Bangkok--13 May--Nielsen
Global consumer confidence in the first quarter of 2010 rebounded to reach its highest level since the third quarter of 2007, providing a definitive sign that the world is continuing to recover from the economic crisis, according to the latest edition of the Nielsen Global Consumer Confidence Index.
Globally, consumers started to spend again as they drove the global index up six index points from 86 in Q3 2009 to 92 points in Q1 of 2010. The world’s consumer confidence rose in 41 of the 55 countries surveyed during the quarter, with India (127 index points), Indonesia (116) and Norway (115) remaining the world’s most confident nations. Meanwhile, Lithuania (46), Croatia (48), and Portugal (51) were the most pessimistic nations. Taiwan (+14 pts), Singapore (+11), Israel (+10), Mexico (+10) and Colombia (+9) were among the highest increases in consumer confidence in Q1, while Greece (-15), in the midst of a financial collapse, recorded the steepest decline.
In Thailand, consumer confidence hit an all time low of 81 index points in early 2009, following the collapse of the international financial system, before steadily increasing again last year. In the first quarter of 2010, Thai Consumer Confidence remained relatively stable (95%) with a 1 point increase compared to six months ago. The Thailand Qtr 1 2010 survey was undertaken from March 8 to 26, just prior to the political unrest in Bangkok escalating.
Thais were pessimistic over local job prospects
56 percent of Thai consumers believe that job prospects over the next 12 months will be “not so good” or “bad” and 40 percent of them are not confident with the state of their personal finances over the next year. Their thoughts and feelings on job prospects and personal finances were about the same from the previous survey in the past six months.
Globally the Asia Pacific region posted the highest confidence increase of all regions (+8) due in part to big jumps in Taiwan (+14) and Singapore (+11). Asian consumers cut back drastically on all aspects of discretionary spending 18 months ago, but have now indicated they plan to increase spending on out-of-home entertainment, new technology, holidays and new clothes compared to six months ago.
How do Thais utilize spare cash?
Thailand ranked second in the Asia Pacific region with 72 percent of consumers indicating they will put their spare cash into savings after covering necessary living expenses - up from 57 percent in the past six months. 59 percent of them believe that it is now “not so good” or a “bad” time to buy things they want over the next 12 months
After savings, holidays/vacations (45%), buying new technology products (26%) and investing in shares /mutual funds (25%) were the three most popular spending options.
Spending Intention
According to Nielsen’s survey on consumer behavior, Thai consumers will cut back on the following expenses:
Try to save on gas and electricity (60%)Cut spending on new clothes (58%)Cut down on out of home entertainment (53%)Cut down on telephone expenses (44%) (Table3 )
Major Concerns over the next 6 months
As expected, the current political uncertainty is the biggest concern for Thai consumers in the next six months (39%), followed by economy (36%) and job security (16%). Interestingly, the report also found Thai consumers concern about Global Warming has increased - up from 9 percent in the last six months to 15 percent this survey.
Aaron Cross, Managing Director of Nielsen Thailand said “people in Thailand are still holding back from spending - resulting in a big jump in the number of savers in our Qtr 1 survey”.
Mr. Cross added that consumers are still spending on necessity household products. “Overall the FMCG industry continues to achieve strong overall growth. In the first quarter of 2010, our Nielsen data indicated that FMCG sales grew by 6.1% in value and 1.7% in volume terms compared to Q1 2009”.
“Among the world’s cautious markets, many of the habits developed during the economic crisis continue. Price sensitivity, a move to private labels and regular promotions are still top-of-mind to the value conscious consumer”.
Remark: The Qtr 1 2010 Consumer Confidence Survey was conducted in Thailand from March 8 to March 26 in the midst of anti-government protest in Bangkok. We expect less optimistic results for Thailand in Qtr 2 2010 given the violet clashes that have occurred since April 10 and the ongoing political uncertainty.
About the Nielsen Global Consumer Confidence Survey
The Nielsen Global Consumer Confidence Survey was conducted between March 8 and March 26, 2010 and polled over 27,000 consumers in 55 countries throughout Asia Pacific, Europe, Latin America, the Middle East and North America about their confidence levels and economic outlook. The Nielsen Consumer Confidence Index is developed based on consumers’ confidence in the job market, status of their personal finances and readiness to spend. 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%.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications. The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com