Around the world, consumers are displaying a strengthening sense of optimism about their financial wellbeing, particularly in developing markets throughout Asia Pacific, Africa, Middle East and Latin America, according to a new study by global measurement company, Nielsen.
Nielsen’s Changing Consumer Prosperity study, which tracks consumers’ sentiment toward their financial position and willingness to spend, found that 58% of consumers globally believe they are financially better off than they were five years ago.
Asia Pacific consumers are the most positive about their financial situation, with 70% feeling more optimistic than five years ago, followed by Africa and the Middle East (52%) and Latin America (49%).
Consumers in developed markets are less optimistic. Fewer than half of consumers in North America (46%) believe their financial standing has improved over the past five years, and just over one third of consumers in Europe (37%) feel financially better off than they did five years ago.
Asia Pacific constitutes seven of the top 10 markets with the most positive financial sentiment, with Colombia, Romania and Pakistan rounding out the top 10.
Markets in Central and Eastern European such as Hungary (up +21% vs 2016) recorded the biggest improvement in positive consumer sentiment followed by Poland, Bulgaria and Slovenia (up +14% vs 2016).
This Nielsen report reveals that globally 44% of consumers are spending more on groceries over the last five years. Africa and Middle East is leading with half (50%) of consumers spending more on groceries, followed by Latin America (47%), Asia Pacific (46%), Europe (39%) and North America (33%).
Other categories that are attracting increased consumer spending globally are tech communication, education, travel and health care.
Despite the strengthening in consumers’ sentiment around their finances, many are feeling the pressure of rising living costs. Globally, only 15% of consumers feel they are able to spend freely, while around one third (31%) say they are only able to cover their basic living costs.
“It’s interesting to note that while many consumers are feeling more financially stable than they did in the past, this isn’t necessarily translating to willingness or confidence to spend freely,” observes Pedro Manosalva, Retailer Services, Nielsen.
“Global market volatility and consumers’ perceived circumstances could be playing a role in their cautious approach to managing their finances and spending across categories. The retail landscape is undergoing a shift in many markets as consumers are adapting their spends on the basis of personal priorities and price points.”
For additional insights, download the Changing Consumer Prosperity report.