Consumer confidence falls first time in 9 qtrs: Nielsen

Consumer confidence in India declined  four points to 119 in the second quarter 2012, leading to India's fall to the second position in Consumer Confidence Index of Nielsen. The levels of optimism this quarter were seven points lower than the second quarter in 2011, where India was leading the global sentiment at 126 points. This quarter, India is the second most optimistic country while Indonesia leads the index globally.

"The drop from the top position for India, after nine quarters, indicates a growing anxiousness amongst Indian consumers today, in relation to the job prospects and spending habits," said Piyush Mathur, president, Nielsen India Region. “Rising inflation and fuel prices, which are a direct hit on the consumer’s wallet, combined with a comparatively low GDP growth and devaluation of the rupee has taken a toll on consumer confidence. Despite the slowdown though, the nominal growth rates are still the envy of the developing world, given the size and scale of the market.”

 

According to the Nielsen survey, the consumer confidence in second quarter 2012 declined in 26 of 56 markets, increased in 23 and remained flat in seven.

The survey showed that job security (21%) and state of the economy (12%) continued to be the biggest concerns for Indian respondents. The well-being of parents (9%), and increasing fuel prices (8%) were two other concern areas. However, globally Indian online consumers, followed by online consumers in Philippines, and Malaysia are the most optimistic about their job prospects in the next twelve months.

Over half (53%) of the online respondents said they believe India is going through an economic recession this quarter.  Results this quarter show a two percentage point increase over Q1 2012 and Q4 2011, and more than a ten percentage point increase over sentiment for the same period last year (41% in Q2 2011).

The survey also says that intended discretionary spending and saving decreased globally in Q2 across all sectors reviewed. In India, although confidence levels have declined, over three in five (62%) online respondents said they will put spare cash in savings; 38% will utilize spare cash into new technology products, while 36% will use it for their vacations. This quarter over three in ten (32%) respondents indicated they will invest in shares and mutual funds as against 25% last in the last quarter (Q1 2012).

The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted in the month of May, this year and polled more than 28,000 online consumers in 56 countries throughout Asia Pacific, Europe, Latin America, West Asia, Africa and North America. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country.