Indian consumers are the most optimistic about the economic performance of their country over the next 12 months. Ahead of their Chinese counterparts, Indians also perceive the country's economic performance over the past six months as having improved. According to the ACNielsen Asia Pacific Consumer Confidence Survey, 86 per cent Indians feel that economic performance has improved. Though there has been no remarkable improvement in the secondary capital markets, stability in overall corporate performance and no severe shrinkage in consumer spending has helped the usually optimistic Indian consumer stay that way.
These findings are part of the ACNielsen Asia Pacific Consumer Confidence and Opinions Survey, which was conducted amongst over 9,000 consumers across the region.
The other findings of the survey indicate that although the level of consumer confidence amongst Indians is the highest across the region, there has been a minor dip in confidence levels since the last round of the survey conducted in December last year and published in The Strategist on January 13 this year.
Things have moved quite dramatically with a change in government and the resultant likelihood of policy changes. "We are more confident than the Dragon," declares Sarang Panchal, executive director, ACNielsen India.
The overall optimism in confidence over the 12 months ahead also corresponds with an increase in the percentage of Indian consumers willing to spend their discretionary income. About 94 per cent of consumers claim that they are willing to spend money after attending to necessities, compared to 90 per cent in the last round.
Over the upcoming period, this willingness to spend will be beneficial to the branded apparel industry as well as the market for home decorations such as paints, and the domestic tourism industry.
In India, 49 per cent of consumers intend to spend money on home improvement activities, the highest across the region. Indians also seem more intent on spending on apparel (38 per cent) and domestic holidays (42 per cent).
The latter part of the year and the various festivals that come along with it will precipitate expenditure in these areas, making it essential for marketers of these and other products competing to stay tuned to consumer preference.
This anticipation of occasions for more aggressive spending has also translated into a greater number of Indians who say that they intend to also save a portion of their income (96 per cent versus 88 per cent) and allocate them to savings and investments.
An increased number of Indians intend to place their money in savings bank account (47 per cent compared to 40 per cent) and moving out of fixed deposits (38 per cent against 46 per cent) over the previous round.
More Indians than before intend to invest in equities and stocks (52 per cent compared to 48 per cent), the highest in the region, reflecting greater confidence in the domestic economy compared to Chinese investors, only 33 per cent of whom intend to invest in the domestic secondary market for equities.
This is an important indicator that reflects the strong underlying fundamentals of the Indian economy. While periods of uncertainty impede investment in equities in the short term, they can also present value-buying opportunities for investors looking to invest with a longer term horizon.
Amongst the causes for concern, Indians cite job security and political stability as their biggest concerns in the medium term, with 33 per cent stating that security regarding employment and 25 per cent identifying political uncertainty as their biggest concern compared to war, terrorism, crime and the economy.
Though there has been no broad-based reduction in the workforce, the emphasis on corporate profitability and the desire by companies to curb wage inflation by optimising their numbers is now a perennial issue.
The new element to this survey is measuring the willingness of consumers to voice their opinions publicly. The results suggest that democracy is well and alive in the Indian sub-continent. Indians are the most likely to express their opinions publicly (47 per cent) compared to any other country in the region.
Moreover, their preferred mode of public expression appears to be writing to a newspaper. Compare this to north Asia, which prefers to march in the street, or the Pacific, where writing to the local member of Parliament is the preferred route.
Click Here to download other charts.
