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Retail Sales Forecast to Grow in Asia/Pacific in First Half 2007
China Leads the Region in Year-on-Year Growth; South East Asian Markets Expected to Perform Well
While the forecast is for positive expansion across the 12 Asia/Pacific markets included in the report, growth rates for the first six months are expected to be more modest than the robust growth two years ago when the consumption revolution in the region drove almost half the markets into double-digit growth year-on-year.
“While continued growth in retail sales is expected across the region, the source of growth varies significantly between markets,” observes Dr. Yuwa Hedrick-Wong, economic advisor of MasterCard Worldwide in Asia/Pacific. “Taiwan’s domestic consumption is basically linked to the performance of its export sector whereas growth in the Philippines has been coming from rising overseas workers’ remittances. In other markets, appreciation in their currencies has also helped. With the exception of China, private household consumption has not contributed as much to overall GDP growth. For the consumption revolution to continue to unfold in Asia, this will need to change,” adds Dr. Hedrick-Wong.
The MasterIndex of Retail’s forecast for the first half of 2007 is shown in the table (see attached PDF).
Conducted twice a year in June and December, the MasterIndex of Retail was launched in June 2003 by MasterCard as part of its knowledge leadership initiatives in Asia/Pacific. Combining 10 years of retail sales data1, factoring in the secular trend of growth of the retail industry, and using the MasterIndex™ of Consumer Confidence as an independent variable2, it provides six-month forecasts of retail sales growth in 12 markets: Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand. It is among the MasterCard MasterIndex suite of research products; the others include:
- The flagship MasterIndex™ of Consumer Confidence - the region’s most comprehensive and longest running consumer sentiment survey
- The MasterIndex™ of Travel, which combines outbound travel forecasts for the region with a survey of Asian travelers’ lifestyle trends
- The MasterIndex™ of Women's Advancement, which compares the socio-economic level of women to men.
NOTE TO EDITORS:
The full report, as well as the MasterIndex of Consumer Confidence, can be found at the website www.masterintelligence.com. A summary of the individual market forecasts is found at the end of this release.
1Based on official government statistics released in each market.
2Based on detailed analysis, it is determined that the five dimensions of the MasterIndex of Consumer Confidence have different weights in affecting the outcome, which are in turn distinct for each of the Asia/Pacific markets.
About MasterIndex™ of Retail
The MasterIndex of Retail is a short-term forecast of retail sales growth in 12 key Asia/Pacific markets – Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand. The forecasting is done twice a year, in June and December, to provide powerful predictive market intelligence that is highly relevant not only to wholesale and retail industries, but to sectors such as entertainment, food and beverage, the hospitality and leisure industry, as well as consumer goods manufacturing.
The analytical foundation of the MasterIndex of Retail is based on the development of a set of techniques that have successfully linked the MasterCard MasterIndexTM of Consumer Confidence with retail sales statistics. The survey findings of the MasterIndex of Consumer Confidence are used as a leading indicator of how consumers may act in terms of retail spending over the six-month period ahead. Thus, a link is made between consumer sentiment and actual consumer behavior.The MasterIndex of Retail forecast is one of the MasterCard MasterIndex suite of research products in Asia/Pacific. The other key MasterIndex research products include:
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The flagship MasterIndex™ of Consumer Confidence - the region’s most comprehensive and longest running consumer sentiment survey. Now in its 14th year, the MasterIndex of Consumer Confidence has demonstrated its predictive precision and has proved to be an excellent barometer of the consumer pulse in this region. Today, the survey is much sought after by analysts, academics and decision-makers in financial institutions, government agencies and multinational organizations.
- The MasterIndex™ of Travel encompasses a six month forecast of outbound travel for 12 markets (Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand) and a survey of business and personal travel trends among the urban middle class across the region.
- The MasterIndex™ of Women's Advancement, which compares the socio-economic level of women to men in 13 markets using four key indicators: participation in the labor force, tertiary education, managerial positions and above median income. MasterIndex information relates to retail and consumer economic trends only and does not constitute a projection of the business or financial performance of MasterCard Incorporated or its affiliates.
About MasterCard Worldwide
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 14 billion payments each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard Worldwide serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercardworldwide.com.