Global market research company Synovate yesterday released the 2011 results of the Synovate PAX study, Asia-Pacific’s most comprehensive media survey on elites, business executives and top management covering 11 markets across the region.
This year’s findings highlighted the importance of Hong Kong’s elites for many product categories: the affluent group in Hong Kong topped 10 other markets in owning different types of financial products and new technologies such as HDTVs. They are also the group showing one of the highest increases in owning high ticket items such as cars over the past year.
Steve Garton, global head of media and managing director, Media – Greater China at Synovate, said: "2011 marks the 15th anniversary of Synovate PAX. Since its inception, we are proud that it has performed as one of the most trusted sources for up-to-date information on the lifestyles, habits, product ownership, digital and media consumption of close to 15 million affluent consumers across Asia-Pacific. Understanding the elite market is important for marketers and media planners alike, as through the years, our findings have shown that this affluent group of consumers is a pillar in supporting many brands and product categories, who continues to spend despite boom or bust."
The 2011 PAX study surveyed the affluent groups in Hong Kong, Singapore, Korea, Taiwan, Thailand, Malaysia, India, Indonesia, the Philippines, Japan and Australia. The survey is conducted year-round, and Synovate spoke with 1,747 affluent Hong Kong residents to obtain the 2011 results.
Hong Kong’s affluent over the last decade and a half
Over the last fifteen years during which PAX has studied the affluent groups across Asia-Pacific, the elites’ access to the internet has more than doubled (from 30 percent in 1997 to 82 percent in 2011). Their indulgence in the finer things has also grown, for example, consumption of quality wine has tripled from 1997 to 2011 (8 percent in 1997 to 24 percent in 2011). "Consumption across multiple product categories such as laptop, mobile, and champagne have also increased significantly, showing that these elites are drivers of market growth," said Garton.
In Hong Kong, the affluent group’s increasingly sophisticated grasp of financial instruments is exemplified when comparing historical PAX results to this year’s findings.
Commented Clare Lui, director of Synovate Hong Kong: "We witnessed a dramatic increase in the number of Hong Kong elites who own unit trusts and mutual funds – ownership has tripled over the past 15 years (from 6 percent in 1997 to 19 percent in 2011). Those in the stock and securities markets have doubled, from one in four holding stocks in 1997 (26 percent) to now half of the affluent group in Hong Kong (51 percent). This uptake in stock and securities ownership outpaced that of the region’s growth (from 29 percent in 1997 to 33 percent currently). And contrasting to another regional hub, Singapore, ownership of stock stayed the same at 41 percent over the past 15 years."
2011: A year for indulgences with increases in consumption across multiple product categories
"A barometer of the health of the business environment is the number of people going on business trips, to capitalise on business opportunities available," commented Lui. "A quarter (24 percent) of Hong Kong’s elites surveyed took one or more business trips in 2011, compared to 19 percent in 2010. Those choosing to fly first and business class also doubled from last year (1.6 percent in 2010 to 3.3 percent in 2011)."
Findings also show these busy elites try to live a balanced life. Those who have gone on one or more leisure trips have increased 11 percent, from 54 percent in 2010 to 65 percent in 2011.
SLR digital still cameras gained in popularity among affluent consumers in Hong Kong, with a 14 percent jump in ownership (27 percent in 2010 to 41 percent in 2011), the highest increase across Asia-Pacific’s affluent groups.
While regional car ownership has softened from 73 percent in 2010 to 71 percent in 2011, car ownership amongst Hong Kong’s affluent increased by 6 percent (36 percent in 2010 to 42 percent in 2011).
Commented Garton: "Affluent consumers in Hong Kong are spending on high ticket items. Historically, the figures on car ownership have been quite low. Over recent years, we are seeing increasing car ownership. With 9 percent of elites saying they intend to purchase a car in the next 12 months, we expect spending in this category will continue to grow."
And along the theme of celebration for the 15th Anniversary of PAX, champagne consumption by the elites of Hong Kong rose above the regional average of 8 percent, from 4 percent in 2010 to 9 percent in 2011, the largest increase in Asia-Pacific.
Hong Kong’s affluent consumers also showed their love for luxury watches, being the top group around the region owning watches above USD1,000+. One in three (35 percent) elites in Hong Kong owns a luxury watch, compared to 16 percent regionally. The desire for a luxury watch will continue, with 11 percent indicating an intention to purchase one in the future.
Commented Lui: "Indulgences of the elites clearly translate into purchases. For example, Hong Kong has the highest average monthly spending on cosmetics, fragrances and cologne, at USD143 compared to the regional average of USD91. There is also a 10 percent jump in Hong Kong’s elites stating they will buy a new product or service if it makes their lives more enjoyable (from 38 percent in 2010 to 49 percent in 2011). The PAX 2011 results show the power of the rich prevails."
Greater China shows abundance of financial products ownership
Elites living in the two Greater China markets of Hong Kong and Taiwan top others in the region in owning diverse financial products.
Forty percent of Hong Kong’s affluent hold a privilege or priority banking account, compared to 21 percent regionally, the top among 10 markets across Asia-Pacific.
Fifty-seven percent and over half (51 percent) of the elites in Taiwan and Hong Kong respectively hold stocks, securities and bonds, above the regional average of 33 percent.
Foreign currencies as investments are popular vehicles for the affluent in these Greater China markets as well, with close to one in three (30 percent and 28 percent) Taiwanese and Hong Kong elites indicating ownership, compared to the regional average of 11 percent.
Affluent consumers in Taiwan are the top group holding offshore accounts for investment purposes (17 percent), followed by Hong Kong (12%), whilst regionally only 7 percent indicated ownership.
Commented Garton: "The higher levels of financial sophistication displayed by elites in Greater China compared to their APAC counterparts indicate a strong desire to grow their assets, and to a large degree this is a hallmark of Chinese culture."
Hong Kong’s elites showed a return of confidence in the financial market, with an increase of 6 percent compared to 2010 in owning one and more financial products (from 77 percent in 2010 to 83 percent in 2011). This also holds true for Hong Kong’s property market, as findings show more elites acquired a private property in 2011 compared to last year, up from 44 percent in 2010 to 48 percent in 2011.
Embracing new technology
"Hong Kong’s affluent consumers are early adopters of many high tech devices, being one of the highest groups in owning products such as smartphones and HDTVs in the region," said Lui.
Smartphone ownership among Hong Kong’s affluent jumped by 26 percent from last year (22 percent in 2010 to 48 percent in 2011), compared to 17 percent regionally (16 percent to 33 percent).
Hong Kong is also the HDTV capital, with the highest ownership of HDTV in 65 percent of affluent households, even higher than in Seoul (62 percent).
Commented Garton: "Elites in Hong Kong show a strong appetite for new technology to access content, for communication and interaction. They are embracing media that is delivered through these platforms. From all we see of the habits of affluent consumers, they are a highly attractive and lucrative market. This is well understood by international media which has been fast to offer HDTV services, tailored content to tablets and smartphones to meet the needs of elites."