- More Indonesian consumers were ready to spend in the second quarter of 2019.
- Despite the stable confidence, consumer concern on The Economy went up.
Jakarta, July 31, 2019 – Indonesian Consumer Confidence Index (CCI) is relatively stable at 126 pp (percentage points) in the second quarter of 2019. Indonesian consumers are the third most optimistic consumer in the world after India (138 pp) and the Philippines (126 pp), according to the findings of The Conference Board® Global Consumer Confidence Survey, in collaboration with Nielsen.
The Conference Board® Global Consumer Confidence ™ Survey, in collaboration with Nielsen also revealed that the Global Consumer Confidence Index was quite stable with 107 from 106 in the first quarter of 2019. Of the 64 countries surveyed by Nielsen, the 10 most optimistic countries were India (138), Philippines (130), Indonesia (126), Vietnam (123), United States (121), Denmark (117), China (115), Arabic Saudi (114) United Arab Emirates (113) and Malaysia (110).
Consumers in Asia Pacific remained confident, with China, India and Indonesia serving as the main pillars of global confidence. Two of the more mature economies in the region, Japan and Korea, saw confidence move in opposite directions – it declined in the former.
CCI is driven by three indicators, i.e. Consumer Perception about: (1) Local Job Prospect (2) Personal Finances and (3) Intention/Readiness to Spend, all in the next 12 months. For Indonesia, the index of Consumer Perception on Personal Finance is 80% (declined 3 compared to the fourth quarter of last year). The index of Consumer Perception on Local Job Prospects also slightly declined from 72% in the first quarter of 2019 to 70% in the second quarter of 2019. Meanwhile, Consumer Perceptions of Intention to Spend increased significantly to 61% compared to the first quarter of 2019 which was only 56%.
Indonesian Consumers were Concerned on The Economy, but More Serene on Political Stability
Consumer Concern of The Economy (36%) went up quite sharply compared to the previous quarter (31%). This factor indicates to become the trigger for more consumers (57%) who stated that the country is in a recession in this quarter, which increased considerably from the previous quarter which was 51 percent. On the flip side, Indonesian Consumers’ concern on Political Stability slightly decreased to 31% compared to the Q2 2019 (34%).
Other consumers’ major concerns included Work/Life Balance (16%), Tolerance Towards Different Religion (15%) and Terrorism (13%) that appeared in this quarter, but did not appear in the previous quarter.
“In the second quarter, more consumers are concerned about the economy, which seemed to be the impact of the General Election, whereby consumers feel uncertain about the post-Election economy state. It is not surprising then that there are also more consumers who think that the country is in an economic recession,”said Agus Nurudin, Managing Director of Nielsen Indonesia
Agus also said that concerns of political stability have declined compared to the previous quarter, meaning that Indonesians were calmer in responding to political activities that occurred in the country.
Less Consumers That Delay to Use New Technology
In terms of allocating spare cash, there were not too many changes from the previous quarter where consumers choose to Savings (67%), Vacation (44%) and Investing in stocks or mutual funds (40%). But interestingly, in this quarter consumers who allocated their spare cash for Home Improvements were less than the previous quarter, which was only 28 percent.
Regarding household cost savings in this quarter, 47% of Indonesia’s online consumers chose to cut down Out-of-Home Entertainment. On the other hand, although 39 percent of consumers think to delay costs for upgrading technology, this number has decreased from before, meaning that there are still many consumers who choose to buy the latest technology on device in the second quarter of 2019.
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ABOUT CONFERENCE BOARD® GLOBAL CONSUMER CONFIDENCE SURVEY
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen. It was conducted in May 2019 and polled more than 32,000 online consumers in 64 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample includes internet users who agreed to participate in this survey and has quotas based on age and sex for each country. It is weighted to be representative of internet consumers by country. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. However, a probability sample of equivalent size would have a margin of error of ±0.6% at the global level. This survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country.
The Conference Board uses a minimum reporting standard of 60% internet penetration or an online population of 10 million for survey inclusion. The Nielsen China Consumer Confidence Index is sourced from a separate survey conducted by Nielsen China, which is based on a mixed methodology survey of more than 3,000 respondents in China. The Global Consumer Confidence Survey was established in 2005.
The Global Consumer Confidence Index Highlights, full report and technical notes to this series are available on The Conference Board website.