“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 were concerned, the recession had bottomed out. Three months later, they’re starting to embrace the idea of recovery – which is a major turning point,” said Jonathan Banks, Business Insights Director, The Nielsen Company.

In Nielsen’s latest survey, which polled 14,029 online consumers in 28 countries late in June, 71 percent of respondents thought their country was in recession – a positive reduction of six points from a high of 77 percent when the survey ran in March 2009.

“The BRIC and Asian markets have recorded the greatest jumps in Consumer Confidence Indices in the past three months,” noted Banks. “Consumer confidence in India jumped 13 Index points, and climbed 9 points in Japan, South Korea, Hong Kong and Indonesia. Consumer confidence rose 8 Index 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, with Germany the only country to register a decline of one Index point,” said Banks.

Even in the market registering a small decline – Germany – there are encouraging signs that a recovery is imminent. According to the Nielsen survey, nearly one in three Germans (29%) said the recession would be over in the next 12 months, compared to only 22 percent three months ago. One in three Germans also thought “now is a good time to buy the things they want”, indicating a renewed willingness to spend on discretionary items. Thirty-eight percent described their personal finances as “good” for the next year.

“This is one of the strongest indicators of a global consensus among consumers that the worst is over, and that finally, there is light at the end of this long tunnel. And consumers in emerging and Asian markets are clearly of the view that they are driving in the recovery lane now,” added Banks.
The latest Nielsen Confidence numbers are a welcome return to positive, confident territory for consumers in the developed Asian markets of South Korea, Taiwan and Japan, who have been battling economic inertia and political instability for several quarters.

“Asian consumer confidence appears to have been boosted through successful government economic stimulus packages that were speedily and effectively implemented at the onset of the global recession,” noted Banks. In the world’s second largest economy, the Japanese government implemented tax breaks, introduced cash deductions and subsidies on new car purchases, as well as providing cash payment and premium gift coupon schemes to stimulate spending.

“As well as expanding credit terms to small and medium sized businesses, in Japan there are even incentives to purchase eco-friendly household appliances as part of the government’s new environmental policy, and national toll prices for motorways have been discounted to encourage domestic tourism,” observed Banks.

Stock market gains in the BRIC and Asian markets have also had a major impact on consumer confidence,” said Banks. More than any other region, stock markets in Asia have rallied and property prices are starting to regain their pre-recession values. Russia’s stock market is up 60 percent from the start of the year and Taiwan is up over 50 percent. Brazil and Singapore’s stock markets have gained around 40 percent in the past six months and the South Korea and Hong Kong stock markets are up over 30 percent. With stock market gains so intrinsically linked to consumer confidence in Asian markets, it’s no surprise that Asian consumers are most confident about a receding recession, led by Hong Kong (-14 pts), Taiwan (-13 pts), Singapore and Japan (-12 pts), India and China (-10 pts).

“Positive economic news and growing consumer optimism in the past few months have definitely led consumers in these markets to believe that economic recovery will come sooner rather than later,” said Banks. According to the Nielsen survey conducted in March this year, 28 percent of Singaporeans said they expected their recession to end within 12 months – last month this number rose to 39 percent. UAE consumers also share this sentiment. In March, 32 percent of UAE consumers thought the recession would be over within a year but in June 43 percent said they expected the recession to be over before the middle of 2010.

Latest Nielsen data also shows that consumer confidence in the UK – a country that has suffered one of the most dramatic downturns in consumer confidence in the last year – is on the rebound, climbing 7 Index points in the second quarter. “UK consumers are getting the hang of consuming less. People with jobs – still the overwhelming majority – now have more disposable income as they reduce spending on big-ticket items like cars and holidays. With mortgage interest rates at their lowest levels, savings rates are increasing quickly and this has increased financial confidence,” said Banks.
“Consumers know that recovery won’t happen overnight but there has certainly been more good news than bad in the past few months,” noted Banks.

