Consumer confidence in India is amongst the highest ones across the globe. Consumers in India match their other Asian counterparts in China and Indonesia to lead the list of countries most optimistic about their country's economic performance over the next 12 months. For India's consumer market, this has happened despite a reduction in the percentage of Indians who expect the economy to improve over the next year. "The fact that India's consumer confidence remains significantly higher than the global average is a reflection of its consumer markets' resilience and underlying strength," Sarang Panchal, Executive Director, ACNielsen ORG-MARG India, was quoted in an official statement.
This robust degree of consumer confidence amongst Asian markets like India, China and Indonesia, has contributed to the Asia Pacific region's overwhelming optimism vis-à-vis Europe and the US, claimed leading market research firm ACNielsen.
Conducted over the internet, ACNielsen's Asia Pacific Consumer Confidence Study was expanded this time round to cover 28 markets across Asia Pacific, Europe and the US interviewing 14,134 consumers.
With 77 per cent of Indian consumers expecting their economy to improve going forward, India is at par with China where 78 per cent of consumers expect economic optimism to prevail. "This supports the outlook of global investors and marketers who have pinned their hopes on these economies to provide the growth and momentum needed for an aggressive absorption of products and services. For marketers seeking objective and unbiased indicators for their market planning there can be no better assurance," stated Panchal.
Explaining the downward revision in consumer sentiment within India, Panchal said, "The decline is understandable - factors like the inequitable distribution of rainfall that have caused a reduction in GDP growth estimates have contributed to this tempering of expectations. Combined with increased inflationary pressure that is robbing consumers of their purchasing power, this is bound to have a toll on how consumers view the economic scenario." He further continued, saying: "Despite the impetus that non-food credit and other core sectors like infrastructure are enjoying, consumers take their first cue from immediate symptoms within their daily lives such as the affordability of necessities and utilities."
For the Asia Pacific region as a whole, 40 per cent of consumers think their country's economy improved over the last six months, and 53 per cent expect them to improve further over the next year. Conversely, when asked the same question in the US and Europe, a sizeable 48 per cent of Americans and 40 per cent of Europeans thought their economies had deteriorated over the past six months. However, 43 per cent of Americans remained positive about the year ahead, and were optimistic about their economy to improve, again, while 31per cent of Europeans were of a like mind, 35 per cent apprehended the situation to deteriorate further over the coming year.
However, the study had an interesting angle - it tried to take a look how the spending pattern of spare cash differs in India from the rest of the world. Across the world, during good times and bad, consumers appear to respond differently when it comes to how they spend their spare cash. For Indians, buying new clothes, short local holidays, home improvements and investing in shares and mutual funds seems to be a greater priority than consumers in other parts of Asia Pacific.
Simultaneously, for 50 per cent of Indians saving money is also a priority like most other countries in Asia. "This presents marketers with an interesting mix of consumers. While their above average intention to invest in riskier options indicates a belief in the positive prospects of the local economy, a healthy level of savings also signals a cautious optimism that will serve consumers well if there are temporary reversals in economic conditions" opined Panchal. "The desire to spend more on items like home improvement and clothes also coincides with India's main festive season that precedes the year end."
In Asia Pacific, when asked how they use spare cash once they have covered their living expenses, nearly half said they put it in savings or deposit accounts. The second most mentioned was out-of-home entertainment (32 per cent) followed by paying off credit cards debts or loans (29 per cent).
In the US, however, the top three priorities were reversed, with 33 per cent claiming they were paying off credit cards debts or loans, followed by out of home entertainment (29 per cent), and savings and deposits (23 per cent). This compared to 37 per cent of Europeans spending on out of home entertainment, followed by savings or deposits (34 per cent) and new clothes and home improvements each (33 per cent).
Looking at the countries where consumers have the highest penchant to save money, the top nine were from Asia Pacific, lead by Indonesia (59 per cent), Malaysia (58 per cent) and Thailand (57 per cent), with the Netherlands the only market outside Asia Pacific making it into the top ten.