We’ve launched our Young People’s Consumer Confidence Index (YPCC) to help businesses understand what young people think about their current and future economic prospects, in developed and growth markets.
The survey, which will be repeated regularly to track trends overtime, covers 5,600 16-34 year olds across six countries and reveals stark differences about how confident 16-34 year old Britons and Americans are about the economy, personal finances, employment prospects and purchase intentions compared to their counterparts in the growth markets.
The results reveal that young Chinese consumers have the overall highest confidence levels, indexing at 39, closely followed by Brazil (38), Nigeria (37) India (32). In comparison, Britons index at just 10 and the US at 16, with young people in China at least 2.5 times more confident than the UK and US.
Young Americans are four times less optimistic about the future overall, than the Chinese. Americans are also five times less confident (10 vs. 53) about how the general economic situation will change in the next year and three times less confident (21 vs. 64) about their employment prospects (see Chart 1).
Although the Americans (44) feel more confident about their current personal/household financial situation than the Chinese (35), Americans are eight times less confident (24 vs. 3) about the current economy.
Seeing how much more upbeat they are than their American counterparts, one wonders just how aware young Chinese consumers really are about the months of successive slowdown in their economy. It’s a tough call whether this higher confidence speaks more about the faith they have in their government to get things back on track, or the depth of doom and gloom amongst the US ‘lost generation’ about their job prospects and the future economy.
Overall, young British consumers are five times less optimistic about the future than the four growth markets as a whole and Britons are 15 times less confident than the growth markets (4 vs. 57) about how the general economic situation will change in their own country over the next year. They are also three times less confident (21 vs. 64) about their employment prospects over that time (see Chart 1).
Brazilians are the most confident about both the future economic situation (72) and employment (76) followed by Nigerians (68 and 73, respectively).
The doom and gloom amongst the developed worlds ‘lost generation’ about their job prospects and the economy is in stark contrast to the unbridled optimism in the growth markets. Take Brazil, where this optimism could be shaped by the impact on the country’s infrastructure of hosting the world’s two biggest sporting events in the next four years – the World Cup and Olympics.
Consequently, there’s a real danger for the developed world that this cauldron of optimism fosters innovation and a drive to succeed that results in these markets overtaking the developed world as the place to be for investment, and that their economy grows to bright new levels as developed economies sinks back in the festering gloom.
The large disparity in economic confidence between developed and growth market consumers as a whole is reflected in their purchasing intentions. The growth markets index a massive 32 points higher in believing now is the right time to make big purchases such as electrical goods.
Young Nigerian and Indian consumers have the strongest belief that now is the right time to be making big purchases (indexing at 29) followed by Brazil (24) and China (22) – in contrast, young Britons index at minus six (-6) and Americans at (-2) See Chart 2.
The economic slowdown here means there is a fundamental need for businesses to target the growth markets in order to survive – not just increase profits. Their increasing wealth, confidence and education levels are creating a rise in demand for energy, technology and consumer products that simply no longer exists in the developed world.
Even as China’s economy continues a natural slowdown, the battle with the US as the dominant superpower still shifts in its favour. US businesses have already understood the need to target China and the growth markets in order to survive.
However, to exploit this opportunity successfully, western companies must understand the different business practices, regulations, infrastructure, cultural differences and population makeup. For example, growth market populations are much younger – around a quarter of Western Europeans are under 25 compared to over 60% in places such as Nigeria – which has a huge impact on the types of products in demand.
To ask your own questions: Sign up here
You can also watch Alistair Hill, our CEO present some of the earlier results and conclusions at the MRMW conference in Cincinnati (5mins in)