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India’s Consumer Confidence rises three points to 115 in the fourth quarter of 2013

Urban Indian consumers tighten purse strings this quarter

Consumer confidence in India indexed at 115 in Q4 2013, a three-point rise from  112 in Q3 2013, according to findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy. India is at second place amongst countries measured in the survey. Indonesia, indexed at 124, leads the index globally. Sixty-two percent of online respondents indicated that the country is going through an economic recession this quarter, down by 14 percentage points from last quarter (76%).

“The last quarter of 2013 sees optimism for consumers influenced by relative economic stability and a reduction in negative news across economic parameters,” said Piyush Mathur, president, Nielsen India. “Continuing inflation and the upcoming elections may impact consumers in the first quarter of 2014, and they are likely to tighten their purse strings now that the festival and holiday periods are over.”

The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns, and spending intentions among more than 30,000 respondents with Internet access[1] in 60 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 November 11–29, 2013, consumer confidence increased in 43 percent of markets measured by Nielsen, compared to 57 percent in Q3 2013.

Discretionary Spending & Savings

Investing spare cash in savings saw a four-point decline to 62 percent in Q4 from 66 percent in Q3  , and buying technology products saw a decline from 47 percent (Q3) to 39 percent in Q4, while the purchase of new clothes came down by six percentage points, from 43 percent last quarter to 37 percent this quarter.

In Q4 2013, 76 percent of online respondents changed their spending to save on essentials, versus 80 percent last quarter. The steps include saving on gas and electricity (54%), spending less on new clothes (49%), and cutting down on holidays and short breaks (38%).

“Discretionary spending traditionally sees a spike in the third quarter of the year, largely owing to the festival, gifting and holiday season, and the following few months see a focused reduction in the utilization of spare cash for the urban Indian consumer,” said Mathur. “This is a trend that is echoed in the findings for this quarter as well.”

Thirty-nine percent expect to sustain the savings on gas and electricity even when economic conditions improve. Twenty-three percent will spend less on new clothes, as against 17 percent respondents from Q3. More than one in five (21%) have indicated a reduced usage of their car, four percentage points more than last quarter (17%).

Perceptions of Job Prospects, Personal Finances

Optimism over job prospects has increased by seven percentage points to 70 percent in Q4, from 63 percent last quarter – but remains slightly lower than the optimism a year ago, higher optimism at 76 percent (Q4 2012). Seventy-two percent of online respondents in India indicated that the state of their personal finances is good or excellent in Q4 2013, a percent higher than last quarter. In the same period  last year that number was 76 percent.

Job security continues to be the biggest concern for 19 percent of urban respondents, followed by state of the economy (16%). Increasing food prices are a concern for over one in 10 (12%) respondents in Q4 2013.

About the Nielsen Global Survey

The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted November 11–29, 2013, and polled more than 30,000 online consumers in 60 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.

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 and mobile measurement. 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.

[1] While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of existing Internet users, not total populations. In developing markets where online penetration has not reached majority potential, audiences may be younger and more affluent than the general population of that country. Additionally, survey responses are based on claimed behavior, rather than actual metered data.

For more detail and insight, download Nielsen’s Q4 2013 Global Consumer Confidence Report.