Financial Times

New study shows Asians as top global consumers
Asian consumers are currently riding a wave of economic confidence with Indians and Chinese heading the list of the world’s most optimistic consumers, a new global consumer survey shows.

Europeans remain in the doldrums while North Americans maintain a steady but cautious outlook. Consumers globally are keeping a tight hold on their personal finances, with discretionary spending habits restrained in most parts of the world.

Asian consumers are clearly the world’s most optimistic at the moment, while the vast majority of Europeans and Americans remain firmly in the doldrums, according to the latest global online consumer confidence survey from ACNielsen. Sri Lanka was not among the countries surveyed.

Asia’s buoyant outlook is being driven by the emerging consumer powerhouses of China and India, the two largest and fastest growing consumer markets in the world today – while some of Europe’s largest economies of France, Germany and Italy are struggling with negative (or flat) growth, increasing unemployment and pockets of political instability.

The ACNielsen Online Consumer Confidence Survey, the largest global survey of its kind, is conducted twice-yearly to gauge consumers’ confidence levels, spending habits and intentions and current major concerns. The latest round of the survey, which was conducted in May 2005 polled over 21,100 respondents in 38 markets from Europe, Asia Pacific, North America, Latin America and Emerging Markets. Looking back over the last six months, the Asia Pacific region (41%) was the most optimistic, while less than one fifth of consumers in Europe and North America believe their local economies to have improved in the first half of the year. Across the world, people in India (79%), Hong Kong (75%) and China (70%) were the most upbeat the world over.
Perceptions of local economic performance over the last six months: top 10 ‘improved’

“Socially and economically, China and India are still developing at a galloping rate when compared to the rest of the world. With economic growth rates of over eight percent per annum, Chinese and Indian consumers have greater spending power today than they have had at any time in recent history,” said Bienvenido Niles, Regional President, ACNielsen Asia Pacific.

In stark contrast, most European consumers are dwelling on whether their economies could possibly get any worse – and recovery for most is still a long way off. In a global top 10 ranking of the world’s most pessimistic nations, European nations accounted for seven of them.

Over the last six months, the majority of Indians, Hong Kongers and Chinese think their economies have improved, the survey showed . At the other end of the scale, people in Pacific and Taiwan appeared to be the most pessimistic, with more than one third bracing themselves for a tougher time ahead and further deterioration in their economy. Looking ahead to the next 12 months, India, China and Hong Kong ranked among the world’s top three most optimistic.

Not surprisingly, the same three markets also drive confidence levels across Asia Pacific, with at least 88 percent of Indians (up 11 points from the previous survey), 80 percent of mainland Chinese (up two points) and 71 percent of Hong Kong consumers (up three points) confident of an even brighter future in the year ahead.

Job prospects
As far as attitudes to local job prospects are concerned, Asia Pacific consumers are the most confident of all regions surveyed, with 57 percent believing prospects to be good or excellent. In North America, where economic growth surpassed expectations in the first quarter, half of respondents believed their job prospects for the next 12 months to be ‘good’ while in contrast, job prospects for European consumers remain bleak. Back in Asia Pacific, Indians (88%), New Zealanders (85%) and Hong Kong (75%) consumers ranked as the world’s top three most optimistic about their job prospects in the next 12 months.

The Indians and Kiwis are the most positive about local job prospects “Consumers in Asia Pacific appear to be optimistic on almost all fronts. Aside from being bullish about their job prospects, 57 percent were also positive about their personal finances, albeit globally they ranked third relative to their Latin American and North American counterparts,” Niles added. Indian consumers (85%), mainland Chinese (70%) and New Zealanders (73%) were most positive about the health of their personal finances in the next 12 months, compared to a regional average of 57%.

The Indians and Kiwis are also the most positive about their personal finances. Considering the cost of things today and their own personal finances, consumers were asked if they considered now to be a good time to buy the things they needed. And although over half the world’s consumers described their state of personal finances as ‘good’, they also said – conversely - that now was not the time to be spending.

Once again, consumers in Asia Pacific (39%) stood out from their global counterparts as far as their intention to spend, lead by Indians (66%), New Zealanders (59%), HongKongers (50%) and Australians (49%).
Two thirds of Indians think now is a good time to buy things they need, along with over half of Kiwis and Hong Kongers.

Spending intentions
When it comes down to how consumers spend their spare cash - after basic living expenses have been accounted for - distinct regional spending patterns emerged.

Around the globe, over one third (36%) of the world’s consumers put their spare cash into Savings, followed by Out of Home Entertainment, Holidays /Vacations and New Clothes.

Asians remain the world’s super savers with 51% of consumers putting any spare cash away for a rainy day, with Filipinos (63%) the biggest savers of all. Across the region, mainland Chinese consumers were simply unbeatable when it came to shopping and formed the biggest fans of Out of Home Entertainment (50%), New Clothes (44%) and New Technology (41%). Given the timing of the survey in the lead up to a northern European summer, many Europeans have turned their minds to summer holidays, with over one third of them (35%) putting spare cash into upcoming vacations, more than any other region.

“It is interesting to note that in North America, a quarter of consumers said they simply had no spare cash at all after paying basic living expenses,” Niles said. “As did Koreans, with a fifth claimed they had no spare cash. It also explains why Koreans ranked among bottom for all types of spending.” Besides Koreans, the most cautious spenders in the world today were the Greeks and Portuguese.

Major Concerns
When asked about their major concerns over the next 12 months, globally, 45 percent of consumers’ cited the Economy as their major concern followed by Health (37%) and Job Security (36%). “While any change in the Economy is consistently close to consumers’ heart, we have seen the level of concern in Asia Pacific starting to stabilise since early 2004,” said Niles.

“Instead, we have seen a slight increase in concern about Health and Job Security.” Over 60 percent of people in Indonesia, the Philippines and Thailand were most concerned about the Economy. The second major concern for people in Asia Pacific was Job Security (39%) with China, in particular, recording a significant increase in people concerned about their jobs (56% vs. 47% in Oct 2004).

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