Nielsen presents Global Consumer Confidence Survey

Company Brief

Mumbai, August 11, 2009

Consumer Confidence in India is again on an upswing, registering a 13 point rise in the Nielsen Global Consumer Confidence Survey conducted in the 2nd Quarter 2009. With 112 index points India ranks second behind Indonesia (113 points) in Consumer Confidence.

Globally consumer sentiments are positive, with the Global Consumer Confidence Index, rising to 82 – an increase of 5 points (from 77) from March. This has been spurred by renewed consumer optimism and stock market gains in BRIC markets (Brazil, Russia, India, and China) and key Asian countries.

With 66 percent votes Indians are the most optimistic that India would be out of an economic recession in the next 12 months, this is the highest percentage for any country globally that thinks recession would be over in the next 12 months. A little less than half (38%) think that India is not currently facing an economic recession (3rd highest globally).

In Nielsen’s latest survey, which polled 14,029 online consumers in 281 countries late in June, 62 percent Indians thought their country was in recession – a positive reduction of ten points from a high of 72 percent when the survey ran in March 2009.

“The recent elections in India have had a positive effect on Indians’ sentiments towards its economy. With the UPA government back in power for the second term, consumers are more confident that political and policy continuity will help recover the Indian economy. Indian stock markets saw a rise soon after the elections, projecting the all round confidence of Indians in the economy and their belief that the downturn would soon see a welcome change,” said Vatsala Pant, Associate Director, Consumer Research, The Nielsen Company.

Indian optimism on a high note

Rising consumer confidence is also reflected in the perception of Indian consumers towards job prospects, personal finances, and their willingness to spend on discretionary items, all three experiencing a rise since the last survey in March.

More than half of Indian consumers are optimistic that job prospects in the country will either be ‘excellent’ 13% or ‘good’ (55%) in the next 12 months. India is the second most optimistic country behind Indonesia (with 69%), when it comes to job prospects over the next twelve months.

Three fourth of Indian consumers are also very optimistic about the state of their personal finances in the next 12 months, 9 percent Indians think that personal finances will be ‘excellent’ and 65 percent think they will be ‘good’. Indians are the most optimistic globally when perceptions about personal finances are concerned in the next twelve months.

A good perception about personal finances and job prospects reflects in the willingness of Indians to spend on discretionary items. 4 percent Indians think that this is an ‘excellent’ time to buy the things they want and need, and 39 percent think that it is a ‘good’ time to buy things. With overall 43 percent votes, India is the third most optimistic country which thinks that it is a good time for making purchases.

“A stable economy has refurbished Indian outlook on the job market and their personal finances. Indians are relaxing their hold on money and are spending more than they were willing to spend in the last eight months,” continued Pant.

The spare cash kitty

Savings still rule the roost for Indians. Nearly six out of ten (66%) Indians put their spare cash into savings. Once the savings are done, Indians like to get their debts cleared. 42 percent said they will pay off debts / credit cards / loans with spare cash. After saving and paying off debt Indians would like to try their hand at the stock market, four out of ten Indians would invest their spare cash in shares of stock / mutual funds (3rd highest globally).

“The age old habit of putting money where it is absolutely safe will not die soon. Indians are risk aversive and like the security of savings over most other forms of investment. Savings has been the number one choice of Indians to put their spare cash for many a round of this survey,” said Pant.

The overall spending of Indians has increased. Other areas where Indians are interested in spending their spare cash are Home improvements / decorating (34%- 5th highest globally), New clothes (33%), New technology products (32%- 6th highest globally), Holidays / vacations (30%), Retirement fund (25%- 2nd highest globally), Out of home entertainment (22%), etc.

The number of people putting their spare cash into home improvements has increased considerably. Spare cash spent on ‘new technology products’ has also gone up by five percent but it has declined in importance for Indians.

Concern amidst confidence

Rising confidence has seen concerns abate a little for Indians. Similar to the last round of the survey Job Security (37%) tops the list of major concerns for Indians in the next six months, followed by The Economy (32%) and Work/ Life balance (21%). Compared to the last round, Work/life balance has seen an increase of 5 percent. Parents' welfare and happiness (17%) is the next major concern for Indians and is also the second highest percentage globally for a country that considers Parents’ welfare and happiness a major concern.

India ranks first on its concern over Terrorism with 14 percent votes. In the last round India ranked second behind Pakistan in its concern over Terrorism. Still it is a relief to note that despite an increase in ranking, Terrorism has decreased in percentage compared to the last round; meaning less people are worried about it today than they were three months back.

Other major concerns for Indians include Health and Increasing food prices (both13%), Global Warming and Children’s education &/or welfare (both 10%), Increasing utility bills (electricity, gas, heating, etc) (9%), Debt (8%), Increasing fuel prices (5%), Crime (4%), War, Political stability, and Tolerance towards different religions (all three 1%).

“Though markets are looking up, Indians still worry about their job and the economy. But as opposed to the earlier round of the survey, consumer concern in India has shifted focus from just surviving through the rough economic patch to other aspects of life, which are more related to their and their loved ones’ well being,” continued Pant.

For further information, please contact:

The Nielsen Company

Biswarup Banerjee

Tel: +91 22 6663 2500