BackIndia continues to lead global Consumer Confidence Index
Consumer confidence in urban India rose to a score of 129 in December quarter, a three-point increase over the preceding three months
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Mumbai: India led the global Consumer Confidence Index in the quarter ended 31 December, followed by Indonesia and the Philippines, market researcher Nielsen found through an online survey.
Consumer confidence in urban India rose to 129 in the December quarter, a three-point rise over the preceding three months, and a 14-point increase from the year-earlier period.
This was the third quarter in a row that India led the index.
In the latest online survey, conducted 10-28 November, over four in five (82%) urban Indian respondents indicated the highest level of optimism globally on job prospects in the next 12 months, followed by Indonesia (73%) and the Philippines (73%). In the same quarter a year ago, 70% in India were optimistic about their job prospects.
“The urban online consumer in India ended the year far more optimistically as compared to last year, and even the preceding quarter and ends on an encouraging note," said Piyush Mathur, president, Nielsen India region. “The increased consumer sentiment is also aided by lower inflation rates and the positive economic environment and development initiatives led by the new government that have been instrumental in driving the India growth story," Mathur said.
The increase in confidence is seen across sectors, according to Mathur, with the packaged consumer goods sector poised to grow in double digits in 2015 after a gap of two years. In 2014, the consumer packaged goods sector grew at 7% in value terms with a flat volume growth of around 1%.
Earlier this month, India’s largest consumer goods maker Hindustan Unilever Ltd reported a 7.69% increase in sales for the three months ended December, with a 3% volume growth as consumers continued to hold back on their small and discretionary spends.
All the same, Sanjiv Mehta, chief executive officer (CEO), Hindustan Unilever was hopeful of future growth and said the worst is over. “In the last 12 weeks, volumes have picked up in categories such as home care and beverages, and across rural and general trade," said Mehta after the earnings announcement. But, he added, there are still many parts of the market that are shrinking: urban, modern trade, large packs and skin cleansing products.
Likewise for retailers, January and the ongoing end-of-season sales have been better than Diwali season. “January has been very good after a bad festive season. We feel that we will achieve our growth targets for this year and see good growth next year as well," said Harikat Singh, managing director, Aero Group which retails Woodland shoes and apparel, adding growth is also coming from Tier II and Tier III cities where the company is adding stores.
Dipak Agarwal, CEO, DLF Brands which retails brands like Mango, Mothercare and Boggi affirms, “End-of-season sales was better than the last one. The improved consumer sentiments has helped and we believe we can now maintain this growth rate in the coming year."
Sales of passenger, two-wheelers, three- wheelers and commercial vehicles have also registered a 12.39% growth in November over the year-ago corresponding period, said Society of Indian Automobile Manufacturers in a December 9 report on its website.
The survey noted that three in five (61%) online respondents in India signalled it’s a good time to buy things they want and need, a 2 percentage point rise from the preceding quarter. From the same period last year, those saying it’s a good time to buy things has gone up by 12 percentage points. When it comes to investing spare cash, 62% indicated it is a good time. Half (50%) of the respondents polled are purchasing new technology products, up 11% from the year-ago quarter. The purchase intent for new clothes by urban online respondents here has risen by seven percentage points to 44% last quarter from 37% a year ago.
However, a few dark clouds remain. The lower rabi crop expected this year could mean that the cooling inflation may not be sustained as food prices could go up this summer.
While a section of consumers has started spending, an equal number is still in the wait-and-watch mode. “The sentiments are high and consumers are feeling the recovery is there and they want to spend. However, there is an equal half that is waiting for the money to come in the hand before they spend. They are still in the wait-and-watch mode," said Mathur, adding the results reflect an outlook of cautious optimism.
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