Pertinent national questions immediately arise: Does South Africa also witness these positive trends? How do our internet-using respondents fare in comparison to the rest of the world? And what can we conclude about local perceptions and confidence ratings?
ACNielsen's comprehensive survey provides the answers. Conducted in November 2005, the survey collected responses from 23 500 regular internet users in 42 countries including South Africa. Questions focused on gauging consumer sentiment and confidence in respective local economies, details on expenditure and shopping patterns, and major perceived concerns or threats.
The survey was able to track and compare instant, measurable results from all countries with a certain level of internet accessibility. ACNielsen's new methodology of web-based research is opening up previously unexplored avenues, on both a global and local front. Of course, in a South African context, responses mainly represent the country's higher income users (LSM's 7-10).
In May 2005, ACNielsen's Consumer Confidence Index presented a score of 92 as a global average. This figure had increased up to 98 by November of the same year, driven by two thirds of the countries surveyed, who had all seen improvement in their local results.
South Africa was one of the few countries to see a slight decline over this time. However, its results remain consistently higher than the global average in both reads, shifting from 104 points in May 2005 to 102 in November.
The country remains well ranked along the index, at position 17 out of 42. India retains its number 1 position from May, with a rating of 132. Portugal has slipped down below previously lowest ranking South Korea, and now takes bottom position at a consumer confidence level of 60.
Six months ago South African respondents were more optimistic than the average, regarding job prospects over the forthcoming year. This figure has reduced somewhat, now placing local job optimism at 43% in comparison to the world's 53%.
In stark contrast to this are local perceptions of personal finance. Despite more than half the country's current pessimism about jobs, 72% of our consumers are optimistic about their own financial situations for the year. This figure is dramatically higher than the global average of 59%, and has even increased over time.
Along similar lines, South African respondents believe that now is a good time to purchase goods, considering their own financial situations and the cost of items currently. This figure again is higher than the world's, at 44% compared to the average 39%.
In terms of country comparisons, India and New Zealand consistently rank as two of the highest scoring markets for job prospects, personal finances and current purchasing environment. Ireland and the UAE also look extremely positive on the job front, with Norway taking third most optimistic position on the personal finance list.
South Africans show a very different spending pattern to the rest of the world when it comes to the use of spare cash. Once consumers have paid off essential living expenses, the most common global trend is to put money away as savings.
Locally however, 52% of consumers use surplus cash flow to pay of debts, credit cards and loans. This figure has risen from 48% in May 2005, where it was already the primary way in which consumers used extra money. The second most common use of this money locally is to spend it on out of home entertainment, while savings continues to occupy third position.
Certain other countries show interesting extremes in terms of spare available money. In Russia for example, consumers spend more of their surplus cash on new clothes than on any other commodity; while no other country spends as high a percentage of extra cash on home improvements and redecorating as does Sweden.
Crime still ranks as a clear first in concerns that South African consumers have about the next 6 months. 27% of local respondents rate this concern as their primary one, in contrast to the global average of only 7%. On a worldwide level, economy and job security are the most prevalent threats in consumers' minds.
On a positive note, South Africa's fear of crime has decreased slightly: In May 2005, this factor ranked at 29%, coming down 2% into November 2005.
After South Africa, Argentina, Mexico and Brazil rank highly in rating crime as their first or second greatest concern. France has climbed from its low position in May, to come in at number 5 on the crime concern scale. This dramatic change bears witness to the speed with which such research reflects reality: The race riots in Paris, which took place from 5-7 November 2005 and caused the city to declare a state of emergency, evidently had a direct impact on consumers' fears and hence responses.
Two threats which apparently bother local higher LSM consumers very little, are terrorism and health. While many European countries rate terrorism as a prevalent concern, it is reassuring to note that South Africa scores amongst the lowest in the world on this front. Likewise, local internet-using respondents score third lowest in the world in terms of worrying about health. Of course, in lower income brackets, health becomes a more prevalent local threat, while terrorism remains relatively unimportant in the minds of all groups of South African consumers.
In conclusion, local consumers remain significantly more confident than the global average, although this figure dropped slightly from the first to the second half of 2005. This finding ties in with South Africans' positive attitudes towards their personal financial situations, thus showing their support of now being a good purchasing climate.
Strangely, the one aspect that doesn't fit with this picture is a somewhat negative attitude towards job prospects over the forthcoming year. This does not however appear to have dampened consumer spending patterns, which may well be related to increasing incidences of surplus money being spent on paying back debt.
Although crime remains our primary concern it is certainly positive to note the reduction in fear about this factor, and to firmly hope that its prevalence in our local society will continue to decrease with time.
