Affluent young and elderly to be Asia-Pacific's big luxury spenders

Sep 5, 2007, 5:19 GMT

Singapore - The affluent young and elderly in the Asia-Pacific region are expected to account for 83 per cent of spending on luxury goods and services by 2016, a report said on Wednesday.

Older people are forecast to hike their spending on luxury items by 2.7 times to 800 million US dollars, said MasterCard's Worldwide Insights Report.

Spending by the well-off young is set to grow 2.2 times to 1.1 billion US dollars in the same 10-year period that started in 2006.

Apart from China and India with their masses of young people, demand from premium consumers over the age of 60 and in the top third of the market by household assets is seen as outpacing growth from the young premium consumers, those in the top third of income earners with no children.

Japan tops the list with young premium customers prepared to spend 35.2 billion US dollars by 2016 and compared to 67.8 billion US dollars by their older counterparts.

With the rapidly ageing population maintaining good health and more time to enjoy it, the demand characteristics of this segment are changing, the report said.

'Instead of looking for items to buy, they seek enjoyable experiences, the report said, with many leading active lifestyles and travelling.

China emerged second with the well-heeled young forecast to spend 26.4 billion US dollars and the seniors 18 billion US dollars, followed by Australia's young spending 6.2 billion US dollars and 6.3 billion US dollars by the elderly.

The projected amounts for Taiwan's affluent young and elderly are 4.5 billion US dollars and 3.7 billion US dollars.

For India, they are 6.6 billion US dollars and 1.2 billion US dollars while Thailand's young premium consumers are forecast to spend 1.6 billion US dollars and the elderly 1.1 billion US dollars.

The definition of luxury for the elderly is 'likely to be very different from the usual consumption of luxury brands, expensive jewellery and related personal items,' the report said.