Discretionary consumer spending falls: Credit Suisse

MUMBAI Thu Jan 31, 2013 8:46am IST

Indian shoppers check out products at a shopping mall in Noida, October 1, 2003. REUTERS/Kamal Kishore/Files

Indian shoppers check out products at a shopping mall in Noida, October 1, 2003.

Credit: Reuters/Kamal Kishore/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - Indians are cutting down on discretionary purchases like apparel, electronics and automobiles as consumer optimism in the country is on a decline, according to an emerging markets consumer survey report by Credit Suisse.

High inflation and slower growth continues to worry Indian consumers with more people expecting lower salary increases, said the survey, which interviewed 2,602 respondents across 10 cities and rural areas in India.

This is in sharp contrast with other fast-growing economies like Indonesia, where the increase in minimum wages is likely to keep consumer sentiment robust, and in China, where sentiment remains strong on the back of purchases by consumers from lower income groups, the report released on Wednesday said.

"There are signs of down trading in discretionary items in India. Fewer people are buying smartphones and more now want to buy an entry-level car," said Arnab Mitra, research analyst with Credit Suisse.

"More and more consumers are postponing big-ticket purchases.. This situation will take more than a couple of quarters to improve," he said.

Last week, investors knocked down shares of India's largest consumer company Hindustan Unilever (HLL.NS) by 5 percent after the it reported weak volume growth as consumers cut purchases of products such as packaged foods and personal care items.

The report, however, said the long-term growth potential in India remained intact due to low product penetration in most categories.

(Reporting by Nandita Bose; Editing by Sunil Nair)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

India-China Ties

REUTERS SHOWCASE

LIC on Markets

LIC on Markets

LIC chairman bullish on Indian markets  Full Article 

Infosys-Huawei

Infosys-Huawei

Infosys partners with China's Huawei for cloud-based services  Full Article 

Gold Outlook

Gold Outlook

Gold imports seen up, premiums likely to double on festive buying  Full Article 

Trade Dispute

Trade Dispute

U.S. to press India on trade row during Modi's Washington visit  Full Article 

Fed Policy Meet

Fed Policy Meet

Fed renews zero rate pledge, but hints at steeper rate hike path  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage