Do you feel confident enough to purchase a car or laptop or would you rather save because of the slowdown? We look at recent surveys to discern consumers' attitudes on spending.
I. Consumer Confidence Index
In the past one year, the index, which captures the sentiment on future spending, has slipped by 25%.
Jan '08: 100
Jul '08: 96.9
Dec '08: 81.8
Mar '09: 77.6
II. How will the expenditure on basic necessities be affected?
Rising food prices seem to have prompted the majority to believe that expenses will rise.
22%: remain same
III. Do you plan to buy white goods?
A third of the respondents plan to buy some consumer durable over the next six months prompted by attractive discounts on offer.
35%: not sure
IV. Do you plan to buy or build a house?
Respondents' plans to purchase a new home over the next 12 months is quite pessimistic due to the still high real estate costs and uncertain job market.
38%: not sure
V. Do you plan to own a vehicle?
Lower interest rates and launch of the world's cheapest car seem to have made little impact on the decision to own a vehicle over the next six months.
VI. Which factors influence your spending decisions?
Despite the need to cut costs, most respondents feel strongly about sticking to brands. Consumers also look forward to the right price and promotional offers in these times.
7%: not at all
10%: not at all
16%: not at all
33%: not at all
The above six data sets are part of the Boston Analytics Consumer Confidence Survey for March 2009 conducted among 10,000 respondents across 15 Indian cities.
I. How a family rupee is spent
Only about 15% (entertainment & others) is the share of discretionary expenses.
55%: basic necessities
11%: savings and investment
3%: loans and liabilities
The survey includes respondents from rural areas
II. Shoppers follow the 15-minute rule
People across the world, including India, do not travel long distances for regular shopping.
% of people who travel less than 15 minutes
III. Necessities vs discretionary items
Consumers' share of wallet is shifting from basic necessities to discretionary items.
IV. Shoppers who are open to credit
Among the surveyed countries, Indian consumers see shopping as an important activity and are the second most open to using credit for shopping.
Source: Indicus Analytics (1); McKinsey The Great Indian Bazaar survey (2,3,4); The above four data sets highlight the attitude to spending and broad consumer behaviour.
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