According to Thiago Moreira, director of Telecom for Nielsen in Brazil, the purpose of the research was to determine how much advertising agencies in these three important Latin American markets knew about mobile marketing and what kinds of campaigns they typically undertook.  “What we learned is that while mobile marketing is just emerging as a marketing discipline in all three countries, it is taking on very different characteristics in each of these markets, with Brazilian agencies being the most active in mobile marketing.”

Brazil

• 83 percent of agencies in Brazil believe that mobile marketing is a channel that can be better exploited.
• 62 percent of the agencies surveyed in Brazil launched mobile marketing campaigns in 2010, a figure that is expected to increase to 87 percent in 2011.
• Most mobile marketing initiatives in Brazil use multimedia with games and music and video downloads, and for 2011, 50 percent of campaigns will reach iPhones users alone.

Argentina

• 65 percent of agencies in Argentina believe that mobile marketing is a channel that can be better exploited.
• 43 percent of Argentinean agencies will develop mobile marketing campaigns in 2011 aimed at iPhone users
• The most used content within mobile campaigns: Product information and alerts, sales and offers (30%), games (26%) and music and video downloads (21%).

Mexico

• 59 percent of agencies in Mexico believe that mobile marketing is a channel that can be better exploited.
• 41 percent of agencies in Mexico are expected to direct their mobile campaigns to iPhone users
• The most-used content within mobile campaigns: Product information, alerts, sales and offers (32%), music and video downloads (27%) and games (20%).

With its political stability, economic development and improved income distribution, Brazil stands out among world economies – even among the other “BRIC” countries. It possesses an adequate energy supply, abundant raw materials and an absence of ethnic or territorial conflicts. So it should be no surprise that the retail sector posted solid growth of 5.7 percent in volume and 5.5 percent in value in 2010. But what might surprise some observers is that much of that growth is being driven by consumers in the lower socioeconomic levels (SELs).

Consumers from lower and middle SELs shop more frequently than others and contributed 65 percent of the total increase in Brazilian consumption. These groups – which combined make up about 59 percent of all consumers – are now playing an important role in the future of the economy.

These same consumers now have access to categories with greater added value and to brands with price positioning above the market average, all of which have become part of their shopping baskets. This has influenced the growth of several categories, through the different drivers mapped in 2010.

Brazilians are also more open to trying new products and different categories, thereby prompting new product uses and changing consumers’ habits.

To meet the demands of these consumers, manufacturers of fast moving consumer goods (FMCGs) stepped up their games in terms of product variety and innovation. Nielsen found that those factors, along with offering price and assertive distribution, formed the pillars of solid growth in 2010. The top 40 FMCG manufacturers have grown by 7.4 percent, with the top 10 contributing additional revenues of R$ 9.4 billion.

This growth has been achieved by understanding the dynamics of consumption, by taking strong action on growth drivers, and by focusing on innovation, launches and precision in execution. Manufacturers have become more assertive in their decisions and offer more affordable products to the low and middle classes. As Brazil’s economy continues to grow, we expect these trends to continue for the foreseeable future.

According to a Nielsen study conducted in nine countries (U.S., Germany, Spain, Italy, U.K., Brazil, Russia, China, India), Brazil ranks second behind Italy among the markets where multiple SIM cards are used among those aged 15–24. SIM (Subscriber Identity Module) is a portable memory chip that makes it easy to switch to a new mobile phone by simply sliding the SIM out of the old phone and into the new one. Ever since SIM cards started being used in place of the CDMA technology (Code Division Multiple Access), they became part of the new norm for young Brazilians.

Cost is Critical
With little or no dispensable income, it is not surprising that price is the primary purchase driver among one-third (31%) of young Brazilian consumers. Design and style ranks second and is important to one in five consumers and form/shape is essential for one in ten.

The overwhelming majority of young Brazilians (90%) prefer the prepaid mode of payment to the postpaid, ranking third behind Russia and India. Considering that more than half (56%) of Brazilian consumers aged 15–24 pay their own mobile phone bills, they are careful to not incur big overuse charges. Comparatively, only one in four consumers in the U.S. and Spain aged 15–24 pay for their own phones and only one in five young Italians do. About half of Russian (47%), British (52%) and German (56%) consumers pay for their own mobile phones as do one-third (35%) of Indian consumers.

