries at 42% and 34% respectively. Food delivery/takeaway and child education came in a joint third at 31%.
At the same time, most of the respondents indicated that they have reduced their spending on discretionary spending with jewellery (38%), dining (34%) and homeware and furniture (32%).
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Interestingly enough, the younger respondents are the most conservative demographic with 48% of Gen-Zs (people aged between 18 to 24 years old) planning to save more this year, compared with the national average of 35%. At the same time, Gen-Ys (aged 25 to 40 years old) indicated that they are prioritising their investments with 30% of them choosing to put their money to work compared to the national average of 24%.
Most in Asean expect to be ‘financially better off’ in 2024
However, optimism still remains as three in five – or 60% - within Asean expect themselves to be financially better off by June 2024. Vietnam, at 76%, was the most optimistic country. This was followed by Indonesia and Thailand at a respective 74% and 68%.
Asean consumers are also open to the latest technologies with e-wallets and QR code-based payments being the highest-used regional payment mode in the last year. About 56% of respondents have indicated that they have used such payment methods in 2022.
E-commerce payment platforms came in second at 49% while mobile wallet credit or debit cards stood third at 48%. Mobile wallet credit or debit cards has been identified as the payment mode that most consumers (22%) are most interested in trying out in the next year.
In Singapore, consumers have indicated that they still prefer to pay via bank platforms instead of third-party ones. Physical credit and debit cards have also been identified as the top preferred payment mode at 62%. Mobile wallet credit and debit cards and peer-to-peer payment services ranked joint-second at 50%. Like their regional counterparts, Singaporeans are most keen in trying out mobile wallet credit or debit card payment in the coming year, with 20% indicating that they would do so.
Finally, over 70% of the respondents surveyed are comfortable with sharing their financial data to be consolidated by banks in one platform. Of the lot, 83% say they prefer to do so via banking apps compared to other app service providers. Of these respondents, more than 90% expressed a preference for receiving personalised product and service offerings in their banking apps. The strong demand for personalisation is also consistent across all age groups, income levels and genders surveyed.
“While UOB’s ACSS 2023 shows that Asean consumers have a cautionary view on outlook as inflation in Singapore and other developed markets remain high, we are happy to see that the enthusiasm on the push for digitalisation and receptiveness to the new tech era is not losing steam,” says Jacquelyn Tan, head of group personal financial services at UOB.