The decline in constant bad economic news in the media has directly impacted on the topics consumers are talking and blogging about. According to Nielsen Buzzmetrics, Nielsen’s service for measuring online conversations, the number of online discussions, or” buzz”, in the UK mentioning the word “recession” dropped around 60 percent between late March and late June this year. “People’s obsession with the recession has switched to how to live and spend more moderately in a new economic era,” said Banks.

Italian consumers have also become more optimistic, showing a strong gain of 7 Index points – their highest Nielsen Consumer Confidence Index since the second half of 2007. “Our survey supports recent Italian government figures which indicate that consumer confidence is returning to the Italian economy. In the last three months, Italian consumers’ concern for job security and the economy fell by 4 percentage points respectively, while average supermarket prices fell 0.2 percent in June 2009, indicating that consumers are less concerned about rising food bills than they were two years ago,” said Banks. The rise in consumer confidence in Italy has also been positively impacted by the government’s stimulus policies and the significant decline of negative economic coverage in the media. Online discussions mentioning the word “recession” have decreased by 35 percent this year according to Nielsen.

Globally, job security and the economy remained consumers’ top two concerns in life but even the level of these concerns has abated in the last three months and recorded declines of two and four index points respectively.

Most consumers said that they would continue to purchase non-prescription medications, although they may switch to cheaper products or use them less frequently. Americans, Germans and Scandinavians all indicated that they would be looking for less expensive products.

Overall, the survey highlights the importance of understanding local consumer needs, as regulatory, distribution and marketing framework vary greatly by country, and cultures have different approaches to what products they use and how they buy them.  Manufacturers that understand these nuances are better positioned to successfully ride out the recession and maintain some level of growth.

Read the full article about Nielsen’s landmark study of the global non-prescription medication market in the current edition of Consumer Insight.

The primary benefit of taking vitamins and supplements, according to more than 60 percent of those surveyed, was to boost the immune system, a response most common in Asia.  In the U.S., 62 percent of respondents said they took vitamins and supplements to ensure a balanced diet, a response only matched by Japan with 60 percent.

Regions where vitamin and supplement usage was lowest was Europe (30%) and Latin America (28%), with France and Spain bringing up the bottom with only 17 percent and 13 percent of consumers saying that they take vitamins and supplements. The primary reason for not taking vitamins was that their diets were already balanced and saw no need to take them. Interestingly, consumers in Poland, Russia and the Baltic states felt that “it is too difficult to understand which product to use,” suggesting an opportunity for marketers to refine their message in these markets.

By: Doug Anderson, EVP, Research & Development, Nielsen Consumer Panel Services

SUMMARY: Asians in the U.S. are often overlooked by marketers due to the tremendous growth of the Hispanic population. However, marketers will need to dig deep in order to reach this rapidly growing segment, who speak many different languages and have diverse cultural backgrounds as compared with the Hispanic consumer. While most Hispanics in the U.S. come from either Mexico or Latin America and share at least some parts of their culture, Asians do not. The strong cultural differences between persons from Japan, China, and India impact their tastes and how they approach their lives in the U.S.

Large scale immigration from Asia to the United States began with the gold rush of 1849, which spurred large numbers of Chinese immigrants and ended with The Chinese Exclusion Act of 1882. Most Chinese entered the country through the port of San Francisco, and because most came to be miners, the gender ratio of the Chinese population in the early U.S. was very male skewed, with over 20 men for every woman. Because the Exclusion Act stopped new immigration and because the vast majority of Chinese in the U.S. were men, Chinese society well into the 20th Century was essentially a bachelor society in which older men outnumbered younger ones.

A diverse group
Other Asian groups began to immigrate to the U.S. in the second half of the 20th Century, and today, persons of Asian origin or ethnicity make up 4.3% of total persons (3.7% of households are headed by a person of Asian origin or ethnicity). Unlike Hispanics in the U.S., the majority of whom are from Mexico or are of Mexican ancestry, Asians are more diverse geographically and hail from a long list of countries spanning nearly a third of the globe. Although the Chinese are still the largest subgroup, accounting for nearly one in four persons of Asian extraction, Asian Americans today are a very diverse population with no one language or dominant culture.

