Recent News and Events

March 2010
Revival is back for the Indian real estate market especially in Tier II & III

The country’s realty sector has witnessed a revival in the last few months driven by a significant increase in the level of construction activity of low-budget housing coupled with low home loan rates (as a result of stimulus packages announced by the government).

The Boston Analytics monthly survey on real estate sentiment points towards interesting tier-wise differences in sentiment related to the pace of construction activity and real estate prices.

Boston Analytics` Indian Savings and Investment Behavior Report contains data and commentary on savings/ investment and insurance plans of Indian consumers across 15 Indian cities and 13 different demographic groups across time.

Boston Analytics` Savings and Investment Behavior Report further reveals that among Tier I cities, Bengaluru, among Tier II cities, Nagpur and among Tier III cities and towns, Patna had the highest number of consumers who were willing to invest through mutual funds.

Data is analyzed along the above variables in terms of their appetite towards savings/investment and insurance as well as a number of factors that may influence such appetite during a particular phase of the business cycle such as, perceived inflation, perceived stock market performance, economic conditions, job security, etc.
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With industrial output expanding at the fastest pace in 22 months in August and GDP growth forecasts being revised with upward, there are signals that the economy has begun to recover. Data collected from monthly consumer surveys conducted by Boston Analytics indicates sentiment related to consumer spending has improved in the last few months. The Indian consumer appears to be slowly coming out of the frugal mindset that set in since the onset of the economic slowdown.

One thing is certain that the Indian consumer still remains cautious and may take a while before exhibiting spending patterns prior to the onset of the economic downturn. While spending on basic necessities is very strong, discretionary spending on items such as clothing, durables, cars, etc, remains weak. Retailers will have to continue with discounts, rewarding loyalty programs, and cross promotions to boost consumer spending.
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With almost all two wheeler companies reporting a growth in sales in October 2009, Boston Analytics` Vehicle Purchase Intentions Report reveals that such a trend is expected to continue for some more time. The major thrust in demand is coming from young males in the age group of 18–35 years who are mostly unmarried. Boston Analytics` "Purchase Intentions Reports" are based on a consumer survey that are carried out every month on close to 10,000 Indian consumers through face to face interviews asking about spending plans on various commodities and services over the next 6–12 months.

The optimism score measures the degree of optimism expressed by respondents about a particular issue, in this case in terms of purchase intentions. Optimism scores between 0 and 25 indicate that respondents are very pessimistic, 25 to 50 suggest pessimism, 50 to 75 signify optimism, and a score of 75 or more signifies extreme optimism.
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Pessimism surrounding vehicle purchase intentions registered a significant improvement between December 2008 and March 2009 foretelling an increase in auto sales within a six months time frame. Vehicle purchase sentiment data (likeliness of respondents to buy an automobile in the next six months) is tracked by Boston Analytics as part of its monthly Consumer Confidence Survey.

The Optimism score for respondents` vehicle purchase plans increased from 30 in December 2008 to 36.3 in March 2009. The improvement in vehicle purchase sentiment data was driven by a number of factors including lower auto loan rates and new launche s across categories. Improved sentiment translates into increased sales a few months later as corroborated by the recent increase in sales growth by auto manufacturers in India.
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The job market in India has been sending some mixed signals in recent months. The global recession has led to widespread job losses in export-oriented sectors such as gems, jewelry, textiles, and leather. Other sectors such as information technology, construction, aviation, financial services and real estate, which fuelled the rapid growth of the Indian economy, have also retrenched a significant percentage of their total work force.

However, at the same time, a strong and stable government at the centre has given a boost to business confidence. Companies appear optimistic about business conditions and are expecting domestic demand to grow. Sectors such as FMCG, food and beverages, banking, retail, energy, infrastructure, and pharmaceuticals have witnessed an upswing in hiring activity. Given these mixed signals, Here are differences in sentiment about different aspects of employment.
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Inflation has declined somewhat over the last two quarters providing greater room for interest rate cuts. From a policymaker's perspective, the emphasis has gradually shifted from combating inflation to propelling economic growth. Acknowledging the role that lower interest rates can play in economic recovery, the Reserve Bank of India (RBI) believes that there is room for banks to reduce their lending rates further and expand their credit.

