Tokyo (Reuters Life!): Advertising spending in Asian economic powerhouses such as China will see double-digit growth in the next few years, buoyed by firm consumer confidence and a growing middle class, a top advertising executive said last week.
“We see optimism and real increases, particularly in the big markets,” said Jim Heekin, Chairman and CEO of the Grey Group, a global advertising firm.
“Certainly in India and China, 10 percent increases at least in advertising. We’ll see that kind of healthy growth in most of the faster-growing economies out here,” he told Reuters in a telephone interview.
One of the keys to this is the region’s big population, with the growth of a middle class in strong economies such as India and China coupled with substantial population numbers.
By contrast, Australia’s economy may be doing well, but its smaller population means less potential advertising, while Japan suffers from an ageing society and stagnant economy, he added.
“We see rising middle-class (numbers) in Indonesia, India, China. You have self-serving markets with millions and millions of people,” he said.
While there are still substantial populations of the economically disadvantaged in Asia, buoyant consumer confidence and increasing disposable incomes are driving consumption across the board, though some sectors are doing better than others.
About two-thirds of Asian shoppers made their final buying decisions on the spot in stores, reflecting both the desire to spend as well as overall confidence, Heekin said.
A study on shopping mindset by the Grey Group released in July that covered more than 2,100 shoppers from eight countries from Australia to India showed that for many people in Asia, shopping is more than just picking up products.
The other countries in the study were Japan, Korea, Malaysia, Indonesia, China and Vietnam.
While the Asian and U.S. markets were about the same size now, Asia was likely to out grow the United States in the next two or three years, and certainly by 2014.
“Of course, the U.S. is important because of its size and relative buoyancy, but as one looks at Asia, barring some disastrous occurrences, you’re looking at the next four, five years of double-digit growth,” he said.
“You’re just not going to see that in the States or in Europe. Europe as you know is struggling mightily.”