Bangkok--14 Jun--Nielsen
THAI CONSUMERS MORE UPBEAT IN Q1 2011
Key findings:
- Thais switching out of savings to invest in stock market/mutual funds and to reduce personal debt
- More than half of Thai consumers continue to cut back on discretionary spending
Thai consumer confidence rose 4 points to hit 106 in the first quarter of this year, reflecting improved sentiments towards job prospects and personal finances, according to the latest Nielsen Global Consumer Confidence Survey.
Nielsen’s quarterly online survey tracks consumer confidence, major concerns, spending intentions, outlook on the economy, etc. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.
Globally, seven out of the top ten most optimistic countries hailed from Asia Pacific, while European markets dominated nine out of the top ten most pessimistic nations. India remained the most optimistic country in the first quarter (131 index points) followed by Saudi Arabia (118) and Indonesia (116).
Optimism over job prospects and personal finances does not translate into looser consumer purse strings
When it comes to their outlook on jobs in the next twelve months, 63 percent of Thai online consumers described their prospects as good/excellent, up 15 percentage points from the previous quarter. With this level of optimism over local job prospects, it is not surprising that Thai consumers are also optimistic about the state of their personal finances in the next twelve months - 63 percent believed that their personal finances will be good or excellent, an improvement of 7 percentage points quarter-on-quarter.
However, consumers are indicating that they are less willing to spend over the next 12 months. 56 percent said the next 12 months would be a bad/not so good time to buy what they want and need, an increase 3 percentage points over Q4 2010. In Q3 2010, this was pegged at 47 percent.
“In Q1 2011, consumer confidence in Thailand was boosted by strong improvements in jobs sentiments and an accompanying ‘feel-good’ factor about personal finances. The pretty picture stops here though, as Thais seem more intent to tighten their purse strings. Lingering concerns over rising food prices may also prompt many to seek value in their daily necessities,” said Aaron Cross, Managing Director, Nielsen Thailand.
“This may prompt retailers to roll out more promotions and innovations to cater to the consumers’ shopping patterns,” Cross continued. An analysis done by Nielsen’s Retail Index services pointed to significant price competition between leading FMCG retailers, as they battle to win over consumers. “While this delivers overall better value to consumers when they shop for every day food, beverage and household product categories, retailers may take a short-term hit on margins”, Cross said.
Thais are cutting back on discretionary spending
More than eight out of ten Thai consumers (84%) changed their spending habits to save on household expenses in Q1 2011, compared to the same period in 2010. In particular, 64 percent said they had reduced spending on out-of-home entertainment (vs. 44% in last quarter), and 52 percent said they spent less on new clothes, up from 47 percent.
49 percent indicated they had cut back on holidays/short breaks (from 33 percent in last quarter).
Switching out of saving into stock market/mutual fund investments and reducing personal debt levels 1 in 6 Thai consumers list Savings as a top use of their spare cash (after covering their essential living expenses). This was a 12-point decline compared to Q4 2010, representing the largest drop across choices of things to do with spare cash. However, Thai consumers still ranked among the top ten in the world in terms of propensity to save spare cash.
On the hand, Nielsen’s survey found significant increases in the usage of spare cash to “Pay off debts/ credit cards and loan” (+5 points from Q4 2010 to 27%) and “Investing in stock and mutual funds” (+8 points to 26%).
Fewer Thais say they are spending their spare cash on holidays and vacations, new technology products and home improvements/ decorating when compared to the previous Quarter.
Concerns over global warming rising fast in importance
The economy continues to be the biggest concern for Thai consumers over the next six months. However, the level of concern has declined - 17 percent of consumers cited this as their biggest concern, down 4 percentage points from last quarter.
Nielsen’s analysis also revealed notable increases in other major concerns among Thai consumers over the coming six months. In particular, 13 percent of consumers now see the impact of “Global warming” as their biggest concern (up 7 percentage points). More consumers are also seeing “Increasing fuel prices” as a top worry (up 3 percentage points)
About the Nielsen Global Online Survey
The Nielsen Global Online Survey was conducted between March 23 and April 12, 2011 and polled more than 28,000 consumers in 51 countries throughout Asia Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ?0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or 10M online population for survey inclusion.
About Nielsen
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related assets. The company has a presence in approximately 100 countries, with headquarters in New York, USA. For more information on The Nielsen Company, visit .
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