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Indian Consumer Confidence falls to 119 points in Q2 2012

India falls out of global lead position after nine quarters according to Nielsen’s Consumer Confidence Index

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India declines four points to 119 in Q2 2012 

Consumer confidence in India declined  four points to 119 in the second quarter from 123 in Q1, according to global consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy. The levels of optimism this quarter are  seven points lower than the second quarter in 2011, where India was leading the global sentiment at 126 points. This quarter, India is the second most optimistic country, while Indonesia leads the index globally. Globally, India’s consumers confidence  remains among the highest of all the countries measured by Nielsen. 

“The drop from the top position for India, after nine quarters, indicates a growing anxiousness amongst Indian consumers today, in relation to the job prospects and spending habits,” said Piyush Mathur, president, Nielsen India Region. “Rising inflation and fuel prices, which are a direct hit on the consumer’s wallet, combined with a comparatively low GDP growth and devaluation of the rupee has taken a toll on consumer confidence. Despite the slowdown though, the nominal growth rates are still the envy of the developing world, given the size and scale of the market.” 

The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, tracks consumer confidence, major concerns and spending intentions among more than 28,000 Internet consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism respectively. In the latest round of the survey, conducted between May 4 and May 21, 2012, overall confidence

rose in 41 percent of global markets measured by Nielsen, compared to a 68 percent increase in the previous quarter. Q2 2012 confidence declined in 26 of 56 markets, increased in 23 and remained flat in seven.

Perceptions of Job Prospects, Personal Finances Decline

Almost four in five (77%) of online respondents in India are optimistic about their job prospects as well as personal finances in the next twelve months. The levels of optimisim on job prospects have fallen by seven percentage points from 84 percent in Q1 2012, and by nine percentage points for the same period last year (86% in Q2 2011). Globally, Indian online consumers, followed by online consumers in Philipines (71%) and Malaysia (70%), are the most optimisitic about their job prospects in the next twelve months. 

Job Security and Economy Remain Key Concerns 

Nielsen’s survey shows that, job security (21%) and state of the economy (12%) continue to be the biggest concerns for Indian respondents. The well-being of parents (9%), and increasing fuel prices (8%) are two other concern areas. 

Further, over half (53%) of the online respondents said they believe India is going through an economic recession this quarter.  Results this quarter show a two percentage point increase over Q1 2012 and Q4 2011, and more than a ten percentage point increase over sentiment for the same period last year (41% in Q2 2011). 

Discretionary Spending and Saving Down

According to Nielsen’s survey, intended discretionary spending and saving decreased globally in Q2 across all sectors reviewed. In India, although confidence levels have declined, over three in five (62%) online respondents said they will put spare cash in savings; 38 percent will utilize spare cash into new technology products, while 36 percent will use it for their vacations. This quarter over three in ten (32%) respondents indicated they will invest in shares and mutual funds as against 25 percent last in the last quarter (Q1 2012).

One in two (50%) Indian respondents consider it a good time to buy things they want and need. While this is consistent with the first quarter of the year, the number has declined  by six percentage points for the same period last year (56% in Q2 2011). 

About the Nielsen Global Survey 

The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted May 4-21, 2012 and polled more than 28,000 online consumers in 56 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, and 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 Nielsen Global  Survey was established in 2005. 

About Nielsen

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.