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Buying concerns

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.

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.

69%: increase
22%: remain same
9%: decrease

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%: unlikely
30% likely
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.

45%: unlikely
38%: not sure
17%: likely

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.

40%: unlikely
37%: unsure
23%: likely

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.

Branding
69%: strongly
24%: slightly
7%: not at all

Price
56%: strongly
34%: slightly
10%: not at all

Promotions
39%: strongly
45%: slightly
16%: not at all

Loyalty Cards
30%: strongly
37%: slightly
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
11%: transport
9%: investment
6%: others
5%: rent
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.

78%: Brazil
74%: USA
70%: France
69%: Russia
69%: China
64%: India
% 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.

1995
Necessities: 61%
Discretionary: 39%

2005
Necessities: 48%
Discretionary: 52%

2009
Necessities: 39%
Discretionary: 61%

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.

58%: Brazil
31%: India
30%: Russia
20%: France
18%: USA
18%: China

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.