Beyond Basics
With only 40 percent of young Brazilian consumers taking advantage of advance data services such as mobile Internet, instant messaging, email, ring tone, game or screen saver downloads, mobile service providers have an opportunity to expand usage of these services. In fact, only between five and seven percent of young Brazilians use any of these advanced data options currently.

Chinese youth lead the way ahead of the U.S. for advanced data usage, with mobile Internet the most popular among 73 percent and 48 percent respectively.

• For more insights, download Nielsen’s report: Mobile Youth Around the World

Asia Pacific

The Value-Conscious Consumer Rises in Asia
CNBC Asia Squawk Box interviewed Karthik Rao, Managing Director, Custom Research, The Nielsen Company to discuss spending intentions, concerns about inflation and the state of the economy in Asia. [Watch the Video]

Confident but Cautious: Asia Pacific Consumers Spend, But Seek Value
Consumer confidence in the Asia Pacific region gained six points year-on-year in the fourth quarter of 2010 to an index level of 97. With this jump, Asia Pacific became the second-most confident region in the world at the end of 2010, just behind Latin America. [read more about Asia Pacific Consumer Confidence]

Aussie Consumer Confidence Stumbles
In a reversal of fortune to the previous quarter, Aussie confidence ended 2010 with a slight drop as consumers looked to curb expenditure in the wake of rising utility and food costs. [download Australia's Consumer Confidence release]

Chinese Consumers’ Reluctance to Spend Weakens Confidence
China’s consumer confidence index fell four points to 100 at the end of 2010. Rural consumers’ confidence remained relativity stable while urban consumers’ confidence experienced a pull back. The primary driver behind this decline: inflation in consumer prices, particularly food. This, in turn, has led to a decrease in consumers’ willingness to spend money. The high price of homes and rising interest rates has also impacted spending.
[download China's Consumer Confidence release]

India Retains Top Spot on Global Consumer Confidence Index, but Inflation Affects Discretionary Spend for Some Categories
India has topped the consumer confidence survey in all four quarters of 2010 and has also seen a steady rise in index points. This is a good sign for India as this means that the economy is fast moving out of the slowdown. But global economic conditions have made Indians wary about the future and they are exercising some restraint in their spending habits. [download India's Consumer Confidence release]

92% of Japanese Say Job Prospects Are Not Good
Japan’s consumer confidence index of 54 ranked in the bottom four of 52 countries measured. A sense of stagnation is due to the economic recession and continued job insecurity, which remains regardless of the recent change in government. [download Japan's Consumer Confidence release - in Japanese]

Consumer Confidence in Malaysia Hits Four-Year High in Forth Quarter 2010
Malaysia ranked ninth globally in consumer confidence as consumers feel more positive about local job prospects and the state of their personal finances. Consumer confidence in Malaysia rose four points in December 2010 to 107, reaching its highest level since the third quarter of 2006. [download Malaysia's Consumer Confidence release]

Singapore Ranks Among Top 10 Most Confident Countries in the World
Singapore wrapped up 2010 on a positive note, posting a consumer confidence index of 109 in Q4 2010. The results reflected a 9-point jump year-on-year, as confidence in the country was boosted by strong economic growth, buoyant stock and property markets as well as a strong Singapore dollar. At 109 points, Singapore is the seventh most confident country our of 53 measured after India (131), Philippines (120), Norway (119), Indonesia (116), Australia (112), and Switzerland (110). [download Singapore's Consumer Confidence release]

Taiwanese Consumer Confidence Drops Slightly
While Taiwan’s consumer confidence dropped two points from 88 to 86 in fourth quarter 2010, the percentage of Taiwanese respondents believing that Taiwan is in an economic recession decreased from 59 percent to 51 percent. The drop is due to consumer’s pessimistic attitude about personal finance prospects and purchasing intentions.

