Indians on a spending spree

EXPERT OPINION

Sarang Panchal

Global consumers' confidence remains at 2005 levels, with Indians leading the world in the 2006 ACNielsen Global Consumer Confidence Index (CCI), followed by the Norwegians and Danes.

According to ACNielsen, the world's leading market research and information company, the 2006 ACNielsen Global Consumer Confidence Index remained at the same level of 98 as in the November 2005 study.

By regions, North America has been at its November 2005 level of 107, while Asia Pacific showed a significant drop from 101 last year to 94. Europe more or less remained the same at 93 as against 95 last year.

India again tops the entire world for the third time in a row since the Index was established in early 2005. It scored a high of 131 in 2006 and is closely followed by the Scandinavian countries of Norway (130) and Denmark (127), which made their way into the ranking as the world's second- and third-most optimistic markets respectively.

Indians are exceedingly feeling bullish about the job market (with 90 per cent of the respondents rating it as excellent or good) as well as the state of their personal finances in the next year (86 per cent).

On the other hand, Portuguese and Koreans are terribly pessimistic about both the aspects in their country, with over 90 per cent of them saying that it will be bad.

The optimism amongst Indians also translates into their perception that it is a good time for the people to buy the things they want in the next 12 months.

India's booming economy shows no signs of slowing down, which helps make the nation the world's most optimistic country again. Along with the continued IT boom came the new generation with lots of spare cash and the willingness to experiment.

These well informed, well groomed consumers are now the target for all products from insurance to durables, and the marketers who can touch them first will reap the benefit in the long run.

While the level of consumer confidence declined slightly in Asia Pacific with New Zealand and Korea registering a significant decline, it remains the region housing the most confident consumers of all. Hong Kong (111), Indonesia (111), Singapore (110) and the Philippines (100) registered increases of five to seven points in their index scores respectively.

The least optimistic countries in Asia Pacific are Taiwan (80), Japan (79) and South Korea (54).

Major concerns
While overall consumer confidence has been sustained, globally, consumers continue to cite the economy (47 per cent), health (37 per cent) and job security (31 per cent) as their major concerns for the next six months with varied levels of importance by regions.

The concern about their economy ranks highly in Asia Pacific and recorded a major increase in North America. For Indians, too, the economy is a major concern.

While scaling crude oil price is one of the major concerns for Indians, the upward rising interest rates is probably the cause that has made the economy the biggest concern for Indians. About 30 per cent of consumers are willing to repay their loans to avoid steep interest fees. But the fact that the index is still over 100 is proof that consumers still harbour hopes.

Led by Thailand (77 per cent), Malaysia (71 per cent) and Indonesia (70 per cent), eight of the 10 markets expressing greatest concern for the economy originated from Asia Pacific.

Germany and Turkey are the only two European markets with a high level of concern about the economy, taking over from Greece and Austria, both of which made it to the top 10 list in the previous survey. Yet when compared with last November's survey, people in Greece, the Philippines and Korea appear to be less concerned than before about their economy.

The level of concern about health has dropped among Indians, but it is still top-of-mind for consumers across Asia Pacific. Interestingly, compared to other regions, North Americans were the least concerned about job security.

With advanced healthcare benefiting people across the board, Indian consumers' concern about health has gone down significantly. Yet they are now more sensitive about matters concerning health and are willing to spend on the best possible service when it comes to healthcare-related products.

For marketers belonging to this category, quality should definitely be the primary focus to lure the new age consumers.

Ever since reports of outbreaks of the avian flu first appeared in Europe, on the tail of an occasional mad-cow outbreak, consumers in the continent have shown increasing concern for health, surpassing their North American and Asia Pacific counterparts.

Nearly four in 10 Europeans cited health as one of their major concerns after the economy. Asia Pacific follows at 36 per cent and North America at 34 per cent. Topping the world with the greatest number of health-conscious consumers were Hungary, the Czech Republic, Slovakia and people in the Baltics.

Spending desires
Although putting spare cash on a savings instrument is still the most popular avenue for Indians, the bullish stock market also makes investment in mutual funds and shares favourable options (40 per cent).

In fact, preference for equity and mutual funds exhibited by Indians is matched only by those in Hong Kong among all the countries studied, which underlines the spread of equity culture in India. A seven percentage point drop is seen in Indians' desire for holidaying, while an equal rise is seen in people's fascination for out of home entertainment.

Time is a constraint for more and more people because of demanding career and family obligations; there is hardly any time to take planned holidays.

The mushrooming of multiplex theatres, theme parks and so on in city outskirts have offered Indian consumers more options to relax within the periphery of their own city, where they can relax by taking a day off rather than planning a long holiday.