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© 2008. Synovate Ltd. All rights reserved.
The concepts and ideas submitted to you herein are the intellectual property of
Synovate Ltd. They are strictly of confidential nature and are submitted to you under
the understanding that they are to be considered by you in the strictest of confidence
and that no use shall be made of the said concepts and ideas, including
communication to any third party without Synovate’s express prior consent and/or
payment of related professional services fees in full.
The State of the EconomyMalaysian consumers attitudes towards the
economy and prices
October 2008
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1© Synovate 2008
Why is this all so important?- A timeline
• August 9th 2007 – Bad news from BNP Paribas triggered a sharp rise inthe cost of credit
• September 2007 – Northern Rock customers withdraw 1 billion poundssterling in a day (approx. RM6 billion)
• March 2008 – BN loses a number of states in parliamentary electionsleading to degree of political and economic uncertainty
• June 2008 – Malaysian pump prices rise to RM2.70 on the back of highglobal oil prices
• July 2008 – US Mortgage lender IndyMac collapses
• August 2008 – Synovate survey
AND SINCE THEN A BARRAGE OF ALMOST DAILY ECONOMICNEWS ALERTS !!
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Nearly 6500 interviews across 9 countries inAugust 2008
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The Global Economy
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Q1: Which of the following statements was most applicable to your view on the current state of the economy in your country?
22
49
63
8
37 39
64
20
63
FranceSouth
AfricaBrazilMalaysia TaiwanJapan Russia TurkeyUSA
[Unit: %]
How bad is it ? If you live in a ‘developed’ economy, then
things are not considered to be getting better anytime soon!
The economy
is going
downhill andwill get worse
before it gets
better
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© Synovate 2008 5
Q1: Which of the following statements was most applicable to your view on the current state of the economy in your country?
45
30
22
55
32
42
12
45
20
FranceSouth
AfricaBrazilMalaysia TaiwanJapan Russia TurkeyUSA
[Unit: %]
Far higher level of optimism in ‘developing’ countries or is it
blind optimism?
The economy
is in a bad
patch but will
quickly get
better
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© Synovate 2008 6
Q1: Which of the following statements was most applicable to your view on the current state of the economy in your country?
…going downhill and will
get worse before it getsbetter
….in a bad patch but willquickly get better
[Unit: %]
Actually it may be naivety – those that have been through
economic crises before may have learnt
The economy is………..35-49
RM1k-199915-24 50-64
RM999& below25-34
RM2k-3999
RM4k &above
58
4636 37 40
504752
17 1728 24 23 2421
14
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Q2: Have you changed any of the following monetary habits in the last six months?
Nett Change in
PeopleInvesting
Nett Change in
People
Saving-11
-28 -29
-9 -14
15
-2
-17
-38
France
South
AfricaBrazilMalaysia TaiwanJapan Russia TurkeyUSA
[Unit: %]
A large decline in saving and investing as disposable income
becomes reduced with rising inflation costs
-18 -12-27 -21
-37 -53
-11
-35
-15
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Half of Malaysians
(49% net) are nowmore likely to check
the prices of food
items that they buy
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Malaysians appear to be very prudent in comparison to
counterparts when it comes to spending on luxuries
81
52
59Compare prices first more
Less impulse buying
Spending less on luxuries 59
56
55
61
58
57
Malaysia Japan Taiwan
Q2: Have you changed any of the following monetary habits in the last six months?
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Q3a: Have you had to make cuts in your spending in the past 6 months?
5862
75
40
70
61
80
6469
FranceSouth
AfricaBrazilMalaysia TaiwanJapan Russia TurkeyUSA
[Unit: %]
But the reality is that spending cuts are evident wherever you
go…
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18
13
12
11
10
10
6
5
Holiday / leisure travel
Branded Items
Meals with family / partner
Big ticket items e.g. TV
Foods that are treat
Meals with friends
Fuel for non work trips
High-tech gadgets
Q3b: What was the first item you gave up?
The travel industry in Malaysia is likely to be the hardest hit
- indeed this is a global phenomenon
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© 2008. Synovate Ltd. 13
Q5: When you think about the current state of the economy, what is your greatest fear? Name one.
Generally a climate of worry, although a proportion of
Malaysians still remain unconcerned about the state of theeconomy!
Malaysians Americans
I am worried about losing my job / household income earner losing job - 25%
Not being able to afford sufficient food for my family – 17%
Nothing, I’m not worried – 17%
Being able to afford mortgage / rent payments - 25%
I am worried about losing my job / household income earner losing job – 20%
Losing my investment money – 13%
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58% of Malaysians have
changed a major life decision
due to the current economic
situation
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48
35
28
19
17
38
0 50 100
37
37
35
18
21
33
0 50 100
34
37
29
16
24
33
0 50 100
36
39
31
14
24
35
0 50 100
Better Same Worse
Personal Economic
Outlook
Country’s Economic
Outlook
Q6: Do you think your personal economic situation will get better or worse in the next 12 months?
Q7: How about the economic situation in your country? Do you think it will get better or worse on the next 12 months?
And the most affluent segment who largely believe their
personal situation will improve despite the overall climate
RM999 & below,
n = 123
RM1000 - 1999,
n = 176
RM2000 - 3999,
n = 262
RM4000 & above,
n = 246
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And by mid 2008,
affluent Malaysians
had spent 12% more
on luxury goods
compared to one
year ago
- Particularly on
jewelry, watches and
clothesSource: PAX Malaysia
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FINALLY –
despite
everything….53% of
Malaysians say
they are worried
but just can’t stop
spending all
together – the
highest out of the9 countries we
surveyed!
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© 2008. Synovate Ltd. All rights reserved.
The concepts and ideas submitted to you herein are the intellectual property of
Synovate Ltd. They are strictly of confidential nature and are submitted to you under
the understanding that they are to be considered by you in the strictest of confidence
and that no use shall be made of the said concepts and ideas, including
communication to any third party without Synovate’s express prior consent and/or
payment of related professional services fees in full.
Thank You For Your
Attention.Our Curiosity Is All Yours.
© Synovate 2008