Taiwan’s consumer spending capability is expected to post a dramatic turnaround this year, with its headline index posting the largest increase in four years, while the nation’s retail sales will likely grow by an even stronger percentage, a MasterCard Worldwide annual report showed yesterday.
Releasing an index of consumer spending capability for the first time, MasterCard said in the report that Taiwan’s reading rose 15.5 points from the previous year to 64.7 this year, compared with a decline of 5.2 points last year because of the global economic downturn.
The index was designed to provide year-to-year insights into consumer spending. A value above 50 indicates a level of consumer spending capability that is above the 10-year historical average, the report said.
Taiwan’s retail sales are expected to grow by between 5 percent and 10 percent this year after they edged upward by 1.6 percent thanks to a “huge improvement in ties between China and Taiwan that led to a surge in visitors to Taiwan from China.”
MasterCard said that a robust turnaround in consumer spending was expected this year across the Asia-Pacific region, with double-digit retail sales growth predicted in China, Hong Kong, India, Indonesia, South Korea, Malaysia and Singapore as a result of improving fundamentals.
A separate survey by MasterCard Worldwide on consumer purchasing priorities showed that 61 percent of consumers in Taiwan are spending on dining and entertainment, followed by consumer electronics at 50 percent and fitness at 40 percent.
In terms of discretionary spending, 63 percent of the Taiwanese respondents expected to increase or maintain the same level of spending for the next six months, while 26 percent of consumers in China are most likely to increase their discretionary spending in the next six months.
The survey, which polled 10,503 consumers from 24 economies from March 15 to April 12, also found that Taiwanese are more likely to engage in online shopping than consumers in other Asia-Pacific markets.
“Only 9 percent of respondents surveyed do not shop online at all, with 51 percent of Taiwanese respondents spending more than 10 percent of their expenditures on items such as holidays, entertainment and luxury goods purchased online,” the survey said.
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