Consumer confidence in India increased seven index points to 128 in the second quarter, bumping the country up to the top spot among the 60 countries measured in Nielsen’s Global Survey of Consumer Confidence and Spending Intentions. The latest increase surpasses Indonesia (123), which previously held the top spot for five consecutive quarters.
“Consumers in India have indicated increased levels of confidence in the second quarter when the country’s general elections were taking place in the country,” said Piyush Mathur, president, Nielsen India. “This buoyancy is yet to translate into increased consumption across sectors. Despite the ongoing inflationary trend and expectations of a poor monsoon, consumers are likely to open their purse strings as we head into the festive season in response to savvy marketing stimulus.”
In other Asia-Pacific countries, confidence increased in the Philippines (120), South Korea (53) and Malaysia (93) while holding steady in China for a third consecutive quarter at 111.
“In China, per-capita spending continues to grow with the increase of disposable income and as the government transforms the country’s investment-driven growth strategy to one that is consumption led,” said Yan Xuan, president of Nielsen Greater China. “Deepening urbanization serves as another key driver behind the high Chinese consumer confidence level. Half of China’s 1.3 billion people have moved to towns and cities, and the urbanization rate is still low compared with the U.S. and Europe. This translates to millions of new emerging consumers with cash to spend in the coming decade. These consumers share the same aspiration and pursuit for a better life as the existing middle class, and they will put their increasing disposable income to work for them.”
Discretionary saving intentions in the Asia-Pacific region decreased across all categories measured, with the biggest declines for saving (62%) and investing (34%), which dropped 5 and 4 percentage points from the first quarter, respectively. Spending intentions decreased in every category except new technology products, where spending intent increased 2 percentage points to 37 percent.
A deeper dive into the drivers of India’s high consumer confidence index score reveals that job sentiment improved 20 percentage points from the third quarter of 2013, as 83 percent of Indian consumers said they feel optimistic about future prospects. Furthermore, the correlation between consumer confidence and job prospects has been high in India dating back as far as the beginning of the survey in 2005.
Use the Global Consumer Confidence Trend Tracker to explore consumer confidence in India dating back to 2005.
Comparatively, high consumer confidence levels in China correlate positively with sentiments about job prospects and personal finances, but that optimism does not reflect consumers’ recessionary sentiment. And as such, recessionary sentiment plummeted from 41 percent in the fourth quarter of 2011 to 26 percent in first quarter of 2012, despite other consistently positive sentiments.
For more detail and insight, download Nielsen’s Global Survey of Consumer Confidence and Spending Intentions.
The findings in this survey are based on respondents with online access across 60 countries. While an online survey methodology allows for tremendous scale and global reach, it provides a perspective only 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.