Whenever there is spare cash, shop till you drop. Sherine Nasr investigates Egyptian consumer trends Despite prevailing fears over a looming recession, during the last year Egyptians changed but little of their consumption habits, proving that they are big shoppers by nature. The Global Consumer Confidence Index, conducted by Nielsen, a global company concerned with marketing and consumer information and launched on Monday 6 June, revealed some interesting facts about consumer behaviour worldwide following the 2008-09 meltdown. Surprisingly, Saudi Arabia and Egypt showed the highest rates of increase in the level of consumer confidence, rising +29 and +24 respectively to register 108 and 95 in index points during Q1 of 2010 compared to 79 and 71 during Q3 of 2009. The global survey mined the opinion of 27,000 Internet consumers in 55 countries throughout the Asia Pacific, Europe, Latin America, and the Middle East and North Africa on the current economic outlook. The index is based on consumer confidence in the job market, the status of personal finances, and readiness to spend, among other things. According to Hany Mwafy, managing director of Nielsen in North Africa, consumer confidence rose in 41 countries out of 55 countries during Q1 of 2010. "Consumers have been encouraged to start spending again, so they drove the global index up to 92 points, which represents a six-point increase from six months ago," said Mwafy. The index average is 100 points. The result is particularly interesting as consumer confidence hit an all time low of 77 index points in early 2009 amid the near collapse of the international financial system. According to the index, India (127 index points), Indonesia (116 points) and Norway (115 points) have remained the world's most confident nations. "Conventional wisdom was that there would be a slow recovery, but Q1 of this year presented the first global show of force towards economic recovery," said Mwafy, adding that for the first time in two years, Nielsen's global consumer data provides evidence that economic prospects are improving. "This is a good sign for manufacturers and retailers who have been eagerly waiting for consumer spending intentions to turn into actual spending reality." According to the survey, a sense of optimism is now prevailing in the markets. Therefore, one in three consumers now plan to increase spending for out-of-home entertainment, to buy new clothes, and new technology. Moreover, 58 per cent of consumers globally now say that their countries are in recession compared to 77 per cent a year ago. Some 24 per cent of those consumers say they will be out of recession within the next 12 months. In Egypt, the survey reached 500 Internet users representing different age brackets and social classes. According to Bassel Adel, retail solution manager for North Africa at Nielsen, the survey focussed on consumer sentiment and confidence in the future of the economy, expenditure and saving patterns, and the major concerns of consumers. Investigating their perception of local job prospects over the next 12 months, 33 per cent of the sample believed there are good prospects compared to 35 per cent who said prospects are not so good. But who can surpass Egyptians in their love of purchasing new clothes and mobile phones? Consumers from the Middle East, Africa and Pakistan (MEAP) were surveyed for fields where they can spend their extra cash after covering their essential expenses. Egyptians came top of the list for buying new clothes (34 per cent, compared to 29 per cent and 26 per cent in United Arab Emirates -- UAE -- and Kingdom of Saudi Arabia -- KSA -- respectively). The same criterion goes for the purchase of new technology products (29 per cent in Egypt and Pakistan compared to 24 and 22 per cent in the UAE and KSA). Further, in spending on holidays and vacations, Egypt scored the highest (26 per cent, compared to 23, 22 and 20 per cent in UAE, KSA and Pakistan respectively). Similarly, in spending on out of home entertainment, Egyptians came to the fore, with 25 per cent compared to 21 and 19 per cent for the UAE and KSA respectively. Nonetheless, the surveyed sample cannot stand for the majority of Egyptians, 20 per cent of which live under the poverty line. "We made it clear that the survey concerns Internet users. This research does not account for those living under the poverty line. However, the survey is still a good means by which to estimate how Egyptians would spend spare cash," said Mwafy. Notably, Egyptians were not keen on saving their extra money (28 per cent compared to 56 per cent in UAE) or paying off debts, credit cards and loans (18 per cent compared to 43 and 39 per cent in South Africa and UAE). "The culture of using credit cards instead of cash is not yet very common among Egyptian consumers," commented Adel. Some 14 per cent of those surveyed in Egypt declared that they have no spare cash to spend after covering routine expenses. The major concerns of consumers include securing their jobs, the state of the economy, striking a balance between work and personal life, and the increasing cost of utility bills. Of these concerns, the biggest worries of Egyptian consumers are the means to balance work and personal life, and concerns over political stability.
