31 July 2009
Consumers’ hopes for an end to the Global Economic Crisis have been bolstered in the 2nd Quarter 2009, according to a Nielsen Global Consumer Confidence Survey released today.
The Nielsen Global Consumer Confidence Index, conducted in 28 markets in June 2009, rose to 82 – an increase of 5 points (from 77) in March - spurred by renewed consumer optimism and stock market gains in BRIC markets (Brazil, Russia, India, China) and key Asian countries. In China, consumer confidence increased 6 points, a climb up the global ladder from 10th to 6th place.
“In the previous Nielsen Global Consumer Confidence survey conducted in March, we were seeing the first signs that, as far as the world’s consumers are concerned, the recession was beginning to bottom out. Three months later, consumers are starting to embrace the idea of recovery,” said Mitch Barns, Greater China President, The Nielsen Company
The Nielsen Global Consumer Confidence Index, the largest survey of its kind, surveyed consumers in 28 countries late in June, including 3,500 consumers in China, to gauge the latest consumer sentiment and confidence along with their spending, saving and investment plans.
“The BRIC and Asian markets have recorded the greatest jumps in Consumer Confidence Indices in the past three months,” noted Barns. “Consumer confidence in India jumped 13 Index points, and climbed 9 points in Japan, South Korea, Hong Kong and Indonesia. Consumer confidence rose 8 points in Taiwan and Brazil, and 7 points in Singapore, Turkey, Russia, Philippines and the UK. The only exceptions to this upswing were in the USA and New Zealand, which held flat in the second quarter, and Germany, the only country to register a decline, of one Index point,” said Barns. “A bit more positive economic news and growing consumer optimism in the past few months have definitely led consumers, especially in BRIC and Asian markets, to believe that economic recovery will come sooner rather than later.”
According to the Nielsen Consumer Confidence Survey, Chinese consumers’ confidence is higher in the East (103) and North (100) regions of China than in the South and West.. In terms of city tiers, confidence is generally higher in the lower tier cities than in the tier 1 and 2 cities (i.e., the mega-cities of Shanghai, Beijing, and Guangzhou along with the provincial capitals). “In this latest survey, we have increased the number of people that we interview so that we can now, for the first time, look at these data by region and by city tier. The results are fascinating and it makes this an even more useful, insightful survey.“
“Chinese consumer confidence appears to have been boosted successfully through the government’s economic stimulus initiatives. Additionally, many consumers in tier 4 and 5 cities appear to have been less affected by the downturn in the first place, so recovery is less of an issue for them…many of those cities are still on the earlier part of the growth curve,” said Barns.
According to the Nielsen Consumer Confidence Survey, the key driver behind Chinese consumers’ confidence is improved job prospects. Half of the Chinese consumers said local job prospects in the next 12 months will be “good” or “excellent”, compared to only 22 percent three months ago. Confidence is especially strong in the North of China and Tier 5 cities, with more than half of consumers from North and Tier 5 cities having a positive outlook of local job prospects in the next 12 months.
“This is one of the strongest indicators of a consensus among consumers that the worst is over, and that finally, there is light at the end of this long tunnel.” added Barns.
The state of Chinese consumers’ personal finances has marginally improved in tandem with job prospects, with nearly half of Chinese consumers (49%) describing their personal finances in the next 12 months as “good” or “excellent”. However, Chinese consumers are slightly more conservative in their expenditure, especially in the west of China. More than four in 10 Chinese consumers (41 percent) described their willingness to spend in the next 12 months as “good” or excellent”, eight percent down from last quarter. Consumers in East China (56 percent) and 1st Tier cities (45 percent) are more positive about spending in the next 12 months. “Consumers in China are still spending but they do seem to be expecting prices to be on the increase over the next 12 months and this is affecting their spending somewhat.”
Across regions and city tiers in China, shopping (62 percent) and savings (54 percent) are consistently what people are doing with their spare cash, but clearly after covering all living expenses and essential living items, Chinese consumers put their children’s education as a priority, with more them four in 10 consumers (42 percent) saying they would use their spare cash for their children’s education.
However, Tier 1 cities’ consumers are more likely to allocate their spare cash to investing on the Stock Market (50 percent) and Holidays (47 percent) compared to consumers in Tier 5 cities, who are more likely to spend their spare cash on their children (22 percent).
Consumers in Tier 2, 3 and 4 cities said they would spend on education for children as well as entertainment.
“China is a dynamic and diverse market. By zooming in on regions and city Tiers to take a closer look at Chinese consumers, we can more clearly see where the opportunities are within China. And there are a lot of opportunities.”
About the Nielsen Global Consumer Confidence Survey
The Nielsen Global Consumer Confidence Survey was conducted between 15 – 29th June and polled 14,029 consumers in Europe, Asia Pacific, North America and the Middle East about their confidence levels and economic outlook. The Nielsen Consumer Confidence Index is developed based on consumers’ confidence in the job market, status of their personal finances and readiness to spend.
About the Nielsen China Consumer Confidence Survey
The Nielsen China Consumer Confidence Survey was conducted in May and polled 3,400 consumers from all city tiers in all 4 geographical regions of China. It is quarterly survey with the same respondents each wave. It is the largest survey of its kind, gauging latest consumer sentiment and confidence, changes in Chinese confidence in the economic outlook and their Concerns, Spending Desires, Saving and Investment plans
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com
Argentina, Australia, Brazil, Canada, China, France, Germany, Hong Kong, India, Indonesia, Italy, Japan, Malaysia, New Zealand Philippines, Poland, Philippines, Russia, South Africa, Singapore, South Korea, Spain, Thailand, Taiwan, Turkey, UAE, Ukraine, UK and USA.
City Tier Definitions: Tier 1 – Shanghai Beijing & Guangzhou; Tier 2 – Provincial Capital Cities; Tier 3 – Prefecture Level Cities; Tier 4 - County Level Cities; Tier 5 – Towns & Villages. Region Definition: North, East, South & West
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