Economists and retailers say that strong currencies and a travel boom are fuelling a festive shopping spree in Asia's retail capitals even though consumers remain wary of a new downturn.
With US and European consumers stuck in uncertainty, global brands are pinning their hopes on Asia, where the buying binge usually stretches from Christmas to the Lunar New Year which will take place in early February.
AdvertisementSingapore's fashionable Orchard Road is teeming with foreign shoppers, many of them from Southeast Asian countries whose currencies have appreciated sharply against the US dollar this year.
Don Triangga, a 26-year-old Indonesian tourist, said he spent 1,500 Singapore dollars (1,150 US) on a Louis Vuitton belt and a Burberry shirt, and he wasn't done yet.
"The Burberry polo shirt is a gift, but the belt I use," he told AFP while sitting next to a gigantic Christmas tree in front of the swank Ion Orchard shopping mall.
Singapore is expecting 15 percent gross domestic product (GDP) growth this year following a recession in 2009, making it Asia's fastest-growing economy in 2010, but the retail industry is still lagging behind other sectors.
Lau Chuen Wei, executive director of the Singapore Retailers Association, said consumers could be saving their bonuses as a precaution or taking advantage of the strong local dollar to shop in Europe or the United States.
This has resulted in "a leakage in shopping dollars" to other countries.
The Asian Development Bank said that the Thai baht, Malaysian ringgit, Singapore dollar, Philippine peso and Indonesian rupiah have respectively seen the sharpest appreciation against the US dollar in 2010.
These countries' stock markets have also enjoyed the most robust expansion, with Indonesia's exchange posting the most dramatic rise, thanks to investor confidence and an infusion of foreign money seeking better returns.
The ADB estimated average GDP growth in emerging East Asian economies at 8.8 percent this year, from 5.2 percent in 2009, and 7.3 percent in 2011.
The Manila-based lender cautioned that "growth momentum may ease on weak domestic US demand, uncertainty over the sovereign debt crisis in Europe and the deflationary pressures in Japan."
Fears of a bubble bursting in East Asia are also lurking in the background but that doesn't stop shoppers like Lee Hae-Kyung, a 33-year-old hospital administrator in South Korea, from spending more money this year.
Lee said her budget for Christmas gifts was 50,000 won (44 US) for each friend, five times her budget in 2009.
"It's not like I'm making more money than before, but I just feel like spending more since people around me and the whole atmosphere seem to be far more optimistic," she said in Seoul.
In Hong Kong, despite the local dollar's linkage to the US dollar, the territory's retail industry is booming, thanks to mainland Chinese visitors and the red-hot stock market and property sector.
Sales soared 18.3 percent by the end of October over the same period in 2009, according to government figures.
"The level of income growth remains very strong in China so (Chinese tourists) are likely to keep spending more," Aaron Fischer, an analyst at brokerage CLSA, told AFP.
Thai retailers can look forward to some festive cheer thanks to an improved political situation and easing concerns about the strong baht, said Jit Siratranont, deputy secretary general of the Thai Chamber of Commerce.
"That makes people have more confidence to spend more during the New Year shopping season," he said.
There's a different picture in Australia.
Australian retailers said almost one-third of customers were planning to cut back on spending this Christmas following a series of interest rate hikes to 4.75 percent, which had blown out mortgages and debt repayments.
The strong Australian dollar, which marched past parity with the greenback in October, is also hitting local business, with consumers increasingly shopping online for offshore bargains.
"Consumers are already showing signs they are watching their pennies this festive season with almost 33 percent saying they are planning on spending less this year than last Christmas," said Australia Retailers' Association director Russell Zimmerman.
In Tokyo, where shopping peaks closer to Christmas, the Japan Department Stores Association said it had not yet heard from members on buying trends.
"Gift demand will emerge later in the month just before Christmas as we usually see demand for ornaments first, which is followed by advance orders for cakes and then gifts," said a spokesman for department store chain Isetan Mitsukoshi Holdings.
"What we can say at this stage is that orders for cakes are robust. At the (flagship) Nihombashi Mitsukoshui store, the orders have so far posted a double digit growth from last year," he said.
But rather than going to parties, many people seem to be planning to spend Christmas at home, he added.
The closely-watched Tankan quarterly survey of business sentiment in Japan, whose export earnings have been dented by the strong yen, has fallen for the first time in nearly two years, the Bank of Japan said Wednesday.