Shining, but shy

Consumer confidence dips slightly across the world, but Indians are still top of the heap.

It is a damning indictment of brand managers in India. Indian consumers are the most confident in the world; they are convinced that job prospects will improve, their wallets will become fatter and that this is a good time to shop.

So why doesn't that sense of buoyant well-being translate into skyrocketing sales of consumables? Why don't you see serpentine queues outside stores and airline ticket counters? Someone is clearly sleeping on the job "" and it shows.

If India is an opportunity (still) waiting to be seized, the mood across the rest of the world is also optimistic, although there is a distinct lessening of the bring-on-the-bubbly kind of frenzied good cheer that characterised 2006. According to the results of the latest round of the ACNielsen Consumer Confidence and Opinions

Survey "" made available exclusively to the strategist "" consumer confidence dropped in 35 of the 47 countries surveyed. The global and Asia Pacific regional indices are also down two points to 97 and 96, respectively. There's a two-point drop in India's consumer confidence index, too. But at 135, the country still leads the rest of the world "" for the fifth time in a row.

Indian consumers are remarkably upbeat about the coming 12 months. Of the more than 500 Indian Internet users who responded to the survey in late April, 94 per cent are optimistic about local job prospects in the year ahead, while 90 per cent feel the same way about the state of their personal finances "" those are, like in the last round, the highest scores for the Apac region, and among the top three worldwide.

And while there were a few who thought the coming year may be "not-so-good", there were no takers for "bad". A seven-percentage point drop in people believing this is a good time to buy things they want or need means India drops to second place in the Apac ratings in that category, behind Hong Kong (64 per cent). Still, a comfortable majority (61 per cent) has declared its willingness to shop and splurge.

Not that you can tell looking at the top spenders' lists. Indians apparently don't like spending spare cash. The country doesn't figure in the top 10 lists for new clothes, new technology, holidays or entertainment. Instead, any extra cash is squirrelled away in ventures that actually earn them more money: over half the respondents stash away extra funds in bank accounts, while an almost equal number invest in shares and mutual funds.

Compare that with high spenders China and Russia. Consumer confidence in China took a beating this year, with the index dropping seven points to 99, but frequent breaks are still a priority "" 53 per cent of the respondents prefer spending spare cash on holidays. The Chinese are also ahead when it comes to dabbling in the stockmarket, updating their wardrobes and their gizmo-gadgets collections.

But when it comes to having a good time, you can't beat the Russians (index down three points to 104) "" 71 per cent spend on new clothes, 53 per cent on out-of-home entertainment, 44 per cent on new technology and 40 per cent on home improvements and decoration.

Who's spending, who's sulking
The ACNielsen survey is the largest bi-annual study of its kind. The April round was conducted with over 26,000 respondents from 47 countries, including 14 from the Apac region (the last round covered 25,000 people from 45 nations).

The Indian optimism appears to extend across Apac "" six of the 10 most confident countries are from the region. You will also find the highest climb in consumer confidence "" and the sharpest drop "" here: Hong Kong clambered seven points to 118, while Thailand plunged 15 to 92.

As in previous rounds, Norway and Denmark hold firm to their positions of second and third most-optimistic nations, although the general softening in confidence is apparent here as well: the scores of 132 and 127 are two points below last time's.

If there are no major changes at the top of the list, the bottom, too, remains much the same. Europe has maintained its stranglehold on the bottom of the list: the region's index of 90 is the lowest and well below the global score of 97.

Six of the most pessimistic nations are from Europe "" Greece, France, Germany, Turkey, Hungary and Portugal all score below the global and regional averages for consumer confidence (in all, 19 nations had confidence scores lower than the global index).

And even as the rest of the world go into raptures over potential of East Asian economies, South Koreans are gloomier than ever "" the most down in the mouth worldwide, in fact.

The country's confidence index has fallen six points to 50, with 91 per cent believing that job prospects in the coming year will range from not-so-good to downright bad, and 88 per cent turning pale at the thought of shopping.

Surprisingly, those aren't the worst figures: while Portugal is more glum about job prospects and spending (95 and 88 per cent, respectively), the Japanese outdo the Koreans when it comes to negativity about personal finances (84 versus 83 per cent).

In the face of such less-than-cheerful consumers, it is hard to believe that the rest of the region, or indeed the world, could be optimistic about the future. But, in fact, they don't do too shabbily.

While half the region thinks job prospects will improve, 54 per cent feel the same way about their personal finances. Not too many people are enthused about shopping, though: 39 per cent, compared to 41 per cent in the last round. That is, more or less, the trend for the rest of the world as well.