Affluent and educated
The most unique features of the Asian population in the U.S. are its levels of income and education. Asians have the highest incomes of any race/ethnic group, with over 45% of households earning incomes over $70,000. Less than 15% of Asian households have incomes less than $20,000, the lowest share of any group.

Levels of education for Asians are also quite high. Today, many Asian immigrants are young people coming to attend school. In fact, 35% of Asians who have been in the U.S. less than five years are enrolled in school, with the majority of those enrolled in either college or in a post-graduate program. Over two-thirds of Asian immigrants who have been in the country for more than 20 years have at least some college education, as do nearly 80% of those who speak English well. For comparison, only 39% of all non-Asian ancestry persons in the U.S. have at least some college. The larger Asian groups—Indians, Filipinos, and Japanese—have the highest levels of educational attainment, while Southeast Asians and Chinese have lower levels.

Higher levels of education position Asian immigrants and persons of Asian ancestry for better jobs than other race and ethnic groups, and of course, provide the higher income levels. Asians are very highly concentrated in computer and mathematical jobs, as well as those in the physical sciences—in engineering and finance—and in medicine.

Overall, the Asian population of the U.S. is younger than the non-Hispanic white population, though older than Hispanics. Because the fertility rates for Asian groups average nearly 25% lower than for Hispanics, only about 22% of Asians are under the age of 18, while children make up over a third of Hispanics. Asians are also less likely than the total population to be over the age of 65. Asian households are the most likely of any group to contain a married couple—over 60% (53% for white, 50% for Hispanic, and 29% for African American households). The level of divorce is also quite low among Asians relative to other race and ethnic groups.

Media savvy
Asian households are the most Internet-ready and High Definition (HD)-ready out of any ethnic group. According to Nielsen, as of May 2008, fully 85% of all Asian households have a PC with Internet access versus 73% of the Total U.S. Almost one-fourth (23%) of Asian households have at least one HD-capable/receivable television set.

Television usage, for Asian, African-American, and Hispanic households also vary greatly. In fact, Nielsen reports that in Asian households, Persons 18–49, view 42% less television on a total day basis as compared to Total U.S. (10.7 vs. 18.5). Conversely, Persons 18–49 in African American households view more television than Hispanic and Asian households during both Total Day and Prime dayparts. For Total Day, Persons 18–49 in African American households view 46% more television than Total U.S. (27.1 vs. 18.5). Hispanic Persons 18–49 view 9% less on a Total Day basis than Total U.S. (16.9 vs. 18.5).

Differences in the types of television programming Asians prefer reflect their intellectual tendencies as “Science Fiction” and “News” appear in the Top 10 for Persons 18–49 in Asian households, but neither program type appears in the Top 10 lists across white, Hispanic, African American or Total U.S. breaks.

Fresh and fit
Asians’ penchant for home-cooking meals and buying fresh ingredients is evident in their shopping baskets. Nielsen research shows that both canned and fresh fruit and meat products are popular items, indexing way above expected norms when compared with the average shopper.

And while it may be no surprise that Asians purchase significantly more “traditional” categories such as sake (dollar volume index of 843, where 100 is average), miscellaneous oriental foods (600), tea (408), oriental noodles (380) and rice (366) when compared with average shopping norms, Nielsen reports that categories such as female contraceptives index almost three times higher than average for Asians with an index of 282. By comparison, whites and Hispanics report an average index of 87 and 100, respectively, for the category, and African Americans index above average at 143. Good oral hygiene and skin care are also paramount—products such as toothbrushes, appliances and accessories, dental floss and skin cream all show higher than expected dollar volume activity.

Future growth
On a percentage basis, Asians are expected to grow almost as fast as Hispanics between now and 2050. The Pew Research Center projections show around 41 million Asians in the U.S. by 2050. Nearly all of this growth (94%) will come from immigrants who entered the country after 2005 and their U.S.-born descendants.

