MUMBAI: Even if the global consumer confidence has fallen in September, courtesy fading hopes for a full economic recovery this year in most parts of the world, Indians still have emerged as the most optimistic consumers globally.
However, after showing an upward trend for the first two quarters of 2010, Indian consumer confidence levels appear to have stabilised as they are wary of the uncertainties that surround global economic conditions.
The findings have come from the Nielsen Global Consumer Confidence survey for the third quarter of the year.
With 129 index points, India is 12 points ahead of Thailand (117 index points) in the Q3 ‘2010 survey.
The report suggests that Indians are willing to allocate a greater share of discretionary expenditure to equities and new technologies.
“Indian consumers are confident about their economy and have shown similar confidence levels as the second quarter of 2010; however these levels have not increased like they did in the first two quarters of 2010. This indicates stabilisation in the trend and also reflects the fact consumers are wary of the uncertainties that surround global economic conditions,” said The Nielson Company managing director – consumer Justin Sargent.
According the survey, 33 per cent Indians believe that the country is currently under an economic recession, a two percentage rise over Q2 2010. Meanwhile, remaining 67 per cent of Indians don‘t think that India is under recession.
In Q3 2009 more than half the consumers surveyed believed that India was under an economic recession.
Furthermore, more than nine out of ten Indians (91 per cent) are optimistic about their job prospects in the next 12 months. This is one percentage point lower than the last leg of the survey, but still India tops the list of countries who think that their job prospects are excellent or good in the next 12 months. 29 percent Indians consider their job prospects “excellent” and 62 per cent consider it “good”. Singapore (78 per cent) and Thailand (77 per cent) are the next most optimistic nations when job prospects in the next 12 months are considered.
The confidence in job prospects also translates into optimism on the financial front for Indians. More than eight in ten Indians (83 per cent) are optimistic about their state of personal finances in the next 12 months, the highest percentage globally. 14 per cent of Indians consider their state of personal finances “excellent” and 69 per cent consider it “good” in the next 12 months. Indonesia (80 per cent) and Denmark (77 per cent) are the second and third most optimistic nations respectively in terms of the state of their personal finances in the next 12 months.
An optimistic outlook in terms of job prospects and personal finances gives Indians the confidence to spend. In Q3 2010, nearly six out of ten Indians (59 per cent) are optimistic that it is a good time to buy the things that they want and need over the next 12 months.
“Indians appear to have loosened their purse strings compared to previous quarters. While some of this ‘propensity to purchase‘ can be attributed to the advent of the festive season, a combination of factors will lead to greater spending and more enthusiastic buying behaviour as marketers tap into the confidence the Indian consumer seems to be exuding.” added Sargent.
Nielsen‘s Global Consumer Confidence Index tracks consumer confidence, major concerns and spending intentions among more than 26,000 Internet users in 53 countries. In the latest round of the survey conducted between 3 – 21 September 2010, consumer confidence in most markets showed continued spending restraint.
More than half (56 per cent) of global consumers believe they are currently in recession and 48 per cent do not believe they will be out of a recession in the next 12 months.
Meanwhile, the study noted that Asia Pacific is the most confident region reporting an index of 98, followed closely by Middle East/Africa at 97 points.
In fact, nine of the top 10 most confident nations hailed from Asia Pacific countries: India (129 Index points), Thailand (117) and Australia and Indonesia (115), Philippines (114), Singapore (113), China (104) and Malaysia and Hong Kong (103).
Consumer Confidence Index levels above and below a baseline of 100 indicate degrees of optimism and pessimism. While positive sentiment drove confidence levels up in the first half of this year, consumer confidence declined in 20 of 53 global markets in the third quarter.
Increasing food and utility prices remain biggest concern for Indians
The survey highlighted that the ever increasing food prices is the biggest concern for Indians over the next six months.
At 15 per cent, it has increased by two percentage points compared to the previous round of the survey. China tops the countries in its concern over increasing food prices with 36 per cent of consumers in China voting it as the biggest concern over the next six months. India is fifth on the list of countries that consider food prices as the biggest concern over the next six months.
Work/ life balance (12 per cent) and Job security (10 per cent) follow at second and third spot as the biggest concern for Indians in the next six months. This is followed by Global warming (9 per cent – third highest globally), Children‘s education and/or welfare (8 per cent), the Economy and Health (both 7 per cent), Parents‘ welfare and happiness (6 per cent), Increasing fuel prices (6 per cent), and Terrorism and Increasing utility bills (electricity, gas, heating, etc) (both 5 per cent) among others.
India tops the list of countries globally in its concern over increasing fuel prices, is fourth in its concern over terrorism and sixth globally when it comes to concern about parent‘s welfare and happiness.
“Inflation is usually a companion of heady growth and a cause for concern in rapidly expanding economies like India. Though this will remain an area of concern until prices cool down, the fact that concerns over terrorism and economic conditions have receded will continue to ensure that a general sense of optimism is not hindered.” Sargent added.