Consumer sentiment data is derived from a survey of monthly survey targeting 10,000 respondents cross 15 cities across fifteen Indian cities - Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Ahmedabad, Chandigarh, Nagpur, Kochi, Jaipur, Lucknow, Bhubaneswar, Patna, and Vishakhapatnam. A stratified sampling process was adopted for this survey, with the strata based on the socio-economic conditions of the respondents in order to ensure a proper representation of the population. All data is collected via face-to-face interviews.
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The INR 500 crores (US $100 million) Indian energy and sports drink market is expected to double within the next two years. This market in India is still in its infancy with only 26% of those who have ever consumed a store bought non-alcoholic beverage having tried a sports or energy drink and only 9% drink energy and/or sports drinks regularly at the same time of day according to Boston Analytics' study of 8300 Indians across 15 cities. Mumbai, Delhi and Hyderabad are the largest centers of consumption for this segment, while Delhi has one of the lowest consumption rates.

There are clear brand leaders in this category, although even they have room for improvement according to consumers' ratings of their products on over 13 different product attributes.

Boston Analytics' report on energy and sports drinks has implications for those hoping to capitalize on the growth of this market and distinguish themselves in the increasingly crowded market place. Boston Analytics's study highlights the opportunities and challenges associated in this market with a particular look at differences by city, age and household income.
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Approximately 120 billion litres of beverages are consumed by Indians every year, but only 5% represent store-bought packaged beverages. The majority of Indian consumers (75%) still consume non-alcoholic store-bought beverages 'less than once a day', highlighting a large untapped market opportunity, particularly in the carbonated drinks and juice or juice-based markets (estimated to be worth $1.5 Billion and $.25 billion respectively). While consumption frequency decreases with age, it is found to increase with income levels, except in the top-most economic strata of society.

Health concerns remain the primary reason for not consuming non-alcoholic store-bought beverages at all. Yet of the 40+ brands covered in Boston Analytics' study, none held a definitive position in this regard either positively or negatively.
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Boston Analytics announces is new webinar series, leading with a webinar on traditional trade in India. This free webinar is for all those who want to increase their CPG related sales in India, whether they be new market entrants or long established firms hoping to expand their market presence.

Over 90% of retail business in India is conducted through a diverse group of small independently owned "mom-and-pop" shops. This channel is known as traditional trade and includes all retail outlets with the exception of supermarkets, hypermarkets of superstores and retail chains.

In this webinar, leaders of Boston Analytics' Indian consumer practice will discuss the unique features of traditional trade in India, highlight the opportunities and challenges associated with penetrating this market and present a a number of case studies of CPG firms have successfully adapted their business models in order to sell the majority of their products via traditional trade.
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Overall inflation fell to a near 0% in mid-April due to lower year-over-year inflation in basic commodities, especially in minerals. Inflation within food prices continued to remain above 6% however, provoking a debate in the press about the important distinction between wholesale and retail price inflation. Boston Analytics survey data reveals that the decline in the Wholesale Price Index (WPI) has been accompanied by an improvement in consumer sentiment related to the price of retail goods and services in general (fall in the number of respondents reporting an increase in the prices of goods and services in general - see Exhibit 1). However, it is important to note that sentiment levels pertaining to current prices of goods and services in general remains pessimistic, implying that consumers continue to believe that retail prices are still too high.

