2nd Quarter, 2011

Global Online Consumer Confidence, Concerns and Spending Intentions

A Nielsen Report July 2011

More consumers slip back to recessionary sentiment levels in second quarter

USA Consumer Confidence Drops Asia Pacific and Middle East/Africa Regions Suffer Declines, but Remain Most Optimistic Cash-Strapped Consumers Plan Further Cuts in All Discretionary Spending
The Nielsen Global Online Consumer Confidence Survey, established in 2005, tracks consumer confidence, major concerns and spending intentions among more than 31,000 Internet consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. In the latest round of the survey, conducted between May 20 and June 7, 2011, regions of the Middle East/Africa and Asia Pacific posted the steepest declines of 12 and nine points respectively compared to last quarter, but current figures are aligned with year-ago trends. And confidence levels in Europe (74) and Latin America (91) remained largely unchanged edging up one index point each. Despite its nine point dip, Asia Pacific remained the most optimistic region at 98 points, followed by Middle East/ Africa at 94 points.

Global online confidence declined to its lowest level in six quarters to 89 as economic recovery hit a stumbling block and recessionary jitters again reverberated around the world, according to Nielsens quarterly Global Online Consumer Confidence Survey. There wasnt enough positive news to inspire confidence among global online consumers in the second quarter, said Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, a part of Nielsen. Weak economic figures, slowing manufacturing performance and inflation in Asia, an intensifying debt crisis in Europe and continuing political instability in the Middle East combined with rising household expenses in the U.S. have taken their toll on consumers fragile confidence. Hopes for full global recovery in the next 12 months substantially weakened in Q2 as the majority of consumers around the world remained in a recessionary mindset.

Copyright 2011 The Nielsen Company.

Recessionary Mindset
Second quarter data revealed that consumers have retreated back into a recessionary mindset and they are tightening their belts again after the last 12 months of slowly improving, but cautious spending, said Dr. Bala. According to the latest survey, consumer allocation intentions declined globally in all discretionary areas from investing in stocks and buying clothes to taking holidays and upgrading technology compared to three months ago. For the outlook to improve for the rest of the year, consumers globally will look to greater stability in food and energy prices, as has begun to occur recently, along with abatement of region-specific concerns. In another indication of how consumers are prolonging the recession sentiment, 58 percent of global online consumers said they are still in a recession the most in the past year. Of those, more than half (51%) believe they will still be in a recession in a years time. The number of Asia Pacific online respondents who said they are currently in recession rose from 37 percent in Q1 2011 to 45 percent in Q2. And in Middle East/Africa, the economic recession lives on for 74 percent of online respondents an increase of nine points from three months ago.

45%

47%

32%

35%

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34%

29%

29%

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28%

22%

26%

19% 51% 31% 50% 17% 29% 16%

21%

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15%

9%

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Copyright 2011 The Nielsen Company.

Spending Intentions Decline

Twelve months ago, 35 percent of global online consumers said the present was a good time to buy the things wanted and needed, but this figure dropped to 27 percent in second quarter with significant pull back among North American and Asia Pacific consumers. At the start of this year, 27 percent of North American consumers said it was a good time to buy, but this receded to 20 percent last quarter. Likewise, one year ago, 40 percent of Asia Pacific consumers felt it was a good time to buy things needed and wanted, but this figure fell to 32 percent in Q2. More consumers globally are feeling cash strapped as cost of living expenses and rising food and energy inflation continue to squeeze household budgets. Rising food prices was again consumers top global concern, surpassing the economy as the top concern for the second quarter in a row. Thirty-one percent of U.S. consumers said they have no spare cash for discretionary spending, along with 25 percent of Middle East/Africa consumers and 22 percent of Europeans.

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8% 7% 6% 6% 3%

8% 7% 6% 5% 4%

Copyright 2011 The Nielsen Company.

U.S. Consumer Confidence Drops

Consumer confidence in the U.S. fell five index points to 78, two points lower than the previous consumer confidence low of 80 points in the first half of 2009 at the height of the global recession. Canadas consumer confidence index holds steady at 101, dropping just one point from year ago and previous quarter findings. With rapidly rising gas prices, inflationary pressures at check-out, continued woes in the housing market with home foreclosures and declining property values, unsettling weather patterns creating flooding and tornado damage and a stagnant job market, confidence among U.S. consumers fell in the second quarter, said Todd Hale, SVP Consumer & Shopper Insights, Nielsen U.S. On the U.S. retail front, the top 20 percent of households have exited the recession, while all other households are showing continued restraint in shopping trips and spending, continued Hale. Consumer-packaged-goods dollar sales were off 0.4 percent for the 52-weeks ending June 11, 2011, while dollar sales for the latest quarter within that 52-week period were up 0.5 percent the second consecutive quarter of at least modest growth.

