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23 April 2009
Taipei
Global consumer confidence has plummeted to a record new low in the past six months, falling seven Index points down from 84 to 77 according to the latest twice-yearly Nielsen Global Consumer Confidence Index which tracks consumer confidence, major concerns and spending habits among 25,140 internet users in 50 countries.
The latest Nielsen Global Consumer Confidence Survey, conducted 19 March – 2 April 2009, found that the emerging markets of Russia, UAE, and Brazil suffered the biggest falls in consumer confidence over the past six months as currency devaluation, weakening export markets and falling global commodity prices took their toll. “While consumer confidence in Europe and developed markets tumbled dramatically between May and October 2008, in recent months the emerging markets of Russia and Latin America have been hit hardest,” said Jennifer Wang, Managing Director, The Nielsen Company Taiwan Ltd.
Consumer confidence plummeted by 29 Index points in Russia (down to 75 points from 104 in September 2008), marking the biggest fall in consumer confidence tracked by Nielsen globally. Consumer confidence in key emerging markets of UAE and Brazil both fell by 21 points.
Regionally, Latin America suffered the biggest consumer confidence hit, falling 15 Index points (down to 82 points from 97) while consumer confidence in Europe and Asia Pacific both fell by seven Index points.
Indonesia topped Nielsen’s Global Consumer Confidence Index at 104 points, followed by Denmark (102 points) and India (99 points). The world’s most pessimistic nations in the Nielsen Index are Korea (31 points), followed by Portugal and Latvia at 48 Index points. Confidence fell in 49 out of 50 countries – Taiwan was the only country to buck the global trend, edging up three Index points from 60 to 63, although still 14 points below the global average.
“Global consumers have been battered and bruised by a constant onslaught of bad news in the last six months,” said Jennifer. “Daily announcements of job cuts and company profit warnings, bankruptcies and foreclosures, lowered GDP expectations and depressed manufacturing and production forecasts have combined to reduced consumer confidence and spending power to their lowest levels in post-war years.”
In the last six month, consumer confidence in the regions of Middle East/Africa and North America both declined by two and three index points respectively. However, no significant further decline in North American consumer confidence may signal the first cautious signs of hope that the recession is finally bottoming out.
“The results we are seeing in the latest Nielsen Consumer Confidence Index indicate that we may be at, or at least very near, a bottom in this economic cycle. Specifically in the United States, while clearly adjusting their spending and savings with 40 percent stating they are paying off debts and putting into savings, American consumers are increasingly optimistic about a light at the end of the tunnel, with close to 20 percent seeing a recovery in the next 12 months,“ commented Jennifer.
“While this is still below the global average of 23 percent who see a recovery coming in the next 12 months, it is an increase on our October 2008 results. The Nielsen Consumer Confidence data becomes yet another datapoint - along with retail sales gains in Jan and Feb, stock market advances in March, improving housing conditions and loosening up of the credit market - to show we may have turned a corner. Critical to a recovery is a change in sentiment, and there is evidence to support this trend as companies plan for a recovery,” added Jennifer.
According to the Nielsen survey, 77 percent of online consumers think their economy is in recession, compared to 63 percent who thought so six months ago.
Among global online consumers who believe they’re currently in recession, 52 percent said they were bracing themselves for a global recession to last 12 months or longer. “One in two consumers isn’t expecting any miracles for a quick rebound – steady but stable is probably the best approach they are hoping for,” said Jennifer.
While global consumer confidence plummeted to a new low, fears of unemployment and job uncertainly reached new heights. Job security was cited as the leading concern among internet consumers in 31 of 50 countries surveyed. Global concern for job security rose to 22 percent globally from nine percent in the latest round of the survey. “For the first time in this survey, job security has become a top concern in life,” said Jennifer.
Six months ago, global consumers cited the economy and work/life balance as their two top concerns in life - but consumers’ priorities have rapidly changed along with the economic deterioration,” said Jennifer. “With record global redundancies affecting every industry, the economy and job security have eclipsed all other concerns in life today,” said Jennifer.
During times of economic downturn, Taiwanese consumers ranked The Economy (50%) as their biggest concern followed by unemployment (33%) which was double of last year’s result. Consumers’ wages and pay packets have been stretched to the maximum like never before.
Saving for a rainy day remained on the top list for Taiwanese consumers utilizing their spare cash. Almost two-third claimed they would put into savings after covering essentials. Three in ten would invest in shares of stock / mutual funds, reached to all time low. One in ten said they had no spare cash after paying basic living expenses which reached to record high.
Uncertainty in the labour force also remains a worry for the near future. One in five (26%) global consumers described their job prospects in the next 12 months as bad compared with 17 percent in October 2008. Seventy-eight percent of Latvians said job prospects were bad for the next 12 months, along with 74 percent of Koreans, 60 percent of Japanese and 42 percent of British consumers.
Cutting down on out-of-home entertainment (62%), cutting down on holidays/short breaks (51%) and switching to cheaper grocery brands (50%) are the main actions for Taiwanese consumers in order to save on household expenses. Forty five percent would spend less on new clothes, forty four percent would delay upgrading technology and thirty seven percent said they’ve tried to save on gas and electricity.
About The Nielsen Global Online Consumer Survey
The Nielsen Global Online Consumer Survey, conducted by Nielsen Customized Research, was conducted from March 19 – April 2nd 2009 among 25,140 internet users in 50 markets from Eastern Europe, Western Europe, Asia Pacific, North America and the Middle East (Argentina (AR), Australia (AU), Austria (AT), Belgium (BE), Brazil (BZ), Canada (CA), Chile (CL), China (CN), Colombia (CO), Czech Republic (CZ), Denmark (DK), Estonia (EE), Finland (FI), France (FR), Germany (EG), Greece (GR), Hong Kong (HK), Hungary (HU), India (IN), Indonesia (ID), Ireland (IE), Israel (IL), Italy (IT), Japan (JP), Korea (KOR), Latvia (LV), Malaysia (MY), Mexico (MX), Netherlands (NL), New Zealand (NZ), Norway (NW), Pakistan (PK), Philippines (PH), Poland (PO), Portugal (PT), Russia (RU), Saudi Arabia, Singapore (SG), South Africa (ZA), Spain (ES), Sweden (SE), Switzerland (CH), Taiwan (TW), Thailand (TH), Turkey (TR), UAE (AE), United Kingdom (GB), US, Venezuela (VE) and Vietnam (VN).) The largest half-yearly survey of its kind, the Nielsen Global Online Consumer Confidence and Opinion Survey provides insight into current confidence levels, spending habits/intentions and the major concerns of consumers across the globe. 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 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
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