Nielsen predicts stronger consumer growth in 2012

Market research company Nielsen yesterday expressed optimistic views on 2012 economic progress in Sri Lanka, noting that rapid growth and consumer spending would be seen.

Nielsen, launching its 2012 Outlook, remarked upon the aggressively growing consumers who are moving towards lifestyle products that have now become essentials and engaging in impulse buying.

The company’s Managing Director in Sri Lanka Shaheen Cader told the gathering at the report launch that companies should work to leverage the growth momentum.

“Sri Lanka is slightly different from the rest of the world in that we see more growth in 2012. Our research has shown that there are many people evaluating their lifestyles and moving into more middle class lives. There is an emergence of a savvy rural consumer that companies need to consider,” he said.

Other key points found by Nielsen include the large-scale buying of vehicles with over 50% of households owning at least one vehicle. He noted that for every four motorcycles, a car is registered in Sri Lanka, showing a rapid growth. However, Nielsen warned that consumers were moving more towards borrowing for their spending and saving levels are remaining static.

“The saving rates have remained at 8%, but there is a clear growth in the credit card industry that has grown during 2011 and is likely to continue in 2012. There is also less consumer confidence in Sri Lanka when compared with countries like India, but we feel that is largely due to the attitude of the locals. It is clear from the spending that they have money but because it is used quickly, they may feel that their income is not enough.”

Over 1.5 million youth in the country are accessing the internet with increasing frequency and even older people who do not use computers serf via mobiles. This has prompted advertisers to consider mobile-based advertising which has greater reach, but Carder warned that innovation could take a long time.

Food prices remain the biggest concern in 2012, with people worried about inflation and the need to save for aspects such as children’s education. Goods such as electronic appliances are reaching near saturation points with nearly 100% of households in Sri Lanka having a TV. It is expected that the strong consumption will be carried on to 2012.