Consumer confidence in Pakistan saw an increase of eight points from the previous quarter by reaching an index score of 115 during the second quarter of 2018.
Despite being confident about their future job prospects and personal finances, consumers in Pakistan expressed an intent to hold on to their cash by cutting down on spending. This marks an interesting trend which on the one hand, highlights a higher level of consumer confidence compared to the previous quarter but on the other hand, reflects a cut down on major categories of spending.
The Conference Board® Global Consumer Confidence Survey (TCB Global CCI) findings highlighted that the improvement in consumer confidence from the first quarter of 2018 was majorly due to an increase in positivity about their job prospects, and personal finances.
The data revealed that despite being more positive about their future, consumers showed a more calculated and cautious approach towards spending across different categories, especially luxuries.
With 62% of consumers being optimistic about their job prospects (up 9% from Q1’18) and 70% feeling secure about their personal finances (up 4% from Q1’18), the general trend depicting the confidence level of consumers showed a positive inclination. However, contrary to an overall increase in the confidence level, consumers displayed a more restrained approach towards how they channel their spare cash by cutting down on discretionary spending such as new clothing (from 27% to 23%), home improvements (29% to 20%), holidays/vacations (22% to 17%), new technology products (21% to 18%) etc.
“The diverging drifts encompassing consumer confidence in Pakistan present opportunities as well as challenges for consumer-centric businesses. Although the consumers feel slightly more confident about their personal finances, yet they are also becoming more concerned about how they spend their extra cash. This is where the opportunities and challenges for businesses intersect. This calls for more value for money strategies by manufacturers and retailers to keep consumers buying”, said Quratulain Ibrahim, Managing Director for Pakistan, Nielsen.
She further added, “But in order to do so, they need to constantly look for areas of growth within these changing dynamics by planning their go-to-market strategies and innovating products and solutions accordingly. A relevant example is innovating products and solutions towards addressing consumers’ preference for convenience and products with healthy attributes at a premium price”.