Though consumer confidence has fallen marginally in India, it still ranks second with 117 index points behind Indonesia (119 points), according to a new Nielsen Global Consumer Confidence survey released today. Hong Kong recorded the highest consumer confidence increase for the second consecutive quarter in Q4 -– up 7 index points from 93 in Q3 2009 to 100 (on a scale of 0 to 200 index points) in Q4.
Globally, consumer confidence has remained stable (87 per cent) with a point increase compared to the last leg of the survey in quarter three of 2009. While eight of the top 10 most confident markets in the fourth quarter of 2009 came from Asia Pacific, including emerging markets Indonesia and India, consumers in two of Asia’s most developed markets -- South Korea and Japan -- were the least confident. Brazil (ranked 3rd) and Canada (ranked 10th) were the only countries outside of Asia to make the top 10.
The United Arab Emirates posted the biggest fall in consumer confidence (from 102 points in Q3 to 92 in Q4) – a result of the Dubai financial meltdown towards the end of 2009.
Around 58 per cent of Indian consumers believe that the country will be fully out of economic recession in the next 12 months, indicates the survey. India remains the most optimistic country over job prospects in 2010. It spearheads seven Asian countries out of the top 10 most optimistic markets in this regard. Around 17 per cent Indians think that job prospects in the country will be ‘excellent’ and 66 per cent think that it will be ‘good’ in the next 12 months.
However, there are major concerns too for Indians -- increasing food prices being the topmost (17 per cent) in the fourth quarter of 2009. In India, food accounts for 58 per cent of household expenditure compared with only 10-15 per cent in the wealthiest Western countries.
“In the third quarter of 2009, consumers had started believing that the worst was over, but runaway food prices and high grocery bills have put the cautious optimism back in them. They are still worried about the time it will take for things to get better. Until the consumers are reassured that recovery is going to accelerate and they can finally call economic slowdown a thing of the past, they are going to be cautious,” said Vatsala Pant, Director, Client Solutions, The Nielsen Company.
Job security, too, has again become an issue and it follows increasing food prices in the list of concerns (13 per cent). Work life balance is third on the list with 12 per cent Indians worrying about it. In the last round work life balance was the biggest concern for Indians with 15 per cent votes.
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Things are also "slightly glum where personal finances are concerned". The percentage of Indians who are optimistic about the state of their personal finances in the next 12 months has gone down by 3 per cent to 78. Around 12 per cent think that personal finances will be ‘excellent’ and 66 per cent think it will be ‘good’. Indians are still second behind Indonesia in their optimism over personal finances.
Decreasing confidence in the state of their personal finances is affecting Indian’s willingness to spend, notes the survey. Considering the cost of things today and their personal finances only 3 per cent Indians think it is an ‘excellent’ time to buy the things that they want and need and 38 per cent think that it is a ‘good’ time to make purchases. In the last round 51 per cent Indians thought that it was an appropriate moment to buy things, in the fourth quarter 41 percent think the same.
Indian consumers are also cautious over their discretionary spending, notes the survey. After meeting the necessary living expenses Indians put their spare cash into Savings (65 per cent). This has been the favourite mode of spare cash utilization for Indians for some time now and in the latest round of the survey has become dearer to Indians by 1 per cent.
Indians have also become more watchful of investing in the stock market. The percentage of Indians who will put their spare cash into Shares of stock/ mutual funds has gone down by 4 per cent to 40 compared to the last round of the survey. After saving and investing, Indians like to put their spare cash into new technology products (33 per cent). Paying off debts/ credit card loans has gone down in importance for Indians (30 per cent). Home improvements/ decorating (32 per cent), new clothes (31 per cent), and Holidays/ vacations (31 per cent) have taken its place.
“Saving for the rainy days has been ingrained into Indians financial planning and it has not seen any change over the years. But consumers have loosened their purse and are planning holidays and vacations and home improvements in 2010, which had taken a back seat all through 2009 due to the economic downturn in the country,” said Pant.
On the back of the Copenhagen Summit, Indian concern over global warming too has gone up by 3 per cent to 10 and their concern over the economy has gone down to 9 per cent from 12 in quarter three.
Other concerns dogging Indians are terrorism and children’s education and/or welfare, Health and Parent’s welfare and happiness, eebt and increasing utility bills, political stability and increasing fuel prices, war, crime, tolerance towards different religions, and tolerance towards other countries’ values.
The Nielsen survey, which tracks consumer confidence, major concerns and spending habits, was conducted among more than 17,500 internet users in 29 markets between December 4-18, 2009.