Indian consumers in positive mood

25 February 2010

MUMBAI: The number of Indian consumers who believe global economic conditions will improve in the next six months is more than double the worldwide average, a new study has found.

The Econocurious survey from Lodestar UM, which covered nine major economies, indicated that people living in developing markets tended to be more upbeat about the financial outlook.

In India, 69% of participants expected conditions to improve in the short term, compared with a global figure of 32%.

Contributors in Brazil, Russia and China were similarly more optimistic than their peers in the US, UK, Germany and Australia.

Respondents in Spain, which had seen its GDP contract for seven successive quarters by the end of 2009, displayed surprising levels of positivity, the Interpublic Group agency reported.

Globally, 18 to 34-year-olds were the demographic least willing to make concessions concerning their overall lifestyle, despite the pressures of the downturn.

A majority also agreed that, if they had the choice, they would maintain their expenditure on holidays and travel going forward.

However, responses to the recession differed from nation to nation, with Americans and Germans reducing their spending on magazines, while Britons did the same on newspapers.

The panels in India and Spain, by contrast, had cut back on their internet expenditure, while the samples in Brazil, Russia and Chinese were trimming their outlay on cable TV.

The study also said that online engagement, like discounts and offers pushed by brands' official websites and social networks, was a comparatively strong factor in driving purchase intent in China.

By contrast, Indians generally preferred to talk to their friends offline, or relied on expert opinion broadcast through traditional media channels, before buying.

Shoppers in the Asian economy also demonstrated the strongest intent to save over the next six months, with 66% saying they would deposit the maximum amount possible in cash accounts.

Globally, this view was shared by just 39% of respondents.

Anamika Mehta, chief operating officer at Lodestar UM, added that actual spending intentions varied substantially between the nine countries assessed.

"Investment in big-ticket purchases is seeing continued recovery [globally], despite consumers' 'wait-and-see' mindset," she said.

"Amongst the developed economies, the only real investment is around vacations; while in the BRIC countries, people plan to buy cars, remodel their homes as well as invest in the stock markets, apart from spending on holidays."

Germans, for example, plan to spend more on groceries, drinks and fragrances, while Americans are looking to save money by making bulk purchases or buying products second-hand.

Some 61% of participants in the UK displayed positive intent regarding future purchases, as did 59% of the sample in the US, and 55% in Australia, a trend driven by the "good deals" on offer.

Data sourced from Afaqs/IMF; additional content by Warc staff