 "India stays on top in global consumer confidence: Survey")
Nielsen found consumer confidence in urban India for the quarter ended March has increased by as much as nine points to 130. Given that inflation is low, rural consumption is 20 points higher than urban India. About 44 per cent still feel India remains in an economic recession. About 83 per cent of urban India (those polled online) had the highest levels of optimism on job prospects in the next one year, while it was 74 per cent in the first quarter of 2014. This quarter, India is followed by Indonesia (74 per cent) and Philippines (73 per cent).
Around 80 per cent of those polled indicated the state of personal finances was good or excellent in Q1 of 2015 (76 per cent in Q1 of 2014). The top concerns remain job security (22 per cent), sustaining a work-life balance (11 per cent) and the state of the economy (nine per cent).
Piyush Mathur, president, Nielsen India, says the reaction is in anticipation of improvement through reforms and stimulus announced by the government, though the economic recovery is yet to manifest in FMCG and auto sectors (consumer sectors) over the past few quarters. As stated in earlier reports, Mathur notes FMCG consumption follows consumer sentiments with a lag of two quarters.
As a result of increasing consumer confidence over the past couple of quarters, the current index records only a slight revival in the FMCG growth rate (10.3 per cent in Q1 of 2015 from 8 per cent in Q4 of 2014). The food segment growing at 11.3 per cent continues to fuel the FMCG sector growth, while home and personal segment at 9.3 per cent remains sluggish, says Mathur. Urban growth, especially, in the metro regions (at 8.4 per cent), are scripting the FMCG sector revival, according to Nielsen.
Mathur adds infrastructure, engineering and other industrial sectors are yet to gather pace. The fall in inflation is expected to have an impact on disposable income over time, but it will take time to recover.
The willingness for discretionary spends, however, has improved, as 65 per cent indicated that this is a good time to buy things that they want (61 per cent in Q4 of 2014 and 54 per cent in Q1 of 2014). About 49 per cent would purchase new technology products.
Around 79 per cent of the respondents admitted to changing their spending habits to save more. Around 49 per cent saved on gas and electricity, 45 per cent spent less on new clothes, and 35 per cent cut on holidays and short breaks.
Now, 64 per cent are willing to put spare cash in savings. The preference for mutual funds went up with 40 per cent, while it was 30 per cent in Q4 of 2014. A third (30 per cent) will look for better deals on insurance, home loans and credit cards (25 per cent in Q4 of 2014).
The Nielsen Global Survey of Consumer Confidence and Spending Intentions measures perceptions of local job prospects, personal finances and immediate spending intentions in over 60 countries. However, internet audiences in developing countries tend to be younger and more affluent than the general population.