MALAYSIAN consumers may not be facing the full brunt of the global recession yet but many are already tightening their belts and bracing for tougher times next year.
For health product entrepreneur Latifah A.B. Rahman, 48, this means a cut in dining out and entertainment.
“I’ve always been thrifty but I do enjoy a nice dinner outside or a karaoke session with friends. With all the talk of economic slowdown, I’ll have to cut down on these luxuries.”
Latifah, says she will not have to make huge adjustments as she has always been a careful spender and has simple tastes.
“I buy only the things I need and don’t like to splurge money on clothes or accessories. But I will not cut back on health products and house maintenance,” she says, adding that she will look for bargains.
Catering service operator Christine Chua, 45, says she will try to save more and spend less in the coming 12 months.
“Running your own business means your income is not consistent, so I try to save as much as I can whenever I have extra money. Luckily, I don’t eat out or shop much, and I don’t buy anything unless it is absolutely necessary, so it is not that difficult for me to be more economical,” she says.
Although she is not very pessimistic about the economic situation, Chua still tries to be frugal.
Time to diversify
“My business has been good so far but I am preparing for next year, just in case. In the meantime, I am also diversifying my business to increase income,”
She says she will not scrimp on her children’s education or their health, though.
A recent regional survey showed that consumers want to cut back spending on non-essential items.
According to the MasterCard Worldwide Index of Consumer Purchasing Priorities, 70% of consumers indicated that they will spend less on non-essentials in 2009. Some 73% of Malaysians interviewed are looking to cut back on their discretionary spending.
The regional consumer survey also revealed that 93% of Malaysians want to save more next year, with one in three looking to save more than 20% of their incomes.
“Consumers across the region are tightening their belts for tougher times. In most markets across Asia, more than half of the respondents are looking at slashing their discretionary spending,” says MasterCard Worldwide Asia/Pacific economic advisor Dr Yuwa Hedrick-Wong.
The survey provides companies valuable insight into consumers’ savings and spending behaviour over the next 12 months.
A total of 6,019 consumers in 14 markets were surveyed between Sept 1 and Sept 29, 2008. About 400 Malaysians took part in it.
The participants were males and females aged 18 years and above, from middle and upper income groups.
Other than Malaysia, the Asian markets surveyed included Japan, India, New Zealand, Thailand and Hong Kong.
The survey showed that dining and entertainment (59%) remains the top purchasing priority for Malaysian consumers, followed by personal travel (43%) and fashion and accessories (42%).
Compared to their neighbours in the region, more Malaysians were found to spend their personal annual income on discretionary items.
As the index highlighted, approximately 79% of consumers in Malaysia spend above 10% of their personal annual income on discretionary items, compared to over 60% of consumers across the region.
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