At this growth rate, Asians would account for over 9% of the Total U.S. population by 2050. Although this number is dwarfed by the expected incidence of Hispanics in 2050 (30%), it is essential to keep in mind that this is the expected average incidence across the entire country. Like many immigrant groups, Asians tend to be concentrated geographically—nearly 40% live in California, Oregon, and Washington states. The city of San Francisco is nearly one-third Asian today, and all of Santa Clara County (south of San Francisco and the heart of the Silicon Valley) is 30% Asian ancestry. If these areas continue to draw new Asian immigrants—and it seems quite reasonable to assume they will do so—then some cities on the West Coast of the U.S. will be majority Asian well before 2050, and many others will have Hispanic and Asians populations that combine to constitute the vast majority of residents.

In 1960, Asians made up only about 0.6% of the Total U.S. population, many concentrated in California. Growth has come almost entirely from immigration, but in the future we will start to see a higher share of growth coming from the children of immigrants and their children.

Asians and acculturation
Asian immigrants to the U.S. may not go through the same sort of acculturation process as Hispanics. Hispanics are much less likely to be enrolled in school, particularly post secondary school, and tend to take low-paid blue collar and service jobs, often either in Hispanic neighborhoods or in companies with a high share of Hispanic employees. Asians likely have, on average, better English skills when they enter the U.S., particularly writing skills, since they are often entering the country to attend college or graduate school. While in school they are exposed to a broader range of American culture than many Hispanics who come to the U.S. to work rather than attend school.

The differences for adults are the most striking. Less than 19% of Asian adults struggle with English compared to over 30% of Hispanic adults. Most children of both Asian and Hispanic immigrants are born in the U.S., and in general, have much better English language skills than their parents. The distributions of English language skills for children of Hispanic and Asian origin are nearly identical.

Marketing to Asians
Asians are expected to continue to grow rapidly as a share of U.S. population. Although they will likely continue to be ranked the third race or ethnic group by size (behind Hispanics and African Americans), they will make up a significant share of population over the next few decades. Like Hispanics, they will tend to be concentrated geographically, meaning that they already are a very significant share of the population in several major markets, and may come to dominate some larger cities. San Francisco and the surrounding areas could easily become majority Asian in the coming years.

Since Asians tend to have good English skills, language-specific marketing is less of a requirement for success as compared with Hispanics. However, Asian tastes are more different from U.S. norms than are those of Hispanics, which makes marketing to this segment more challenging. While most native U.S. shoppers dropped into a Hispanic grocery store would be at least familiar with most of the ingredients, the average American dropped into a Chinese, Korean, or Japanese market might not fare as well.

The fusion of Asian culture into the American mainstream will continue to gain importance and will increasingly gain focus from makers and sellers of consumer products, particularly in West Coast markets and those of the Northeast. New strategies that reflect Asian diversity and unique tastes will need to improve as this segment continues to grow in importance.

According to the Nielsen India Outbound Travel Monitor 2008, most international travelers from India are well-educated urbanites.  Countries in Asia — Singapore (24% of Indians), Dubai, Australia, and Malaysia (17% of Indians, respectively) — are the most popular destinations for India’s new travel elite. 

Overall, Asian destinations account for 72% of international leisure trips and 63% of business trips originating in India, Nielsen reported.  In comparison, travel to Europe accounts for just 18% of Indian travelers’ business trips and 14% of pleasure trips.

Of those Indians who travel internationally, 64% named sightseeing as the main purpose of their trip, while 47% reported they travel abroad to explore new countries.  Another 25% of those surveyed said they travel abroad to relieve stress, to have a good time, or to visit family and friends.

The Nielsen Indian Outbound Travel Monitor conducts face-to-face interviews with 2,000 men and women, ages 18 and older, who have traveled outside of India in the last twelve months.

View the full press release.

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