Asia's millennials proving to be cautious consumers

In Asia, as in the U.S. and Europe, millennials are emerging as the new darlings of marketers, manufacturers and retailers who see them carrying the economy in the coming decades.
But as Asian economies enter into a maturity phase, the region's young adults born between 1980 and 2000 seem to be more cautious about spending and investing than their predecessors.
A survey of individual investors published in late February by Manulife Asset Management, a Canadian asset manager, shows millennials do not spend much on things other than daily necessities, clothes and affordable entertainment. They keep 40% of their assets as cash or savings.
The survey covered 4,000 middle- to high-income earners in eight Asian countries and areas -- China, Hong Kong, Taiwan, Japan, Singapore, Malaysia, the Philippines and Indonesia.
Millennials, aged 25-34, accounted for a third of the surveyed.
In the survey, the respondents aged 35 or older said they spent an average 59% of their income, compared with 56% for millennials.
The ratios were less than 50% for millennials in Taiwan (44%), China (49%) and Singapore (49%).
In general, those aged 25 to 34 tend to see an increase in their income, but young adults are not especially ardent shoppers.
Instead, millennials are proving to be diligent savers, with 60% squirreling away for specific savings targets, higher than the 44% for individuals aged 35 or older.
The figures are over 70% for millennials in Malaysia and the Philippines.
The data shows that the millennial generation understands well the importance of financial planning, said Bruno Lee of Manulife.
Millennials are also relatively conservative investors, according to another survey by Legg Mason, a U.S. investment management company.
The findings of the survey, which covers 5,370 well-to-do investors in 19 countries and areas, were announced in April.
In the survey, 79% of the respondents aged 18-39, who belong to the millennial generation, were expecting another financial crisis in the near future, and 89% of this age group said they preferred relatively safe financial products.
The findings about investors in Hong Kong include some intriguing facts. Unsurprisingly, residents in the major international financial center generally showed a strong interest in overseas investments. But millennials and older generations exhibit divergent investment preferences.
While 63% of investors in Hong Kong aged 40 or older said they regarded mainland China as the most promising investment destination, the investment darling for millennials was the U.S., cited by 45% of the younger investors.
Since they are conservatives, millennials prefer the U.S. over China, where markets tend to fluctuate wildly, said Freeman Tsang of Legg Mason.
Chinese consumers have become famous worldwide for their spending sprees overseas. But observers are spotting signs of changing consumer behavior in the country. Health clubs are cropping up in cities across China, while Shanghai Disneyland, set to open in mid-June, is seeking to capitalize on domestic consumers' growing spending on entertainment, such as visits to theme parks.
Chinese people's main interest is shifting from material affluence to spiritual richness, as it did in Japan in the 1980s, noted Kengo Yoshida of Mizuho Securities Asia.
Clearly, Asian millennials are leading some important changes in consumption and investment trends in the region.

 

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