Thai Consumer Confidence Rose 10 Points in Second Half of 2010
Thailand finished the year with a consumer confidence index of 102, which remained relatively high compared to the first half of the year. The second half of 2010 saw a strong rebound in consumer confidence in Thailand, underscoring the country’s resilience. Over the years Thai consumers have consistently demonstrated a great ability to bounce back from political challenges and serious threats from natural disasters. [download Singapore's Consumer Confidence release]

Europe

Consumer Confidence in Austria Continues to Rise
After rising nine points in the third quarter 2010, Austria’s consumer confidence index increases another two points to reach 96 – an historic high. Austrians showed improved job prospects, personal finances and readiness to spend. [download Austria's Consumer Confidence release - in German]

German Consumer Confidence Remains at a High Level
After hitting a high point in the third quarter 2010, German consumer confidence dipped four points in fourth quarter to an index of 83. However, it is at a high level in comparison to the European regional index of 79. [download Germany's Consumer Confidence release - in German]

More Than One in Four Great Britain Shoppers Have No Spare Cash – A New High
As pressures on personal budgets mount, the proportion of people saying they ‘have no spare cash’ was six percentage points higher at the end of 2010 than it had been a year earlier and the highest since the survey began in 2005. [download Great Britain's Consumer Confidence release]

Greece’s Consumer Confidence Falls to Historic Lows
Greece’s consumer confidence marked one of the bigger declines, leading to the country’s lowest historical drop. The index plunged nine points to a score of 48. Only Portugal and Croatia were lower, with an index of 45. One of the most concerning findings from the survey is that the overwhelming majority of Greeks (83%) do not think the country will emerge from the recession in 2011. [download Greece's Consumer Confidence release - in Greek]

Ireland’s Consumer Confidence Slips Once Again in Fourth Quarter 2010
Consumer confidence in Ireland fell in Q4 2010 following four consecutive quarters of growth and stabilization. While consumer confidence levels remained unchanged in Q3, the latest results do not bode well, showing that Irish consumers still maintain a level of gloominess. [download Ireland's Consumer Confidence release]

Scandinavian Consumers Are the Most Confident in Europe
The Scandinavian countries continue to top the European rankings for the most positive nations regarding their personal finances and their willingness to spend. The situation is different in Scandinavia, with Norway as the most optimistic country in Europe in regards to job prospects, personal finances and their ability to buy the things they want and need. Sweden and Denmark are close behind, even though consumer confidence declined in Denmark, driven by increased concern about job prospects. Consumers in Finland are far less optimistic. [download the Scandinavian Consumer Confidence release]

Spainish Unemployment and Job Security Are Main Concerns
Unemployment and job security continue to be main concerns for Spanish consumers and these factors greatly influence consumption. The crisis continues to force Spanish consumers to change consumption habits, something they have already been doing for months. Saving measures, such as reducing use of utilities and consolidating shopping trips will continue even when the economy improves. [download Spain's Consumer Confidence release - in Spanish]

Russian Consumer Confidence Recoils to Second Quarter Levels
Russian consumer confidence dropped two points in fourth quarter to an index of 88. Since the beginning of recession the index never rose higher than 90 points and fluctuated in the range of 86-90 points. Consumers in Russia have retained confidence in the job market and many believe in the stability of their personal financial situation. But with growing grocery and utilities prices, they now find themselves with less disposable income. [download Russia's Consumer Confidence release]

Switzerland’s Consumer Confidence Hits Historic High
Switzerland’s consumer confidence index of 110 rises 10 points from the previous quarter reaching an historic high. Switzerland’s results show a constant upward trend throughout 2010. Within one year, the index rose 25 points, which is not only the highest value in the past five years, but also the second highest in Europe. Only Norway’s confidence is higher in Europe. Worldwide, Switzerland ranks sixth. [download Switzerland's Consumer Confidence release - in German]

Latin America

Latin America is the Most Optimistic Region in the World
Latin America continued to show a consistent and strong performance at the end of 2010. Brazil finished the year with a consumer confidence index of 108 points, leading the growth in the region and occupying eighth place consumer confidence world-wide growth. The growing confidence of the Brazilian consumer is a reflection of several factors, among them is the positive performance of the Brazilian economy. Colombia and Argentina also finished the year strong with high index scores. In Mexico, a consumer confidence level of 86 points was the lowest in the region. [download Latin America's Consumer Confidence release - in Spanish]

