THAIs buck trend in consumer study

Thai consumer confidence has increased slightly from 87 to 89 over the last six months even as the Nielsen Global Consumer Confidence Index hit an alltime low of 84 since 2006.

Conducted in the midst of the global financial crisis, the latest survey reveals that global con¬sumer confidence has taken a fur¬ther beating, dropping from its peak of 99 in 2006 to 84 now.

Of the 52 markets surveyed, 43 (or 82 per cent) have record¬ed a decline in the consumer confidence index from the first half of 2008. The consumer senti¬ment is gloomy globally, with 62 per cent thinking local job prospects are not looking good and more than twothirds not considering the next 12 months a good time to spend.

However, the consumers in fast developing economies appear to be more optimistic, as evidenced by the responses in the BRIC markets. India tops the world as the most optimistic, Brazil and China saw an increase in their index and Russia ranked as the 5th most optimistic. All the BRIC economies figured among the top 10 most optimistic coun¬tries.

"In the growing economies of BRIC countries, many products and services continue to post strong double digit growth and consumer spending has not been affected to the same extent as in the western economies," said Chantira Luesakul, managing director of The Nielsen Company (Thailand) Ltd.

In the US, where the credit crunch originated, consumer confidence dropped further, with its index hitting a new low of 82, down from 100 in the same period last year. The majority of US consumers (86 per cent) think their country is in a recession and over half of those think the recession will linger for the next 12 months.

Eight out of 10 Thais think the country is currently in recession and around four in 10 do not believe the country will emerge from the recession in the next 12 months.

"On a positive note, over half of the people in Thailand remain quite optimistic about the state of their personal finances in the next 12 months and only five per cent of them said they had no spare cash," Chantira said.

When asked about their spending plans after covering essential living expenses, saving was again the top priority for 58 per cent of polled Thai consumers, followed by holidays or vacations (51 per cent) and retire¬ment fund (36 per cent).

Despite a more cautious spending sentiment, there are opportunities for companies in the leisure, retail and electronics and IT sectors, with spending options like holidays/vacations (51 per cent), home improvements and decorations (34 per cent), and new technology products (32 per cent) topping Thai shopping lists when they have spare cash.

Consumers have already started changing their spending patterns and shopping behaviour since last year.

lSave on gas and electricity (60%)

lSpend less on clothes (56%)

lUse car less often (49%)

lCut down on telephone expense (44%)

"Companies that continue to invest in their brands and products and stay constantly engaged with their target market will come out of this downturn as winners," Chantira said.