Consumers change their spending habits

Some 1,300 Bangkok residents were part of the BBDO worldwide survey conducted on 15 different markets, with about 15,000 respondents, between January and June this year. In Asia, the study covered Thailand, Japan, Taiwan, Malaysia, Singapore, Indonesia, China and South Korea.

Songkran Sethesompobe, chief executive officer of BBDO Bangkok, said that according to the survey 54 per cent of Thai respondents shared the global tendency to believe they are less able to put money away at this time, mainly because the cost of living is constantly rising.

About 38 per cent of the respondents said they spent more time discussing economic issues with their friends, while 18 per cent said they are suffering badly from salary cuts or losing their jobs. About 39 per cent of the respondents now choose to leave their vehicles at home and use public transport instead.

"Brand loyalty is being severely challenged because about 49 per cent of the respondents admitted that they were spending more time looking for product information to support their decision to purchase. The survey showed that consumers are becoming less loyal to particular brands," Songkran explained.

He added that consumers were also not using their credit cards that frequently because they are not very confident about being able to repay the debt, which comes at a higher interest rate.

Songkran went on to say that about 49 per cent of respondents said that they were more willing to buy house-brands because they delivered higher value for money. The survey also showed that 51 per cent of Thai consumers spent less on buying gifts for their friends. Some 48 per cent admitted that they have cut their expenditure on fashion goods, while 40 per cent of the respondents who are parents said they had reduced the money they spend on toys for their children.

About 56 per cent of the consumers spend less time on social outings and at entertainment venues, while 35 per cent said they spent more time entertaining at home. The respondents also said they have adjusted their methods of communication, and are using the Internet more often, spending more time on online activities, sending more text messages and spending more time on their mobile telephones chatting with friends.

About 42 per cent of the respondents felt that the current economic recession is worse than the one in 1997, because this one is maiming Thailand's strategic industries, such as export and tourism.

The respondents also said they felt the country was getting poorer and that this was having a direct impact on Thai citizens.

"These changes in consumer behaviour have resulted in lower growth for some product categories but higher growth for others," Songkran said.

"Cut-backs on dining out and less visits to entertainment venues means there are fewer seats taken at the cinema but an increase in sales for home-entertainment products such as games and DVDs. The economic and political uncertainties have also forced middle- to low-income groups to hold more than one job or work harder in order to ensure their survival in this economic climate," he added.

However, Songkran said rising prices seem to have become a boon for the environment because consumers are now working to get the most out of the resources they have in hand just so they can save money.

The rising cost of living is also having a positive impact on family relationships and even though the future of the economy is uncertain, more consumers are rewarding themselves by going to the temple frequently or donating to charity.