The exception is North America where improvement in consumer confidence has meant a two-point increase in the index, to 110. That upturn is visible in consumers' attitudes as well: North Americans are the most optimistic about their job prospects, money situation and spending.

Those figures don't tie in too well with a slow American economy and its rub-off on Canada, high gas prices, a weak real estate market and rising inventories. Perhaps consumers in the region believe there's now no way to go but up.

Anxiety attacks
Meanwhile, what is giving the rest of the world sleepless nights? Oh, the usual. The biggest cause of concern is the economy (52 per cent), followed by health (45 per cent) and job security (35 per cent). Apac worries about the same things, although for once, it appears to fret a little less: 41, 37 and 30 per cent, respectively.

Indians, too, fret over the same things: 46 per cent cite the economy as a major concern over the next six months, while health is top priority with a third of the respondents. Anxiety over job security is down across the region and in India, too: just 19 per cent. Of course, considering that only 6 per cent were pessimistic about job prospects in the coming year, that's way too high.

With 31 per cent in the last round, India was a champion worrier about terrorism just six months ago "" now, its 16 per cent doesn't even merit an honourable mention. In fact, this time, India doesn't figure among the top 10 countries worried about any issue, although there have been huge jumps in concern over some matters.

There's a 19 percentage point increase, for instance, in alarm over the economy "" why, for goodness sake: isn't 9 per cent GDP growth good enough? "" and an 11-point surge in concerns over global warming.

But those aren't even blips on the global or regional radar: India is at the other end of the spectrum, coming in at seventh place (with 16 per cent) among countries that have no worries at all. Of course, that's still far behind Denmark: one in three Danes says he has no major concerns.

Spare cash spends
How do consumers across the world spend their spare cash? More than half the people polled let the money idle in their banks, a third pay off their debts and credit card outstandings, while one in five consumers dabbles in the stockmarket.

Those may be sensible options, but there's no denying they are dull "" and bad news for brand managers. So it is comforting to note that having fun is high on the agenda for a significant proportion. Over a third head for the nearest holiday hotspot, while equal numbers use their extra money to update their wardrobes and live it up with their friends.

Investing in new technology finds favour with a quarter of those polled worldwide, while roughly the same number spend their spare cash "" and spare time, presumably "" on doing up their homes. With some slight variations in the numbers, those trends hold true for the Apac region as well.

There are some mixed signals, too, in the survey. The eastern Europe, Middle East and Africa (EEMEA) region is the most pessimistic "" 54 per cent believe job prospects will be bad in the coming year; 48 per cent think their financial situation will deteriorate; and 66 per cent think this is the worst time to shop.

Those ratios are far below the global averages. But when it comes to spending options, EEMEA is ahead of the queue. The region leads the world in shopping for new clothes (55 per cent), new technology (38 per cent) and in spending on out-of-home entertainment. Perhaps this is an evolved form of retail therapy.

How it was done

The Global Consumer Confidence Index conducted by The Nielsen Company covers Internet users around the world every six months, representing a global online population of about 1 billion consumers.

The survey has been gaining traction since it was launched as an Asia Pacific initiative about five years ago, before "going global" at the end of 2004. The latest survey, conducted in April, polled over 26,486 Net users in 47 markets.

The survey was conducted online across Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China, the Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, Italy, Japan, Korea, Latvia, Lithuania, Malaysia, Mexico, the Netherlands, New Zealand, Norway, the Philippines, Poland, Portugal, Russia, Thailand, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Turkey, the UAE, the UK, the US and Vietnam. from Europe, Asia Pacific, North America and West Asia.

In the Asia Pacific region, the countries surveyed are: Australia, China, New Zealand, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, Singapore, Thailand, Taiwan, Vietnam and the Philippines. About 500 people were interviewed in each country.

Three questions are used to calculate the consumer confidence index. They relate to job prospects in the next 12 months; the state of the respondent's personal finances in the next 12 months; and, based on the cost of things and the respondent's personal finances, whether or not it is a good time to buy things he wants and needs.

The scale of answers to all three questions are: Excellent, Good, Not so good and Bad. To calculate the index, each response was given values: Excellent (200), Good (133.3), Not so good (66.6) and Bad (0). Using these values, the average of the three questions was taken for each respondent. The index for each country was calculated by taking the index average for each respondent in that country. An index value of 100 corresponds to an average halfway between "Good" and "Not so good".