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9 June 2005
Hong Kong
Asian consumers are clearly the world’s most optimistic while the vast majority of Europeans and Americans remain firmly in the doldrums, according to the latest global online consumer confidence survey from ACNielsen.
The ACNielsen Online Consumer Confidence Survey, the largest twice-yearly global survey of its kind, is aimed to gauge consumers’ current confidence levels, spending habits/intentions and current major concerns. The survey, which took place 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%) and South Africa (64%) were the most optimistic, while less than one fifth of consumers in Europe and North America respectively believed their local economies improved in the first half of the year. Among all, people in India (79%), Hong Kong (75%) and China (70%) were feeling the most upbeat the world over.
“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 Vietnam. “In Hong Kong, the economy has started to recover from years of downturn and is fast picking up with its renowned competitive advantage as one of the most free economies and world financial centers.”
In stark contrast, most European consumers are dwelling on whether their economies could possibly get any worse – and recovery for most people is still far off. In a global top ten ranking of the world’s most pessimistic nations, European nations accounted for seven.
Looking ahead into the next 12 months, Asia Pacific (48%) and South Africa (60%) had the most optimistic inhabitants. Leading the world as the most upbeat are the emerging consumer powerhouses of India and China, the two largest and fastest growing consumer markets in the world today, which are also driving Asia Pacific’s confident outlook, with at least 80 percent of their people confident of an even brighter future in the year ahead. Hong Kong was among the world’s top three most optimistic markets, with 71 percent of people perceiving a continued improvement in the local economy going forward.
On the other end of the scale, people in Pacific and Taiwan were the most pessimistic, with more than a third bracing themselves for a tougher time ahead and further deterioration in their economies.
Job Prospects/Personal Finances for the Next 12 Months
Asia Pacific leads the way in terms of confidence in local job opportunities, with 57 percent of consumers believing prospects to be good/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 in Europe remains bleak.
Back in Asia Pacific, Indians (88%), New Zealanders (85%) and Hong Kong consumers (75%) in particular were the most optimistic about the local job prospects.
It’s another story, however, when things get personal. Despite being optimistic on almost all fronts, consumers in Asia Pacific were less so when it comes down to the state of their own finances over the next 12 months. Only 57 percent were positive about their personal finances compared with 71 percent in South Africa, 65 percent in Latin American and 61 percent in North America. At an individual market level, confidence levels in India (85%) and New Zealand (73%) prevailed, while China (70%) overtook Hong Kong (57%) to become the region’s top three consumer markets most optimistic about their personal finances in the year ahead.
Similarly, while over half the world’s consumers described their state of personal finances as ‘good’, they also said that now is NOT the time to spend money on things they wanted to buy.
“Globally, consumers remain cautious about economic volatility and seem quite prepared for a sudden change in circumstances. Right now, they are reluctant to go on any major spending sprees,” Mr Niles continued.
The global exceptions were the Norwegians and Turkish (8%), who believed that now is an ‘excellent’ time to buy the things they want.
Spending Intentions
When it comes to how we spend our spare cash (after basic living expenses are accounted for) distinct regional spending patterns emerged.
On a global basis, 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.
At the time of the survey in early May, many Europeans were already looking forward to their summer holidays, with over one third of consumers (35%) putting spare cash into upcoming vacations, more than any other region. The region also led the world in terms of shopping for new clothes (32%) – perhaps for their impending holidays! South Africans stand out as the world’s biggest spenders on Out of Home Entertainment (41%).
Asians remain the world’s super savers with 51% of consumers putting any spare cash away for a rainy day, with Filipinos topping the list (63%). With Thai New Year recently passed at the time of the survey, Thai consumers’ holiday appetite remained strong, with 56 percent choosing to spend their spare cash on Holidays/Vacation. And mainland Chinese consumers were simply unbeatable when it came to shopping and formed the biggest group of fans in the region for Out of Home Entertainment (50%), New Clothes (44%) and New Technology (41%). Relative to the rest of the region, Indians were more in to improving their living environment with nearly a third spending their spare cash on Home Improvements/Decorating.
“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,” added Mr Niles. “As did Koreans, with a fifth claimed they had no spare cash. It also explains why Koreans ranked among the bottom for all types of spending.”
Besides Koreans, the most cautious spenders in the world today were the Greeks and Portuguese.
Based on the three dimensions of ‘Job Prospects’, ‘Personal Finances’ and ‘Spending Desires’, ACNielsen has established a Global Consumer Confidence Index designed to compare confidence levels across all markets in the survey. At the top of the Index was India, with a score of 127, followed by New Zealand with 119 and Ireland with 113. At the very bottom of the scale is Korea, scoring an index of 58. The global average score was 92.
Major Fears and Concerns
Globally, consumers’ ranked their major concerns as the Economy (45%), Health (37%) and Job Security (36%)
“The biggest concern for Asians, Europeans and North Americans is the Economy, while Job Security topped the most concerned list for Latin Americans and one third of South Africans cited Crime as their main concern,” said Mr Niles.
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).
Health (35%) was a major concern among 55 percent of people in China and showed a significant increase in New Zealand, making NZ the second most concerned nation about health in this round of the survey. Korea (45%), Singapore (33%) and Indonesia (23%) also saw a double-digit increase in people’s concern about their health.
“With ageing populations and a trend for governments to cut back on healthcare, the public are becoming very anxious about their health in many countries,” said Mr Niles. “Pressure is on governments to increase and upgrade public healthcare and facilities, and healthcare will become an even bigger and more serious concern for consumers in the future.”
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