Consumer views mixed in China, India

10 July 2009

NEW DEHLI: Consumers in China are largely unconcerned about the economic downturn, and while their Indian counterparts are displaying a greater degree of anxiety, they are also confident about the prospects for a recovery, new research from JWT reports.

According to the agency network's latest Anxiety Index study, only 35% of consumers in China could be classed as being "anxious".

This trend is most prevalent among those on lower incomes, largely as a result of growing levels of unemployment following a slowdown in exports.

However, the area that is of most concern in the world's most populous nation is food safety, following on from a high-profile milk scare in the country late last year.

Despite this, JWT's study said that "even though China's anxiety is low compared to other countries around the globe, consumers are still taking measures to cut back spending."

This is partly because shoppers in the country – and in the region more broadly – "are known for their cautious spending and high savings rates."

As such, many Chinese are now "buying less frequently or cancelling or postponing purchases", and are also "seeking cheaper alternatives for less important consumables."

By contrast with China, some three-quarters of Indians are currently displaying high levels of "stress", meaning they are "extremely anxious compared to other countries around the globe."

However, this generally relates more to matters of personal safety and security after the terror attacks in Mumbai in November 2008 than the financial situation.

Indeed, JWT says that while some Indians are "cutting back or waiting for promotions" on products such as branded apparel, "behavior appears to be largely unchanged in regards to purchase of everyday items like rice and shampoo."

Almost 20% of consumers in the country have also recently purchased a new, more expensive mobile phone, although a further 30% are tying to cut down on the amount they use these devices to save money.

Overall, "brands shouldn't be slashing prices since consumer behavior has not drastically changed in most categories," JWT says.

Another area of burgeoning interest in the country is in social issues, and brands championing CSR initiatives, such as Unilever's Lifebuoy soap and Tata Tea, stand to benefit as a result.

Data sourced from JWT; additional content by WARC staff