Middle East / Africa

Consumer Confidence in South Africa Dipped 3 Points in Fourth Quarter 2010
While positive sentiment in South Africa drove confidence levels up in second and third quarter 2010, consumer confidence declined three index points to 84 in fourth quarter.  There simply hasn’t been enough consistent and positive news to sustain the euphoria consumers felt during the World Cup. The reversal of global consumer confidence in the fourth quarter highlighted the fragility and uncertainty of the global economy at the time, and above all, the divergence in pace of recovery among international markets and regions. [download South Africa's Consumer Confidence release]

United Arab Emirates Ranks in the Top 15 of Most Confident Countries
Consumer confidence in the UAE dropped four points from the third quarter of 2010 to 97 points in the fourth quarter of 2010, placing it in the top 15 of 52 countries measured.  UAE’s ranking fell out of the top ten most optimistic nations after being in top 10 consecutively for the last three quarters of 2010. The drop can be attributed to 14 countries ending the year with a consumer confidence index of 100 points or greater as compared to 11 countries who hit the 100+ index mark one year ago. UAE consumer sentiments have remained the same throughout 2010. [download UAE's Consumer Confidence release]

North America

Canadian Consumer Confidence Declines and Returns to Early 2010 Levels
More than half of Canadians still feel the country is in a recession and nearly one-third report they have no spare cash. While Canadian consumer confidence continues to decline, falling two index points to 99, Canada still ranks higher than many nations around the globe, including the United States. Canada’s highest Index score of 114 was recorded in 2006. [download Canada's Consumer Confidence release]

U.S. Consumer Confidence is Just One Index Point Away From its Lowest Level on Record
Forty-five percent of North Americans still expect the recession to last for another year, compared with 39 percent of Europeans and 19 percent of Asia Pacific consumers. The U.S. jobless rate remains at the heart of the issue for Americans. While the jobless rate dipped a meager 0.3 points in December to 9.4 percent – its lowest level in 19 months – it has topped nine percent for 20 months straight, which is the longest streak on record.

• Download the Nielsen Global Consumer Confidence Index

Consumption is Growing
According to a study by Nielsen Brazil, the Northeast is recording the most consistent growth. In addition, the increase in consumption in the Northeast also outstrips the average. While the region has grown by 8 percent, Brazil’s average consumption has risen by 6 percent in the product categories tracked by Nielsen. This growth is having very positive effects. Over the past two years, the number of low-income consumers has dropped three percentage points, from 67 to 64 percent.

On average, households in Northeastern Brazil have four to five members (43%), low incomes (64%), and consist of younger homemakers who tend to shop based on price and promotions. These households predominantly patronize traditional and wholesale channels.

Local Brands Dominate
Regional brands greatly stand out in the Northeast, exceeding national brands by double digit percentages in seven of the 12 categories Nielsen studied. In the first half of the year, regional brands of bottled water and powdered milk increased in volume by 39 and 21 percent, respectively, far outpacing the 8 and 2 percent growth rates recorded by national brands. While many of these products are manufactured by national or global companies, they are branded under names specific to the region to better fit the consumption profile there.

This growth phenomenon may also be attributed to manufacturers’ adaptation to the region’s needs through more competitive pricing (30 percent below the market’s average) and packages that prioritize cost rather than benefit. Manufacturers are investing in the pursuit of customers entering a new consumption phase.

Influencing Factors
Factors such as sophistication and indulgence are also starting to emerge and influence lower-income consumers. An example is the toilet paper category’s two-ply segment, which recorded a volume increase of approximately 40 percent compared to 2009, with the Northeast again standing out. In terms of indulgence, this shift is illustrated by sandwich cookies. In value, the biscuit category (wafers, Marie, salted, water crackers, etc.) increased by 4 percent compared to 2009, with sandwich cookies accounting for 59 percent of that growth.

