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9 May 2010
Mumbai, India
In the first quarter of 2010, Consumer Confidence in India rebounded to reach its highest level since the third quarter of 2007, providing the most definitive sign that India is fast recovering from the economic downturn, according to the latest edition of the Nielsen Global Consumer Confidence Index. With 127 index points, India ranked number one in the recent round of the survey, followed by Indonesia (116) and Norway (115).
Nielsen’s Global Consumer Confidence Index tracks consumer confidence, major concerns and spending intentions among more than 27,000 Internet users in 55 countries. In the latest round of the survey conducted between March 8 and March 26, 2010, consumer confidence in many markets rebounded to pre-recession levels of late 2007 and early 2008.
Consumer confidence rose in 41 of the 55 countries surveyed during the quarter. As the world’s consumers started to spend again, they drove the global index up to 92 points (100 = average) in the first quarter. This represents a six point increase from six months ago and only two points short of the 94 point index mark in Q3 2007, just prior to the decline into world recession. Consumer confidence hit an all time low of 77 index points in early 2009, following the collapse of the international financial system, before steadily increasing again last year.
“The rising confidence index shows a rebounding faith in economy and hope for a more optimistic future. India is one of the fastest growing markets in the world and the current consumer belief that recession would soon be a thing of the past has filled Indians with confidence,” said Piyush Mathur, Managing Director - South Asia, The Nielsen Company.
42 percent Indians think that the country is under recession at the moment. Of these 68 percent Indian consumers believe that the country will be out of recession in the next twelve months, making India the most optimistic country globally who believe that recession will be a thing of the past in a year’s time.
Lithuania (46), Croatia (48), and Portugal (51) were the most pessimistic nations. Taiwan (+14 pts), Singapore (+11), Israel (+10) and Colombia (+9) were among the highest increases in consumer confidence in Q1, while Greece (-15), in the midst of a financial collapse, recorded the steepest decline.
Optimism reigns high in India
India retains its number one spot with 91 percent votes as the most optimistic country where job prospects are concerned. 25 percent Indians think that job prospects in the country will be ‘excellent’ and 66 percent think that it will be ‘good’ in the next twelve months. With 76 percent votes, Singapore follows India in its optimism about job prospects.
Indians also emerge the most optimistic about the state of their personal finances in the next twelve months. In the last round of the survey wherein Indians were glum about their personal finances, in the latest round they have emerged the most optimistic with 84 percent votes. 15 percent Indians think that personal finances will be ‘excellent’ and 69 percent think it will be ‘good’. Indians are followed by Indonesia (77%) in their optimism about the state of their personal finances in the next twelve months.
Optimism in job prospects and personal finances is reflecting in Indian’s willingness to spend. India is the third most optimistic country which thinks that it is an opportune time to buy the things that they want and need considering the cost of things today and their state of personal finances. More than half the Indian consumers (52%) believe so. 8 percent Indians think that it is an ‘excellent’ time to buy the things that they want and need and 44 percent think that it is a ‘good’ time to make purchases.
“Indian job market is opening up, which also means that finances are improving with better jobs, and more people now have the power to spend on discretionary items. So it’s not a surprise that Indians think that the time is ripe to spend on things they desire,” said Mathur.
Spare cash is for spending
The signs of downturn are fading and as a result Indian consumers have loosened their purse. After meeting their necessary living expenses Indians put their spare cash into Savings, a favourite for many a round of this survey, but the percentage has gone down by 5 to 60 percent compared to the last leg of the survey.
Indians have also become more daring and are investing in shares of stock and mutual funds. More than four in ten Indians put their spare cash into stocks (43 percent). This is the fourth highest percentage globally for a country to invest its spare cash in the stock market. The Chinese are the most daring when it comes to investing in the stock market with more than half the consumers (52%) investing in shares and mutual funds.
After saving and investing, Indians like to spend their spare cash on Holidays/ vacations (38%). This takes the third spot on the spending list of Indians pushing down buying New technology products (35%) to fourth spot in the last round of the survey. However, Indians still rank sixth in their willingness to buy new technology products.
Other areas where Indians love to spend their spare cash are on New clothes and Home improvements/ decorating (both 32%), Paying off debts (29%), Out of home entertainment (23%), and Retirement fund (22%).
“Old habits die hard, and Savings seems to be one of them. But who is complaining, it did help to wade us out of the recent economic downturn. Having said that, we see a lot more investment by Indians on the stock market and in personal activities like holidays, etc, which is a sign of a recovering economy and more importantly a recovering consumer mindset more attuned to making purchases than hoarding up available resources in fear of a gloomy future,” said Mathur.
What is still bothering Indians
Job scare and financial concerns are a thing of the recent past for Indians. It has been replaced by a concern for Increasing food prices, which has beaten all other concerns and is the biggest concern (17%) for Indians in the first quarter of 2010. In fact India tops all other countries where increasing food prices are concerned.
Work/ life balance (11%) is the second biggest concern for Indians. The next biggest concern, and surprisingly it is not Job security as one might expect, it is Global warming, with 10 percent Indians considering it the third biggest concern in the latest leg of the survey. India also tops all countries surveyed in its concern for global warming. For Indians Job security (9%) comes only after global warming in their list of biggest concerns.
Other concerns bothering Indians are Terrorism, Health, and Children’s education and/or welfare (all 7%). Concern over Economy has gone down to 6 percent. A similar concern is shown over Parent’s welfare and happiness (6%), fourth highest globally. With 5 percent votes Increasing fuel prices come next, this is also the third highest percentage globally for increasing fuel prices. Debt and increasing utility bills follow with 3 percent votes each. Political stability is a concern bothering 2 percent Indians and a meagre 1 percent Indians are bothered about Crime and Tolerance towards other countries values.
“In India food accounts for a major portion of the household expenditure, thus rising food prices is becoming a major snare for Indians. When it’s not the pressure of increasing prices that bother Indians then it’s global warming, which has become a prominent concern lately. The changing weather conditions has made Indians fear the predicted end if things like deforestation, industrialization without proper planning, etc. continue as they have been going on for so many years,” said Mathur.
About the Nielsen Global Consumer Confidence Survey
The Nielsen Global Consumer Confidence Survey was conducted between March 8 and March 26, 2010 and polled over 27,000 consumers in 55 countries throughout Asia Pacific, Europe, Latin America, the Middle East and North America about their confidence levels and economic outlook. The Nielsen Consumer Confidence Index is developed based on consumers’ confidence in the job market, status of their personal finances and readiness to spend. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications. The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com
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