May 1, 2013
Consumer confidence in India dropped one point to 120 in Q1 2013 after topping the list at 121 in Q4 2012, according to consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy. Indonesia led the global index in the first quarter of the year, measuring at 122, India’s index stood at 123 in Q1 2012.
“The last year has seen shifting sentiment on confidence, where consumers are feeling good about themselves, but not the environment around them” said Piyush Mathur, president, Nielsen India. “This highlights a contradictory nature of the urban Indian consumer, on one hand cautious about the state of the economy, and middling company performance, but at the same time indicating a higher discretionary spending for the year. Small ticket consumption will be encouraged, but not large ticket investments like automobiles and homes” he said.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns, and spending intentions among more than 29,000 respondents with Internet access in 58 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. In the latest round of the survey, conducted February 18–March 8, 2013, consumer confidence increased in 60 percent of global markets measured by Nielsen, compared to a 33-percent increase reported in Q4 2012.
Three-fifths (60%) of respondents in India indicated they would put spare cash into savings, up six percent from last quarter (54% in Q4 2012). Forty-two percent said they would invest in new technology and products, up from thirty nine percent last quarterwhile 41 percent reported they would spend spare cash on new clothes, a five point increase.
Fifty-four percent of Indian respondents said they consider it a good time to buy things they want and need over the next 12 months, down one percentage point from Q4 2012 (55%) and the same period last year.
This quarter showed an increase in utilizing spare cash on holidays, up from 28 percent in Q4 2012 to 39 percent in Q1 2013. Almost two in five (38%) online urban Indians respondents indicated focusing on home improvement, an increase of 11 percent over last quarter (27% in Q4 2012). Intent to spend on out-of-home entertainment has also increased by 7 percent to 26 percent (19% in Q4 2012).
With a view on financial stability, online Indian respondents indicated in Q1 2013 that they will put spare cash in stocks and funds (32%) (28% in Q4 2012), clear all debts and loans (27%) (20% in Q4 2012), as well as take care of retirement funds (23%)(18% in Q4 2012).
Slightly less than four in five online consumers (79%) indicated they have changed their spending habits to save on household expenses, including using less gas and electricity (54%), spending less on new clothes (52%), and cutting down on holidays and short breaks (37%).
“Even though the levels of confidence have dropped marginally, levels of indicated discretionary spending are much higher than in the last quarter,” said Mathur. “Consumers are looking to relax their budgets over the next few months and indulge themselves in updating their homes, taking vacations and enjoying entertainment. At the same time, building up savings for the future with the retirement and mutual funds is a healthy indication of how Indian consumers are viewing this year, and the added stress on long-term financial stability is encouraging for the economy".
In Q1 2013, 73 percent indicated optimism about their job prospects in the next 12 months, three percentage points below 76 percent in Q4 2012. The same period last year saw optimism levels at 84 percent (Q1 2012).
Seventy-six percent of Indian respondents felt that the state of their personal finances is good or excellent, a steady measure for the last three quarters.
Nielsen’s survey shows that job security and the state of the economy continue to be the top concerns for Indian respondents. More than one in five respondents (23%) indicated job security as the biggest concern, up three points from Q4 2013 (20%). The state of the economy is the biggest concern for 12 percent of respondents.
Striking a balance between work and life has become the biggest concern for one in 10 Indian respondents, up one point from Q4 2012 (9%). Parents’ welfare (11%) and health (10%) were the second biggest concerns highlighted. Increasing food prices increased by three points to 7 percent from 4 percent last quarter, as the biggest concern cited by respondents.
Fifty-nine percent of online respondents said they believe India is going through an economic recession this quarter, two points lower than last quarter (61% in Q4 2012).
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted between February 18–March 8, 2013, and polled more than 29,000 online consumers in 58 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa, and North America. The sample has quotas based on age and sex for each country based on their Internet users, is weighted to be representative of Internet consumers, and has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60-percent Internet penetration or 10M online population for survey inclusion. The China Consumer Confidence Index is compiled from a separate mixed methodology survey among 3,500 respondents in China. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows, and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands. For more information, visit www.nielsen.com