two points to 133 in the recent leg of the Nielsen Global Consumer Confidence Index, representing a dip for the third consecutive round since its peak score of 137 in late 2006. India, which had topped the twice yearly Global Consumer Confidence Index conducted by The Nielsen Company five times in a row before, has moved to second position now, with Norway coming first in the November 2007 survey.
This is in line with consumer sentiments worldwide. The latest survey, conducted from October to November, polled about 26,312 Internet users in 48 markets. According to the latest Global Consumer Confidence Study conducted by The Nielsen Company, more than a quarter of global consumers expect a global recession in 2008, resulting in a dip in confidence in 21 of the 48 markets Nielsen surveyed. Around 27 per cent of the Indian respondents too fear a global recession in the next 12 months.
In addition to India, other Asia Pacific markets including Indonesia, Australia, Hong Kong, Vietnam, New Zealand and Singapore were all among the world's 10 most optimistic countries in the poll - with Indonesia, Australia and Singapore in particular registering an increase in consumer confidence levels - making Asia Pacific the most optimistic region worldwide.
Though consumer confidence in India has dropped slightly, Indians are very optimistic about local job prospects in the next 12 months. In the survey conducted last year, 93 per cent of Indians polled considered job prospects in the country to be "excellent or good" over the next 12 months. This year, 38 per cent Indian respondents considered job prospects in the country excellent and 57 per cent respondents considered them to be good. At 95 per cent, Indians are the second most optimistic people where the job market is concerned.
"The Sensex is constantly rising as a result of the booming economy of the country. New avenues are opening up constantly, with various MNCs setting up shop in the country. Indian companies are entering foreign soil with various high profile acquisitions. The whole world is watching India and it is quite likely that that has instilled Indians with the confidence that the job market is good," says Sarang Panchal, managing director-designate, Asia Pacific, The Nielsen Company.
The perception of healthy job prospects for Indians over the next 12 months also makes them confident about their personal finances in the same period. Some 14 per cent of Indian respondents believe the state of their personal finances will be excellent, and 74 per cent believe they will be good in the next 12 months. Indians are the most optimistic people (88 per cent) in the matter of personal finances. Last year too, nine out of 10 people felt that their personal finances were excellent or good.
Good prospects for jobs and finances give Indians the freedom to indulge themselves and 60 per cent of them feel that this is the perfect time to buy things that they want or need.
"The multitude of malls and shopping complexes that are mushrooming all over the place suggests that someone out there is spending a good amount of money on themselves and their families, and this is a good opportunity for marketers to cash in on this spending spree," says Panchal.
"These trends," he points out, "are no longer restricted to the bigger metros; smaller towns too have their share of malls and branded shops. Money is not just in the hands of a few city dwellers, it has reached far and beyond."
Saving for a rainy day is the most preferred option by more than half the respondents (54 per cent) after covering their essential living expenses. Around 51 per cent of Indians invest in shares and mutual funds as compared to 53 per cent Indians last year.
"The rising Indian stock market index has led to greater investments in stocks and mutual funds by Indians. With the onset of various media, both print and electronic, news of the market reaches the living rooms of people and we see from housewives to students to retired people all taking a fancy to the trading business," says Panchal.
Interestingly, 34 per cent Indians spend on new clothes after spending on essentials. Spending on holidays (33 per cent), home improvement and decor (30 per cent), new technology (29 per cent), out of home entertainment (28 per cent), and paying off debts (28 per cent) are other areas where Indians spend.
"Though we get a sense of splurging with good disposable cash in the hands of individuals, Indians are also prudent in thinking that to maintain their current lifestyle even when they get old and retire, it is important for them to save now. Hence, 20 per cent of Indians invest in retirement funds, which is the sixth highest globally," says Panchal.
Despite the fact that people are spending less globally and 13 per cent of global consumers have no spare cash after meeting their essential living expenses, only 4 per cent of the Indians surveyed said they had no spare cash left with them, a good indicator of the improving financial condition in the country.
Confidence levels have dropped across countries globally and consumers express some major concerns for the next six months. For Indians, the economy of the country tops the list of concerns with 30 per cent votes, which is 16 per cent less than the last edition of the survey, conducted in May 2007.
In the event of a downturn in the local economy, Indians would be most concerned about inflation (52 per cent), unemployment (50 per cent), political stability (37 per cent), rise in interest rates (36 per cent), civil conflicts (14 per cent), and falling property prices (12 per cent). Around 11 per cent Indians are also concerned about strikes in case of a downturn in the economy, the highest along with the Philippines for any country in the Asia Pacific.
With 28 per cent people mentioning it, health and political stability are the second major concern for Indians in the next six months. There is a 9 per cent increase in respondents who think that terrorism is a major concern for India, with 25 per cent voting for it, the second highest percentage for any country globally; Turkey leads the list with 59 per cent.
Other concerns include job security (23 per cent), global warming (18 per cent), crime (1 cent), immigration (2 per cent), and war (1 per cent).
Taiwan (74 per cent) tops the world with the most people concerned about the state of the economy in the next six months, followed by China (71 per cent). In fact, seven of the 10 markets most concerned about the economy are in the Asia Pacific.