Sunny mood

The key message from the ACNielsen Consumer Confidence and Opinions Survey for the first half of 2006, published in this newspaper yesterday, is that India continues to score in sunny optimism. The country has topped the consumer confidence index in both the 41-nation global survey and the 14-country Asia-Pacific study""in stark contrast with the trend for the rest of the Asia-Pacific, where the sentiment is turning negative. This is a vote of confidence in the opportunities now evident in India, and reflects the everyday visual and anecdotal evidence. India tops the list among the Asia-Pacific countries on all three counts""job prospects, the state of personal finances, and perceptions of whether this is a good time to buy things needed over the next 12 months. India's scores stand out against some of the other countries in the region. For example, 36 per cent of the Indian respondents felt their job prospects were excellent over the next 12 months, whereas only 11 per cent of the Chinese and 2 per cent of the Japanese expressed such optimism.

But the numbers should be treated with caution, because there are some contra-trends in evidence, and some of the numbers will raise eyebrows. For instance, despite the high level of optimism in India, the Indian economy itself is said to be a major worry for close to half those polled in the country. The pattern of savings and expenditure is also confusing. On the one hand, India is at the higher end of the spectrum of countries in the Asia-Pacific when it comes to savings. If those numbers reflect reality, they suggest that financial conservatism still prevails despite the sharp surge in retail lending that has taken place in recent years. Certainly, the survey responses show that Indians are near the bottom of the heap when it comes to spending on vacations, buying new clothes, spending on out-of-home entertainment and investing in new technology gadgets. Perhaps the key to solving the puzzle is the fact that these are rankings""so while Indians may be borrowing and spending more than before, they continue to appear conservative when compared with people in other countries. But the survey findings strain credibility in some other respects too, since the Chinese are shown as poor savers although that country has among the highest savings rates in the world. It is important to note that this is an internet-based survey, and therefore the findings are not necessarily representative.

If one sets aside the concerns on these counts, what can be inferred from the findings? Despite the fact that the mood is upbeat among Indians, on the back of good job prospects and comfortable perceptions of personal finance, the worries about the economy could indicate that this optimism is tenuous. Interpreting the expenditure and savings pattern, which holds the key for marketers, it is easy to spot a similar dichotomy""why would people who see such a sunny future be so reluctant to spend and enjoy themselves? What makes this particularly intriguing is that an internet-based survey would tend to focus on respondents who are likely to be young and urban""a category that is happy to take on personal debt, reflecting high confidence in their own futures.