Indian consumers on top as others lose confidence

Improbable as it may appear, but the Indian consumer, an A C Nielsen online survey covering 58 markets and 29,000 consumers suggests, is the most optimistic globally.

Improbable because the global gloom-doom talk, lower-than-expected salary hikes and persistent inflation have had savaged the consumer sentiment in India.

This was reflected in a BluFin survey done as recently as early this month. Consumer confidence in India, the BluFin survey showed, is at its lowest level in 2012. Another survey, by Assocham, pointed out that low confidence will keep consumers from spending in the festive season.

So what explains the seemingly pleasant Nielsen survey news?
Experts explain that India fares better not because Indian consumers are a very optimistic lot but because consumers in other countries are way more pessimistic. Amitabh Mall, partner and director of the Boston Consulting Group, says consumer outlook in most countries is gloomier. “On a standalone basis, Indian consumers are not as bullish as they used to be. But the situation is definitely worse in other nations.”

A closer look at the Nielsen Global Consumer Confidence Index (NGCCI), currently at 92 points, reveals as much. Last quarter, Indonesia with 120 points led India (119). This (July-September) quarter, consumers in Indonesia lost some confidence and slipped by one point, levelling with India where there has been no change for two consecutive quarters. A score of over 100 signals optimism; all else pessimism.

Another expert says conditions in India are unlikely to improve dramatically any time soon.

Some 62% of global consumers polled believe their national economies are in recession. Half of them expect the recession to last for another year.

And 69% of respondents also said that they were changing their spending habits in this economic scenario to ensure that they save more.

Venkatesh Bala, chief economist at the Cambridge Group, a part of Nielsen, said further policy action is needed to boost global consumer confidence.

“Much depends upon policymakers in the US, Europe and Asia to ensure healthy growth and lower unemployment as we move into 2013. Support for the weaker economies in Europe and eliminating the threat of combined tax increases and federal spending cuts in the US are critical. Emerging economies like China and India need to also shift more toward domestic consumption and industrial liberalisation.”
(With inputs from Reuters)