Consumer sentiment data is derived from a survey of monthly survey targeting 10,000 respondents cross 15 cities across fifteen Indian cities-Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Ahmedabad, Chandigarh, Nagpur, Kochi, Jaipur, Lucknow, Bhubaneswar, Patna, and Vishakhapatnam.A stratified sampling process was adopted for this survey, with the strata based on the socio-economic conditions of the respondents in order to ensure a proper representation of the population. All data is collected via face-to-face interviews.
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As the global recession continues, Indian companies like others worldwide have had to restructure their organizations and curtail costs in order to stay in business. Across India there have been widespread job cuts, wage cuts, hiring freezes, and reductions in fringe benefits. The country's export oriented industries such as textiles and garments, leather and leather products, and gems and jewelry in particular have been hit as the demand for such 'made-in-India' goods have slumped amid the global recession. As a result, consumers' sentiments towards employment have been declining steadily over the past year signaling persistent weak employment conditions and a coupling between the Indian economy and economies in the western hemisphere.

Consumer confidence data is derived from a survey of monthly survey targeting 10,000 respondents cross 15 cities across fifteen Indian cities-Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Ahmedabad, Chandigarh, Nagpur, Kochi, Jaipur, Lucknow, Bhubaneswar, Patna, and Vishakhapatnam.
A stratified sampling process was adopted for this survey, with the strata based on the socio-economic conditions of the respondents in order to ensure a proper representation of the population. All data is collected via face-to-face interviews.
>> Read the complete announcement
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Consumer confidence has suffered significantly over the past 12 months in India. Data suggests however that the Government's efforts to ease the money supply and reduce interest rates may be beginning to make an impact in a few cities. In particular, respondents in Tier III cities seem to have reacted positively to lower interest rates by showing a slight drop in their pessimistic attitudes towards spending on big ticket items, such as, durables, vehicles, and houses.

Consumer confidence data is derived from a monthly survey targeting 10,000 respondents across 15 cities across fifteen Indian cities: Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Ahmedabad, Chandigarh, Nagpur, Kochi, Jaipur, Lucknow, Bhubaneswar, Patna, and Vishakhapatnam.
A stratified sampling process was adopted for this survey, with the strata based on the socio-economic conditions of the respondents in order to ensure a proper representation of the population. All data is collected via face-to-face interviews.
>> Read the complete announcement
>> See media coverage of Boston Analytics India Watch reports
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Boston Analytics announced the release of their security report for India titled "Security Preferences and Needs in India". The data for this report was gathered by interviewing 10,000 respondents across 15 cities.

Boston Analytics' data is derived from a monthly survey targeting 10,000 respondents across 15 cities across fifteen Indian cities: Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Ahmedabad, Chandigarh, Nagpur, Kochi, Jaipur, Lucknow, Bhubaneswar, Patna, and Vishakhapatnam. A stratified sampling process was adopted for this survey, with the strata based on the socio-economic conditions of the respondents in order to ensure a proper representation of the population. All data is collected via face-to-face interviews.
>> Read the complete announcement
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Today CNBC TV18 and Boston Analytics released the CNBC-TV18 Boston Analytics Consumer Confidence Index for April 2009. The index is designed to measure consumer confidence in India on a monthly basis. The index is derived from a monthly survey targeting nearly 10,000 respondents across fifteen Indian cities, which makes it the largest and most comprehensive exercise of this kind in the country. The index is a monthly barometer of the opinion of Indian consumers regarding the current state and future expectations of the macro economy, household financial conditions and consumption. The index is computed from responses to 25 questions covering various variables known to affect consumer confidence. These variables pertain to general economic conditions, employment, inflation, interest rates, real estate, household financial conditions, household income, household spending plans, and savings.