These are good examples of how manufacturers are innovating to meet the needs – both economic and preferences – of a local population. And in Northeast Brazil, consumers are rewarding these brands with their business, proving once again that businesses have to intimately know who their customers are and how to appeal to them.

“Global consumers ended 2010 more pessimistic than at the start of last year. As the immediate economic and financial reality remained fragile and with the lack of positive indicators throughout 2010 consumers were given a harsh reality check that full recovery is still a long way off,” said Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, a part of The Nielsen Company. “The lingering impact of the great recession is further evidence of a new normal.”

The Nielsen Global Consumer Confidence Index at the end of 2010 remained unchanged from the previous quarter at 90 and finished the year two index points below the start of the year. Global consumer confidence in 2010 peaked in Q2 at 93 index points. Latin America was the world’s most optimistic region at 100 points (+6 points year on year), followed by Asia Pacific at 97 points (+6 points year-on-year). North America ended 2010 at 83 index points, (-2 year on year) and Europe was the world’s most pessimistic region at 78 index points (+2 year-on-year).

[click to enlarge]

Recessionary Woes Live On
“Global consumers – especially in the West, are bracing themselves for another year of flat to sluggish growth in 2011,” said Dr. Bala. “Job creation and employment numbers have fallen below expectation and even though many countries are officially out of recession, many consumers are still living – and expect to continue living – a cautious recessionary lifestyle which is restricting domestic spend and demand. Going forward, rising prices in several emerging markets such as China and India have to potential to dent consumer confidence and spending, especially if their respective governments decide to expand policy actions to combat higher inflation.”

Forty-five percent of North Americans still expect the recession to last for another year, compared with 39 percent of Europeans and 19 percent of Asia Pacific consumers. “The U.S. jobless rate remains at the heart of the issue for Americans,” said James Russo, Vice President, Global Consumer Insights at The Nielsen Company. “While the jobless rate dipped a meager 0.3 points in December to 9.4 percent – its lowest level in 19 months – it has topped nine percent for 20 months straight, which is the longest streak on record.” U.S. Consumer confidence in Q4 2010 held steady from last quarter at 81points, just one index point away from its lowest level on record in first half of 2009.

No Spare Cash
In the last six months of 2010, the number of consumers with no discretionary income rose from 22 percent to 31 percent in North America, from 16 percent to 20 percent in Europe and from 10 percent to 15 percent in Latin America. “Consumers in all regions are feeling the financial squeeze more than any other time during the global recession. In addition to concern for global and national economic issues, consumers are also struggling with rising daily costs such as food, utilities, petrol and transport prices. In Q4 2010, consumers found themselves with less disposable income than at any other time and the number of cash-strapped consumers globally peaked for two consecutive quarters at 14 percent – the highest number on record,” said Russo.

What to Watch
“Consumers have weathered the worst of the storm, but the pragmatic behavior prevalent in 2010 will continue into 2011 as headwinds to growth persist,” said Russo. “Coping strategies will represent a combination of essential and discretionary spending, where the focus will be saving on gas and utilities, reducing spend on grocery, take-out, clothing and entertainment expenses. For emerging countries, consumers are focused more on discretionary strategies, such as reducing phone costs and spending less take away meals. For developed markets, basic and essential strategies like reducing grocery spend will dominate.”

For more, download the complete report: Nielsen Global Consumer Confidence Index.

Well, that depends on the country. According to a series of surveys conducted in eight countries by The Nielsen Company, U.S. youth ages 20-24 are the most likely to say someone else is footing the bill, with only 45 percent saying they pay for their own service, compared to 88 percent of those in Russia and 84 percent of those in Germany. German teens ages 15-19 also rank high for saying they pay their own mobile charges, tied with those from Brazil. (Before despairing, parents of financially-dependent teens should note that the survey did not ask whether young people paid for these services out of an independent source of income or a parent-provided allowance.)

For more information on young people and their cellphones, download our new white paper on Mobile Youth Around the World.

