Laden with colorful bags full of gifts, Andy Xu makes his way through Hong Kong’s jam-packed Causeway Bay shopping district apparently unfazed by the past year’s global economic crisis.
The 30-year-old marketing manager from mainland China plans to splash out between US$4,000 and US$5,000 on presents for friends and family for Christmas and the Lunar New Year celebrations.
“My income and spending habits haven’t really been affected by the economy,” he said.
Xu is not hunting for bargain-basement priced items either. His sights are firmly set on luxury goods, making him a dream come true for high-end retailers, such as men’s fashion chain Brooks Brothers.
“Business is good,” said an employee at one of the retailer’s stores in Hong Kong. “We are getting more mainland customers this year.”
One year after a financial crisis wrought devastation on the world’s economy and pounded retail sales, shoppers in Asia are cautiously loosening their purse strings.
From India and Taiwan to Indonesia and South Korea, improving consumer sentiment is driving a general uptrend in spending amid stronger economic data. Low retailer inventories mean shops likely won’t be slashing prices in a desperate bid to lure customers, said Aaron Fischer, head of consumer and gaming research at brokerage CLSA in Hong Kong.
“Retail sales have been quite strong pretty well across the region, except for Japan,” Fischer said. “The main reason is consumer confidence is pretty high.”
Industrial activity in Chinese factories has picked up after millions of workers were laid off last year, with toy makers in particular rushing to fill Christmas orders from the US.
“Christmas orders this year should be better than last year, as the sentiment last year was very bad,” said Ren Xianfang, a Beijing-based analyst with IHS Global Insight, pointing to a recovery in industrial production since September.
That feeling was echoed by Russell Zimmerman, executive director of the Australian Retailers Association, which is expecting retail sales this year to hit almost A$39 billion (US$35 billion).
The figure is 4.7 percent higher than last year, despite three interest-rate increases, Zimmerman said.
“We think it is going to be a good Christmas, but we would probably have had a great Christmas if we hadn’t had those three interest-rate rises,” he said.
In Singapore, the glitzy Ion Orchard Mall has drawn 22 million shoppers since opening its doors in July, a spokeswoman said.
“The past year has been a difficult one for many Singaporeans, but we’re already seeing signs of recovery, with reports of improvements in the labor market this quarter,” she said.
Still, Thailand’s retail sales have drooped this year and the story isn’t much better in Japan, where price-chopping retailers are fighting to woo unenthusiastic shoppers through the door. As the country crawls out of its worst post-war recession, Japanese consumers are keeping a tight grip on their wallets, although some say they won’t let the financial gloom dampen the holiday spirit.
Housewife Akemi Oura, 63, said she would have to watch her gift budget, but still plans to treat herself.
“Probably I will spend just as much as I did last year [on myself], but for presents, I will probably keep my budget under about ¥10,000 [US$112],” she said as she strolled through the upmarket Ginza shopping district.