"Our April survey shows that the Indian consumer is expressing hope, at least in sentiment, that current economic stimulus along with promises of economic policy changes being made during the current election campaign may improve future economic conditions" said Dr. Sam Thomas, Ph.D., Director of Research and Development at Boston Analytics. "However, it is important to note that the bounce in the April reading is from very low levels of sentiment and driven by hope that the general economy will improve. The April reading does not yet indicate a change in trend regarding the personal circumstances of the consumer. In particular, the consumer remains significantly pessimistic about the job market and spending plans on durable goods. They also remain convinced that retail prices are still too high."
>> Read the complete announcement
>> See media coverage of Boston Analytics India Watch reports
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Today CNBC TV18 and Boston Analytics released the CNBC-TV18 Boston Analytics Consumer Confidence Index for April 2009. The index is designed to measure consumer confidence in India on a monthly basis. The index is derived from a monthly survey targeting nearly 10,000 respondents across fifteen Indian cities, which makes it the largest and most comprehensive exercise of this kind in the country. The index is a monthly barometer of the opinion of Indian consumers regarding the current state and future expectations of the macro economy, household financial conditions and consumption. The index is computed from responses to 25 questions covering various variables known to affect consumer confidence. These variables pertain to general economic conditions,employment, inflation, interest rates, real estate, household financial conditions, household income, household spending plans, and savings.

"Our April survey shows that the Indian consumer is expressing hope, at least in sentiment, that current economic stimulus along with promises of economic policy changes being made during the current election campaign may improve future economic conditions" said Dr. Sam Thomas, Ph.D., Director of Research and Development at Boston Analytics. "However, it is important to note that the bounce in the April reading is from very low levels of sentiment and driven by hope that the general economy will improve. The April reading does not yet indicate a change in trend regarding the personal circumstances of the consumer. In particular, the consumer remains significantly pessimistic about the job market and spending plans on durable goods. They also remain convinced that retail prices are still too high."
>> Read the complete announcement
>> See media coverage of Boston Analytics India Watch reports
>> Learn more about Boston Analytics India Watch

CNBC TV18 and Boston Analytics released the CNBC-TV18 Boston Analytics Consumer Confidence Index for March 2009. The index for March 2009 stood at 73.5, a fall of 5.6% from February '09 reading of 77.6. The index value for Mar '09 is the lowest since the inception of the index in Jan '08. The March survey sends reveals there is strong undercurrent of fear in the minds of the Indian consumer. Weakening optimism about economic and personal finance conditions and deepening pessimism about employment conditions seem to be the key reasons for the massive decline in sentiments.

The March reading continues to reflect a drop in consumer confidence in both current and future expectations of economic conditions. The primary negative drivers this month were declining confidence in household income, job security, and general economic conditions. In particular, consumers were gloomy about the state of the labor market and they expressed fear of further hardship to come. On a somewhat positive note, the consumer spending portion of the data does suggest that there is some early evidence that lower interest rates are beginning to make an impact in a few cities by improving the extreme pessimism in consumer spending plans that was observed there in prior months.
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Economic Conditions, Employment Conditions, Consumer Spending, pulling down the Overall Composite. Sentiment related to inflation has recorded significant rise in the past month

Boston Analytics released the Boston Analytics Consumer Sentiment Index (BACSI) for India for the month of December 2008. The BACSI, a monthly barometer of Indian consumer opinion regarding the current state and future expectations of the macro economy, household financial conditions and consumption, declined 3.2% for 81.8 in November 2008 to 79.2 in December 2008. The survey is now conducted across fourteen cities: Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru, Ahmedabad, Nagpur, Kochi, Lucknow, Jaipur, Chandigarh, Bhubaneswar, and Patna.

"The urban consumer in India continues to express significant concern about the future of the Indian economy," said Sam Thomas, Ph.D., Boston Analytics' director of research and development. "The primary drivers of the decline in consumer sentiment this month have been the decrease in consumer confidence about the current and expected states of the economy. Consumer sentiment appears to be building in momentum on the downside. This fear of continued weakness in the state of the general economy can turn self-fulfilling if monetary and fiscal authorities don't respond rapidly to them. In particular, there is a marked declining trend in consumer spending plans. The government should lay emphasis on stimulating growth to allay these fears in the future."
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