The consumer spending in Singapore could be heading into a potential slowdown in 2013, according to a consumer confidence index from market research firm Nielsen released on 6 February 2012.
Nielsen's latest quarterly report showed that consumer confidence in Singapore declined to 95 points in Q4 2012, after a short-lived uptick of 98 points in the third quarter.
"The slight pullback in consumer confidence in Singapore is a likely predictor of a cut-back in discretionary spending in 2013," said Joan Koh, Managing Director, Nielsen Singapore and Malaysia.
"For companies, this means that competition intensifies and it is even more important for marketers and retailers today to understand how they can execute an optimal marketing strategy which ensures sustained positive returns in the future," said Koh.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted between November 10 to 27 last year and polled more than 29,000 online consumers in 58 countries throughout Asia Pacific, Europe, Latin America, the Middle East, Africa, and North America.
In Singapore, 500 respondents took part in the survey. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. According to the report, consumer confidence has been hovering below 100 points for six consecutive quarters within a range of 94 and 98 points since the second quarter of 2011.
Nielsen's latest survey also highlighted lower consumer spending intentions across many discretionary areas, from taking holidays and buying clothes to stock investments.
The biggest spending intention declines in Singapore were reported for investments in stock / mutual funds, down eight points to 24 percent and savings, down six points to 58 percent, as well as saving for retirement, down four points to 20 percent.
On a slightly positive note, the spending on new technology products remained constant at 22 per cent, a level same throughout the four quarters of 2012.
"Consumers remain cautious when it comes to spending and managing their expenses and we expect them to adopt various coping strategies such as value-seeking and buying on promotions," observed Koh.
"Companies are likely to step up on promotional activities to increase or defend their market share and while they are generally likely to see a combination of sales uplift, increased profitability and loyalty, the relationship is not a given. To protect their brand, companies need to carefully measure the impact of promotional activities," said Koh.
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