Synovate PAX study celebrates 15th anniversary

Revealing the latest trends on lifestyle, spending, digital & media consumption of elite consumers across Asia Pacific. 2011 findings show strength of spending by Hong Kong’s elites in multiple product categories.

HONG KONG  – Global market research company Synovate today released the 2011 results of the Synovate PAX study, Asia Pacific’s most comprehensive media survey on elites, business executives and top management covering 11 markets across the region. This year’s findings highlighted the importance of Hong Kong’s elites for many product categories: the affluent group in Hong Kong topped 10 other markets in owning different types of financial products and new technologies such as HDTVs. They are also the group showing one of the highest increases in owning high ticket items such as cars over the past year.

Steve Garton, Global Head of Media and Managing Director, Media – Greater China at Synovate, said:

“2011 marks the 15th anniversary of Synovate PAX. Since its inception, we are proud that it has performed as one of the most trusted sources for up-to-date information on the lifestyles, habits, product ownership, digital and media consumption of close to 15 million affluent consumers across Asia Pacific. Understanding the elite market is important for marketers and media planners alike, as through the years, our findings have shown that this affluent group of consumers is a pillar in supporting many brands and product categories, who continues to spend despite boom or bust.”

The 2011 PAX study surveyed the affluent groups in Hong Kong, Singapore, Korea, Taiwan, Thailand, Malaysia, India, Indonesia, the Philippines, Japan and Australia. The survey is conducted year-round, and Synovate spoke with 1,747 affluent Hong Kong residents to obtain the 2011 results.

Hong Kong’s affluent over the last decade and a half

Over the last fifteen years during which PAX has studied the affluent groups across Asia Pacific, the elites’ access to the internet has more than doubled (from 30% in 1997 to 82% in 2011). Their indulgence in the finer things has also grown, for example, consumption of quality wine has tripled from 1997 to 2011 (8% in 1997 to 24% in 2011). “Consumption across multiple product categories such as laptop, mobile, and champagne have also increased significantly, showing that these elites are drivers of market growth,” said Garton.

In Hong Kong, the affluent group’s increasingly sophisticated grasp of financial instruments is exemplified when comparing historical PAX results to today’s findings.

Commented Clare Lui, Director of Synovate Hong Kong: “We witnessed a dramatic increase in the number of Hong Kong elites who own unit trusts and mutual funds – ownership has tripled over the past 15 years (from 6% in 1997 to 19% in 2011). Those in the stock and securities markets have doubled, from one in four holding stocks in 1997 (26%) to now half of the affluent group in Hong Kong (51%). This uptake in stock and securities ownership outpaced that of the region\’s growth (from 29% in 1997 to 33% currently). And contrasting to another regional hub, Singapore, ownership of stock stayed the same at 41% over the past 15 years.”

2011: A year for indulgences with increases in consumption across multiple product categories

“A barometer of the health of the business environment is the number of people going on business trips, to capitalise on business opportunities available,” commented Lui. “A quarter (24%) of Hong Kong’s elites surveyed took one or more business trips in 2011, compared to 19% in 2010. Those choosing to fly first and business class also doubled from last year (1.6% in 2010 to 3.3% in 2011).”

Findings also show these busy elites try to live a balanced life. Those who have gone on one or more leisure trips have increased 11%, from 54% in 2010 to 65% in 2011.

SLR digital still cameras gained in popularity among affluent consumers in Hong Kong, with a 14% jump in ownership (27% in 2010 to 41% in 2011), the highest increase across Asia Pacific’s affluent groups.

While regional car ownership has softened from 73% in 2010 to 71% in 2011, car ownership amongst Hong Kong’s affluent increased by 6% (36% in 2010 to 42% in 2011).

Commented Garton: “Affluent consumers in Hong Kong are spending on high ticket items. Historically, the figures on car ownership have been quite low. Over recent years, we are seeing increasing car ownership. With 9% of elites saying they intend to purchase a car in the next 12 months, we expect spending in this category will continue to grow.”

And along the theme of celebration for the 15th Anniversary of PAX, champagne consumption by the elites of Hong Kong rose above the regional average of 8%, from 4% in 2010 to 9% in 2011, the largest increase in Asia Pacific.

Hong Kong’s affluent consumers also showed their love for luxury watches, being the top group around the region owning watches above US$1000+. One in three (35%) elites in Hong Kong owns a luxury watch, compared to 16% regionally. The desire for a luxury watch will continue, with 11% indicating an intention to purchase one in the future.

Commented Lui: “Indulgences of the elites clearly translate into purchases. For example, Hong Kong has the highest average monthly spending on cosmetics, fragrances and cologne, at US$143 compared to the regional average of US$91. There is also a 10% jump in Hong Kong’s elites stating they will buy a new product or service if it makes their lives more enjoyable (from 38% in 2010 to 49% in 2011). The PAX 2011 results show the power of the rich prevails.”

Greater China shows abundance of financial products ownership

Elites living in the two Greater China markets of Hong Kong and Taiwan top others in the region in owning diverse financial products.

Forty percent of Hong Kong’s affluent hold a privilege or priority banking account, compared to 21% regionally, the top among 10 markets across Asia Pacific.

Fifty-seven percent and over half (51%) of the elites in Taiwan and Hong Kong respectively hold stocks, securities and bonds, above the regional average of 33%.

Foreign currencies as investments are popular vehicles for the affluent in these Greater China markets as well, with close to one in three (30% and 28%) Taiwanese and Hong Kong elites indicating ownership, compared to the regional average of 11%.

Affluent consumers in Taiwan are the top group holding offshore accounts for investment purposes (17%), followed by Hong Kong (12%), whilst regionally only 7% indicated ownership.

Commented Garton: \”The higher levels of financial sophistication displayed by elites in Greater China compared to their APAC counterparts indicate a strong desire to grow their assets, and to a large degree this is a hallmark of Chinese culture.\”

Hong Kong’s elites showed a return of confidence in the financial market, with an increase of 6% compared to 2010 in owning one and more financial products (from 77% in 2010 to 83% in 2011). This also holds true for Hong Kong’s property market, as findings show more elites acquired a private property in 2011 compared to last year, up from 44% in 2010 to 48% in 2011.

Embracing new technology

“Hong Kong’s affluent consumers are early adopters of many high tech devices, being one of the highest groups in owning products such as smartphones and HDTVs in the region,” said Lui.

Smartphone ownership among Hong Kong’s affluent jumped by 26% from last year (22% in 2010 to 48% in 2011), compared to 17% regionally (16% to 33%).

Hong Kong is also the HDTV capital, with the highest ownership of HDTV in 65% of affluent households, even higher than in Seoul (62%).

Commented Garton: “Elites in Hong Kong show a strong appetite for new technology to access content, for communication and interaction. They are embracing media that is delivered through these platforms. From all we see of the habits of affluent consumers, they are a highly attractive and lucrative market. This is well understood by international media which has been fast to offer HDTV services, tailored content to tablets and smartphones to meet the needs of elites.”