Indian consumers most optimistic: Survey
Posted on May 26, 2011
MUMBAI: India’s consumer confidence has remained consistent over the last five quarters, despite high inflation and rising fuel prices. The country has topped the global consumer confidence level for the fifth straight quarter, according to a global online survey by The Nielsen Company.
Justin Sargent, managing director (consumer), Nielsen India, told reporters here on Tuesday that India’s consumer confidence was driven by strong economic growth and an optimistic job market.
Nielsen conducted its global survey through an online poll of 28,000 people from 51 countries, out of which 500 people were from India.
According to the survey, Indian consumers continue to remain the most optimistic globally, but their confidence levels have not risen from the last quarter of 2010 and remains at 131 index points.
Saudi Arabia jumps up eight notches to come in at second place and Indonesia holds third spot. Seven out of the top ten optimistic countries hailed from Asia Pacific, while European markets dominated nine out of the top ten most pessimistic nations.
The survey said Indian consumers have seen no moderation in inflation during the start of the year, while adding that rising food and fuel prices are likely to alter household expenditures. “If confidence levels among consumers have remained flat over the last quarter, it is largely due to global factors of weaker equity markets, higher commodity prices and overall weaker global recovery, compounded by rising domestic inflation,” said Sargent.
Indians were more concerned about rising food prices than job security, employment prospects or the state of their finances in the first quarter of the 2011 calendar year. However, when it comes to job prospects in the next twelve months, Indians continue to be the most optimistic globally. Indians have maintained their optimism about employment opportunities at 91%, followed by Singapore (76%) and Saudi Arabia (74%) which rank number two and three respectively as nations most optimistic about their job prospects in the next twelve months.
The overall optimism pervading the country finds Indians open to spending a little more than they did in the past two quarters. Of the Indians surveyed, 61% believed that it was a good time to buy the things that they felt they wanted, compared to 56 % in the previous quarter.
The survey noted that consumers are spending their spare cash on new technology products, new clothes and holidays and vacations with these categories seeing significant increase in spends compared to the last quarter. Indians intending to spend on new technology products has gone up from 38% to 44%, while spend on new clothes has risen by 11% points to touch 42% this quarter compared to the previous round of the survey, and spend on holidays and vacations has gone up from 35% in the previous quarter to 40% this quarter.
Indians list savings as a top priority with 65% Indians intending to save spare cash after meeting their essential living expenses. India ranks fourth globally for a country that puts its spare cash into savings, behind Singapore (73%), Indonesia (72%), and Hong Kong (66%).
“And while savings remains central to their money management, they now seem eager to spend on themselves, their families and their homes, while keeping away from making volatile investments related to the stock market,” said Sargent.
The biggest drop on the spare cash spending list this quarter is seen in investing in the stock market or in mutual funds, down 36% from 45% in the previous quarter.
25 May 2011
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