Indian consumer confidence dropped in the first quarter of 2013 to become the second after Indonesia due to the “environment around them”, according to a survey by market insights and information provider Nielsen.
According to the survey, Indian consumer confidence index dropped by one point to 120 in the first quarter of 2013 after topping the global list at 121 in fourth quarter of 2012.
“The last year has seen shifting sentiment on confidence, where consumers are feeling good about themselves, but not the environment around them,” Nielsen India President Piyush Mathur said in a statement.
He said the finding highlighted a contradictory nature of the urban Indian consumer.
“On one hand (Indian consumers are) cautious about the state of the economy, and middling company performance, but at the same time (they are) indicating a higher discretionary spending for the year,” Mr. Mathur added.
Indonesia led the global index in the first quarter of the year, measuring at 122, up five positions from the fourth quarter of 2012.
Philippines and Thailand were ranked third and fourth in the latest list, with 118 and 116 points, respectively.
Brazil came fifth in the list, holding on to its previous position.
As per the survey, 60 per cent of respondents in India indicated they would put spare cash into savings, up six per cent from last quarter.
Forty-two per cent said they would invest in new technology and products, up from thirty nine per cent last quarter, while 41 per cent reported they would spend spare cash on new clothes, a five point increase, it added.
“Consumers are looking to relax their budgets over the next few months and indulge themselves in updating their homes, taking vacations and enjoying entertainment,” Mr. Mathur said.
At the same time, building up savings for the future with the retirement and mutual funds is a healthy indication of how Indian consumers are viewing this year, he added.
Further, in Q1 2013, 73 per cent indicated optimism about their job prospects in the next 12 months, three percentage points below 76 per cent in Q4 2012.
More than one in five respondents indicated job security as the biggest concern, up three points from Q4 2013. The state of the economy is the biggest concern for 12 per cent of respondents, as per the survey.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions measures consumer confidence, major concerns, and spending intentions among more than 29,000 respondents with Internet access in 58 countries.