By Madelaine B. Miraflor
Purchasing confidence in the Philippines continue to drop when it comes to spending on fast moving consumer goods (FMCG), a study by Kantar Worldpanel showed.
Purchasing Konfidence, a quarterly study conducted by Kantar Worldpanel, tracks consumer confidence related to purchasing power of 3,000 Filipino homes in urban and rural areas across the country.
The latest data showed that Filipinos are more pessimistic when it comes to their shopping power and that they are purchasing less FMCG products, indicating a decline of shopping confidence now at -11.8 points as of the third quarter of 2017.
This, according to Kantar, is a “significant dip” from a confidence rating of 0.8 points in the same period in 2015.
“We are seeing a downward trend in the purchasing confidence of Filipinos. When we look at the quarterly data over the last two years we see that Filipinos are spending less on FMCG products. We expect the trend to continue in the last quarter of 2017,” said Lourdes Deocareza, Kantar Worldpanel New Business Development Head.
Purchasing Konfidence covers three components, namely purchase capability, willingness to purchase, and the actual purchase.
Purchasing capability refers to how Filipino consumers perceive price changes in the FMCG market vis-à-vis their financial situation for the time being as well as in the next 12 months.
Kantar research shows that Filipinos have assessed their household income to have gotten worse compared to the year before but are still optimistic that price increases will slowdown. From 32.1 points in September 2016, purchasing capability has dipped to 22.1 points as of September 2017.
The second component of the study is the Filipinos’ willingness to purchase, which looks at their decision to spend freely.
“Although majority of Filipino households hesitate when it comes to spending, there were some who felt that the third quarter of 2017 was the right time to make bigger FMCG purchases. However, overall data from Kantar Worldpanel still shows that Filipinos are not that willing to spend, with -36.0 points in September 2017 as compared to -33.6 points in September 2016,” Kantar said.
The final component that Kantar Worldpanel looks at is real purchase. This is the evolution of their spending on total FMCG and on the more non-necessities categories.
According to the company, more and more Filipino households are said to have spent less on FMCG. From -7.8 points in September 2016, Kantar Worldpanel research shows that actual spending declined to -16.5 points in September 2017.
“Based on our research, Filipinos are becoming more conscious of their spending, and brands must be able to position themselves to offer customers with more value for their money to encourage more spending,” Deocareza further said.