Consumer confidence in India has become a mirror image of its economy. With 135 points, we have topped the Global Consumer Confidence Index conducted by The Nielsen Company yet again. This is the fifth time that India tops this bi-annual study. The Confidence Index is slightly down by two points compared to the last survey, which was done in October 2006, but that doesn't beat the fact that Indians have topped the countries surveyed this time, too.
Indian consumer confidence is in line with the release of the country's latest GDP figure of 9.4 per cent "" the highest growth India has posted in 18 years. It is no surprise, therefore, to see 45 per cent of Indian consumers surveyed rating their job prospects in the next 12 months as "excellent".
With various new avenues opening up, people will now have more options for their career planning. These may also give rise to a number of vocational course institutes, which will help people gain the kind of skills the New Age economy is likely to demand.
The high consumer confidence is reflected in the outlook of Indians. The job prospects over the next 12 months are considered "excellent or good" by 94 per cent of Indians surveyed. Personal finances in the next 12 months are also "rosy" with nine out of 10 Indians feeling "excellent or good" about it. Indians also appear generally optimistic and confident about the future, with 61 per cent believing that it is an "excellent or good" time to buy the things that they want or need.
More to spend
With increasing disposable incomes, Indians are becoming more investment-oriented. Shares of stock and mutual funds are the preferred options of investment by over a majority (53 per cent), after covering their essential expenses.
Globally, this is the third-highest figure for investment in shares and mutual funds, after Hong Kong and China, and is similar to the proportion of people who would save for a rainy day (52 per cent). Increasingly, Indians have also started travelling a lot and the country finds its way to the third slot, with 39 per cent Indians voting for it as a means of spending their extra money.
Other modes of spending the extra money include paying off debts/credit card loans, buying new clothes, new technology, and home improvement and decorative items. Retirement funds are also being given due importance by Indian consumers, with 21 per cent investing in them.
With a high propensity to spend, benefits to different industries become more substantial, which, in turn, supports a continued improvement in the economy and consumer sentiment. This is not to say that all Indians have extra money left after meeting their necessary expenses "" 4 per cent of Indian respondents admitted to not having any spare cash after their necessary purchases for discretionary spending; but this percentage was amongst the lowest in the world. This is reflective of the Indian psyche of being conservative, and it would be interesting to see if it changes during phases of buoyancy.
Cause for concern
In spite of the high confidence levels, there are still some areas of concern for consumers. Although the economy is booming, the major concern for most respondents still seems to be the nation's economy, with 46 per cent citing it as their biggest and second-biggest concerns.
This is again characteristic of the Indian tendency to be anxious, in comparison with some other cultures. Health comes second, with 31 per cent Indians considering it as their biggest and second-biggest concerns. With life expectancy increasing, it is important that we take utmost care of our health.
With compounding medical expenses and increasing mass awareness about the benefits of good health, products such as medical insurance and wellness clinics are doing well. Other concerns that mar the confidence of Indian consumers are job security, political stability, terrorism and crime. Even though concern over terrorism in India features on the global top 10 list, it has fallen by 15 points compared to the last survey results, showing an increase in the positive mindset of Indians.
Too hot to handle
Global warming has fast become an alarming environmental hazard and for a growing number of Indians; it has achieved a level of concern that is at par with people's concern about personal things such as job security.
It is time for both the government and people to understand their responsibilities and actions to slow down the worsening situation, if not improve it. This is indicative of Indians becoming "global" in their perspective and is a function of increased awareness due to media.
Pessimistic? Not Indians
The continued upbeat Indian consumers have presented a contrast with the world's most pessimistic consumers who hail mainly from Portugal, Korea, Japan, Taiwan and Hungary, who are quite pessimistic, whether about the job market, state of their personal finances or readiness to spend.
Indian consumers' attitudes are in contrast to their counterparts in Europe, South Korea and Taiwan, who are quite pessimistic, whether about the job market, personal finances or spending
Sarang Panchal
Executive Director, Client Solutions, South Asia, The Nielsen Company
