Jennee Grace U Rubrico
Thursday, December 30, 2010
Thursday, December 30, 2010
WHEN people start going back to buying luxurious
little pleasure items, one can safely conclude that the worst is over
for the economy. While the stock market is officially the weathervane
of a mature economy, the movement of discretionary items like branded
bags and electronic gadgets in the retail sector is, arguably, the
better indicator of economic health.At the first sign of an economic
slowdown Jimmy Choo and Tiffany are among the first names to be taken
out of the shopping list, ceding their slots to more wallet-friendly
brands; when purse strings are loosened, austerity fatigue somehow
finds its way into the household and items that feel good but are not
vital for survival are reinstated in the budget.
Given the way people in this part of the world have been spending of late, the region doesn't seem to be worried about the eurozone debt crisis at all.
In its 2011 outlook for the Retail and Consumer Products in Asia, PricewaterhouseCoopers predicts the region will outperform all other markets in terms of retail sales over the next four years.
Figures from the Economist Intelligence Unit quoted by PwC estimate Asia-Pacific's retail sales volume to grow 6.5 per cent in 2010, from 5.6 per cent in 2009. Between 2011 and 2014, growth will be between 6 per cent and 6.6 per cent. In contrast, other markets in the world are expected to grow -0.5 per cent to 5.2 per cent in 2010; 0.2 per cent to 4.5 per cent in 2011; 0.8 per cent to 5.2 per cent in 2012; 1.1 per cent to 5.8 per cent in 2013; and 1 per cent to 6.6 per cent in 2014. Western Europe is expected to consistently lag all the other regions.
"Asian markets proved remarkably resilient through the economic downturn and continued healthy growth over the next five years looks almost certain," says PwC.
It adds that while China and India will continue to drive growth in the region, "across most of Asia, the forecast is for steady growth in the mid-single digits". Shoppers and mall operators in Brunei, Kuala Lumpur, Manila, and other cities in the region which saw shopping centres bursting at the seams during the Christmas season would be hard-put to argue.
Food and fast moving consumer goods always do well regardless of the economic condition, since they are necessary expenses.
But to get a better sense of the economic vitality of the region and the public's propensity to trade up in good times, it is necessary to turn to retail subsectors that are dependent on spare money: luxury goods, durables and electronics.
The segments have been growing in leaps and bounds. Spending on luxury goods is "back in a big way" this year, says PwC. Watch maker Swatch, which also owns the Blancpain and Breguet brands, saw a 22 per cent increase in first half sales, PwC notes.
Sales in Hermes International also saw a 27 per cent jump in the second quarter and a whopping 57 per cent increase sales in Asia, excluding Japan.
"LVMH, the world's biggest luxury goods group, said its profits soared by 53 per cent in the first half of 2010", while Richemont, which owns the Cartier and Montblanc brands "saw its sales in Asia rise 51 per cent year-on-year from March to August", PwC states.
Durables and electronics are also seeing a jump in sales volume in the region - to 5.5 per cent in 2010, from 2.7 per cent in 2009. The segment is also expected to grow 5.8 per cent in 2011, 6 per cent in 2012, 6.4 per cent in 2013, and 6.6 per cent in 2014.
By all indications, Asians are poised to shop their way to economic health. But economics is hardly an exact science, and at the back of policymakers' minds is the question: Will Asia continue to be insulated from the European debt crisis?
Studies claim this is a likely scenario. Realistically, people are still drawing up shopping lists and keeping to budgets, albeit much bigger ones.
As long as the good times roll, however, shoppers will continue to kick off the flea market shoes, don the Havaianas, and hit the high-end stores to make big-ticket purchases.
Because when money comes, shopping is never too far behind.
(The views of the author are her own and do not necessarily reflect those of The Brunei Times).
The Brunei Times
Given the way people in this part of the world have been spending of late, the region doesn't seem to be worried about the eurozone debt crisis at all.
In its 2011 outlook for the Retail and Consumer Products in Asia, PricewaterhouseCoopers predicts the region will outperform all other markets in terms of retail sales over the next four years.
Figures from the Economist Intelligence Unit quoted by PwC estimate Asia-Pacific's retail sales volume to grow 6.5 per cent in 2010, from 5.6 per cent in 2009. Between 2011 and 2014, growth will be between 6 per cent and 6.6 per cent. In contrast, other markets in the world are expected to grow -0.5 per cent to 5.2 per cent in 2010; 0.2 per cent to 4.5 per cent in 2011; 0.8 per cent to 5.2 per cent in 2012; 1.1 per cent to 5.8 per cent in 2013; and 1 per cent to 6.6 per cent in 2014. Western Europe is expected to consistently lag all the other regions.
"Asian markets proved remarkably resilient through the economic downturn and continued healthy growth over the next five years looks almost certain," says PwC.
It adds that while China and India will continue to drive growth in the region, "across most of Asia, the forecast is for steady growth in the mid-single digits". Shoppers and mall operators in Brunei, Kuala Lumpur, Manila, and other cities in the region which saw shopping centres bursting at the seams during the Christmas season would be hard-put to argue.
Food and fast moving consumer goods always do well regardless of the economic condition, since they are necessary expenses.
But to get a better sense of the economic vitality of the region and the public's propensity to trade up in good times, it is necessary to turn to retail subsectors that are dependent on spare money: luxury goods, durables and electronics.
The segments have been growing in leaps and bounds. Spending on luxury goods is "back in a big way" this year, says PwC. Watch maker Swatch, which also owns the Blancpain and Breguet brands, saw a 22 per cent increase in first half sales, PwC notes.
Sales in Hermes International also saw a 27 per cent jump in the second quarter and a whopping 57 per cent increase sales in Asia, excluding Japan.
"LVMH, the world's biggest luxury goods group, said its profits soared by 53 per cent in the first half of 2010", while Richemont, which owns the Cartier and Montblanc brands "saw its sales in Asia rise 51 per cent year-on-year from March to August", PwC states.
Durables and electronics are also seeing a jump in sales volume in the region - to 5.5 per cent in 2010, from 2.7 per cent in 2009. The segment is also expected to grow 5.8 per cent in 2011, 6 per cent in 2012, 6.4 per cent in 2013, and 6.6 per cent in 2014.
By all indications, Asians are poised to shop their way to economic health. But economics is hardly an exact science, and at the back of policymakers' minds is the question: Will Asia continue to be insulated from the European debt crisis?
Studies claim this is a likely scenario. Realistically, people are still drawing up shopping lists and keeping to budgets, albeit much bigger ones.
As long as the good times roll, however, shoppers will continue to kick off the flea market shoes, don the Havaianas, and hit the high-end stores to make big-ticket purchases.
Because when money comes, shopping is never too far behind.
(The views of the author are her own and do not necessarily reflect those of The Brunei Times).
The Brunei Times
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