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Sydney, 29 July 2009: The latest MasterCard Survey on Consumer Purchasing Priorities released today shows over two thirds of Australians will spend the same amount or more on discretionary items such as holiday trips, entertainment and dining over the next six months.

Eddie Grobler, executive vice president, Australasia, MasterCard Worldwide, said, "Downturn or not, as a nation we obviously value the benefits of a holiday and being healthy and are enjoying our current lifestyle. This trend will be welcomed by the Australian entertainment, fitness and travel industries.

"The Dining and Entertainment category topped the list for discretionary spend in 18 of the 21¹ markets surveyed across Asia/Pacific, Middle East and Africa, including Australia, with 70 per cent of Australians planning to spend in this category over the coming six months.

"Spending on fashion and accessories was important for 58 per cent of Australians surveyed, proving we're keen to stay looking and feeling good through the downturn and in the next six months," said Mr Grobler.

According to the MasterCard Survey on Consumer Purchasing Priorities, the top spending priorities for the next six months are Dining and Entertainment (70%, up from 60% six months ago), Fashion and Accessories (58%, up from 54% six months ago), Fitness and Wellness (remains the same at 47%), Buying or Upgrading a home/property (36%, up from 21% six months ago), Continuing Education for self improvement (35%, up from 7% six months ago) and International (personal) Air Travel (30%, down from 59% six months ago).

The MasterCard Survey on Consumer Purchasing Priorities, released twice yearly, provides valuable insights into consumers' discretionary spending priorities for the six months ahead. The latest survey was conducted from 23 March to 18 April 2009 and involved 9,211 consumers from 21 markets. Data collection was via personal, telephone and Computer Aided Telephone interviews, with the questionnaire translated to the local language wherever appropriate and necessary.

The MasterCard Worldwide Index of Consumer Purchasing Resilience measures the resilience of the top planned expenditure categories of consumers to spending cutbacks. The Index is derived from the following data - the categories of goods and services that consumers would spend on in the coming six months, how important each of these categories is to consumers and if they would cut back on their discretionary spending over the next six months. The Index and its accompanying reports do not represent MasterCard financial performance.

When it comes to areas where consumers are not willing to cut back, Australians view health and fitness as non-negotiable.

Fitness and Wellness (Resilience Index score of 82.4) was the category least likely to be affected by a decrease in consumer spending, followed by Continuing Education (82) and Property (67). An Index score of over 50 indicates that the planned expenditure is unlikely to be cut back; whereas a score below 50 suggests that it is vulnerable to cutback in spending by households.

Looking further afield, China (70%), Kuwait (69%), Saudi Arabia (67%) and Japan (63%) have the highest percentage of consumers planning to maintain their discretionary spending, while Qatar (21%), South Africa and India (20% each) have the highest percentage of consumers planning to increase their discretionary spending in the next six months.

Dr Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard Worldwide said, "The global recession does not appear to have a serious impact on the urban middle class in the Asia/Pacific, Middle East and Africa region compared with previous recessions. Private consumption is holding up well in the region; and in many markets consumers are either planning to maintain or increase their discretionary spending in the next six months. Everything else being equal, the latest findings in consumer purchasing priorities are very positive for a stronger outlook of domestic consumption going forward, in spite of persistent uncertainty in the global economy."


Market highlights include:

Asia/Pacific

• The majority of consumers in China (70%), Japan (63%), Indonesia (59%), India and Hong Kong (58% each) plan to maintain their discretionary spending for the next six months at the same level as they did six months ago.
• In Taiwan (62%), the Philippines (54%), Malaysia (49%), New Zealand and Thailand (46% each), the majority of consumers are looking to reduce their discretionary spending in the next six months.
• Spend on Dining and Entertainment ranks top priority for consumers in Asia/Pacific (71%), in the coming six months. It took top spot in 12 of the 14 markets surveyed in Asia/Pacific: Thailand (100%), Indonesia (89%), Hong Kong (85%), China (83%), New Zealand (79%), Vietnam (78%), Malaysia (76%), Taiwan (73%), Australia (70%), India (67%), Japan (48%) and Singapore (43%). Compared to six months ago, more consumers in Asia/Pacific are prioritizing Dining and Entertainment for discretionary spend in the coming six months (71% currently vs. 59% six months ago).More consumers plan to spend on Fashion and Accessories (50%) compared to six months ago (46%) It was among the top three spending priorities for consumers in Indonesia (73%), China (63%), the Philippines (61%), Vietnam (60%), Australia (58%), New Zealand and Thailand (55% each), Hong Kong and India (48% each), Taiwan (41%), Singapore (40%), Malaysia (38%) and South Korea (35%).
• More consumers also plan to spend on Fitness and Wellness (37%), compared to six months ago (34%), with consumers in India (66%) leading the pack. This category is among the top three spending priorities for consumers in New Zealand (53%), Australia (47%) and Malaysia (37%).
• While personal travel was among the top three categories of discretionary spend for consumers in ten of the 14 markets in the last survey, only consumers in Hong Kong (42%) and Singapore (30%) now consider it among their top three discretionary spending priorities for the six months ahead.

• Spending on Children's Extra Curricular Activities/Private Tuition is the most resilient to cutbacks, with Vietnam (Resilience Index score: 96), China (95) and the Philippines (91) demonstrating the most resilience in this category.

The following graph shows the percentage of people spending in the corresponding category in the next six months (blue) and the Index Score of consumer spending resilience (red). This graph represents responses from Asia/Pacific (Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Australia, India, Japan, South Korea and Singapore, Taiwan, Thailand, Vietnam).

^*To maintain the statistical robustness of the Index, a Resilience Index Score is presented only if a category received a market response of 30% or more

More information on the Index can be found at the website www.masterintelligence.com

Based on the MasterCard Survey on Consumer Purchasing Priorities, the MasterCard Worldwide Index of Consumer Purchasing Resilience is part of the MasterCard Worldwide Index suite of research products in Asia/Pacific, Middle East and Africa. The others include the MasterCard Worldwide Index of Consumer Confidence and MasterCard Worldwide Index of Women's Advancement. Besides these, MasterCard also regularly releases its Insights reports; the series is part its ongoing research and analysis of business dynamics, financial policies and regulatory activities in the Asia/Pacific, Middle East and Africa region. Over 60 Insights reports have been produced since 2004. MasterCard has also released a series of four books on Asian consumer insights, authored by its Asia/Pacific economist, Dr. Yuwa Hedrick-Wong and published by John Wiley & Sons. The MasterCard Indexes and Insights reports are available at www.masterintelligence.com

MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com.