Chile led the group when it came to ownership of home computers and Internet penetration.  Computer ownership was up five points from the previous year to 57% and Internet penetration hit 41%, an increase of six points.  The biggest jumps, however, came from Brazil, where more than half (51%) of households now own computers, up from just 26% the year before, and Internet penetration rose 13 points to 31%.

“Brazil’s economic growth is driving consumption across most sectors as consumers have more money to spend, so this rise is not so surprising,” said Roberto Vazquez Ferrero, Managing Director of the telecom practice at Nielsen Latin America.

Internet penetration in Colombia was up five points to 29% while in Mexico, it rose three points to 24%.

Televisions are now ubiquitous in the four countries, with 98% of homes owning them.  Colombia is far-and-away the leader when it comes to cable TV – 81% of households have subscriptions.  Half (51%) of Chilean households subscribe to cable.  Meanwhile, just one-quarter of Brazilian homes and one-third of Mexican homes have cable.

“The main barrier to cable penetration is the cost of service.  I would expect cable penetration to rise in Brazil in the near term.  In Mexico, there are many cable operators with differing services.  As they package them in ways that combine TV and Internet, such as the double and triple play packages, we could see greater penetration as competition leads to lower prices,” said Vazquez.

Source: The Nielsen Company

Notes: Internet penetration refers to households that are serviced. It excludes users who use it outside the home (e.g. internet cafes, offices, etc.). In Colombia, computer penetration includes only laptops, not desktops

The average price of smartphones dropped 2% in the first six months of the year compared to the same period in 2009 and by 5% versus 2008.

“The drop in the average price of smartphones has put them in the hands of more Brazilians, regardless of their income level.  In the small but rapidly growing smartphone universe, 15% are owned by consumers in the two lower income levels,” said Thiago Moreira, Regional Product Manager of The Nielsen Company’s Telecom Practice in Latin America.

One of the great attractions of smartphones is the variety of functions they offer.  Survey respondents said that cameras, FM tuners and MP3 players were the most sought after features.  Sales of phones featuring cameras increased 33% in the first half of the year, while those featuring FM tuners jumped 76%.  Sales of phones featuring MP3 players grew 74%, while those with GPS products went up 52%.

Looking to the future, smartphones featuring digital TV – which currently account for 2% of the category’s sales – will be the goal for many Brazilian consumers.  More than 50% said that they intend to have such a feature on their next mobile handset.

“With the increased interest in that feature from consumers at all income levels, the strategic segmentation of that market becomes key to carriers and manufacturers alike,” said Moreira.  “It is critical that they have a deeper understanding of the criteria and motivations Brazilians have for purchasing the phones they do.”

The Nielsen Company recently analyzed the demographics of Brazil, Chile, Colombia, Mexico and Puerto Rico, and estimates that people age 50+ currently make up 19% of the population.  But that number will rise to 26% by 2025 and 38% by 2050.  Households with mature housewives (who drive buying decisions in the home) account for 30% of the region’s populace.  In Puerto Rico, such households make up more than half (54%), while in Chile they represent 40%, in Colombia 35%, in Brazil 29% and 28% in Mexico.

Per Capita Spending Power
These older households – while being 13% smaller than the average home – have higher levels of per capita spending than other age groups:

• Chile: 17% higher
• Brazil: 15%
• Mexico: 15%
• Colombia:13%
• Puerto Rico: 12%

“In the next 10 to 12 years, one of every four consumers will be over age 50, and as in other countries around the world, older Latin Americans are defying the traditional stereotypes.  They are more affluent, spend more money and are open to new brands and products,” said Mary Paz Roman, Consumer Panel Services, Product Leadership Latin America at Nielsen.

Categories that currently attract a greater preference among more mature Latin Americans include hot and cold beverages, sweeteners/sugar, pet food and hair dyes and coloring, and retailers and manufacturers can expect increased popularity in years to come.  But other categories that could benefit – if manufacturers innovate and appeal specifically to this demographic – include a number of health and beauty segments such as shampoo, conditioners and deodorants.

“As competition for a greater share of consumers’ pesos, reals and dollars grows more intense, retailers and manufacturers should re-assess how they view this consumer group if they hope to seize the opportunities this new reality offers,” concluded Roman.