Copyright 2011 The Nielsen Company.

Slowdown Impacts Outlook, But Asians Remain Optimistic

Indian consumers (126 index), despite a five point quarterly decline, remained the most positive about job prospects and personal finances and have consistently reported the highest consumer confidence scores since Nielsen consumer confidence tracking began in 2005. A host of factors are weighing heavily on the Indian consumers mind. While still clearly the most optimistic across the globe, heated price inflation, fuel price hikes and an uncertain global economy are acting as constraints to a buoyant outlook, said Justin Sargent, Managing Director, Nielsen India. We are likely to see adjustments to the purchase basket in terms of greater value-consciousness guided by robust demand, but a large pull back in terms of overall spending is unlikely unless inflation continues unabated. Eight out of 14 Asia Pacific markets posted quarterly declines in Q2 with steepest declines from Australia (-7 points) and Singapore (-6 points). Australias index has been on the decline since Q3 2010. Australian households are being hit hard with unrelenting price increases across the board. From July 1, households will be hit by one of the biggest rises in the cost of living in decades utility bills. These are set to soar with electricity, water and gas prices all increasing, said Chris Percy, Managing Director, Nielsen Pacific. And the January floods, which restricted supplies of fruit and vegetables, had lingering effects on produce costs, causing food prices to rise. Belt-tightening is the norm for many households as price increases erode family budgets. Malaysia (110), New Zealand (97), Philippines (115) and South Korea (52) posted quarterly confidence increases and Hong Kong (107) remained flat. Chinas consumer confidence declined three points quarterly to 105 and is four points off its year ago index of 109. The slight drop in consumer confidence in China is reflective of inflation, which is still a top-of-mind issue for consumers. While inflation has continued to creep up in the last three months, there arent any signs of slowdown in consumption even in discretionary categories, as observed in the second quarter of 2011. The continued strength in domestic consumption is a reflection of continued overall optimism in the economy, driven by growth in income levels, said Karthik Rao, Managing Director, Nielsen Greater China.

22% 27% 7 48% 37% 13% 3 52% 35% 29% 9 44% 27% 15% 18% 16% 30% 39% 8%

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Copyright 2011 The Nielsen Company.

Middle East/Africa Region Confidence Declines

Largest confidence declines in Q2 were recorded in Egypt (-10) and Saudi Arabia (-11), which had enjoyed the biggest increases in Q1 2011, but are trending consistently with year-ago performances. In Egypt, post-revolution optimism subsided and was replaced by a more realistic view of the country situation and a higher awareness of the economical aspect of the after revolution period, said Ram Mohan Rao, Managing Director, Nielsen Egypt. The Saudi consumer confidence index stabilizes to the levels of Q4 2010 after showing an 11 point increase in Q1 2011. Despite the dip, the Saudi consumers continue to be one of the top 10 most optimistic consumers across the globe. In Saudi Arabia, the Q1 surge in optimism caused by the additional cash injected into the market by King Abdullah was toned down as consumers were also hit by increasing food and rental inflation as a result of more liquidity in the market, said Arslan Ashraf, Managing Director, Nielsen Saudi Arabia. The package created a lot of positivity where people became more optimistic about the job prospects as well as their personal finances. The dip in Saudi Arabia confidence is also a result of decreased confidence in the economy where almost twice the consumers have said that economy is their biggest concern over the next six months compared to the start of the year. Political instability has become less of a concern for Saudis since the fizzling out of the Day of Rage that was planned in the Kingdom on March 11. United Arab Emirates increased one index point from last quarter to 110 maintaining its 12 point jump from six months ago. South Africa (86) and Pakistan (88) show consistent quarterly performances, but are down slightly from year-ago trends.

16% 28% 8% 45% 5 45% 14% 4 50% 28% 8 44% 40% 29% 22% 5% 14% 24% 36% 18%

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Copyright 2011 The Nielsen Company.

Europes Increasing Utility Bills and Inflation are Top Concerns

Increasing utility bills and inflation again eclipsed the economy and job security as main concerns in Europe. Its the everyday challenges of paying household bills and feeding families that are keeping consumers in Europe awake and worrying at night. The region includes eight of the top 10 lowest consumer confidence scores in second quarter. In Greece, ongoing economic turmoil amid the escalating debt crisis and widespread domestic protests resulted in a further consumer confidence decline of four points in Q2 for the worlds most pessimistic country where confidence levels plummeted to a new low of 41 points. Turkey suffered the biggest decline in the region with a drop of six index points to a score of 77. The recent decline is mainly due to the anxious anticipation before the elections that took place on June 12. The tense environment, also supported by unrest caused by terrorism, affected the perception on political stability and confidence, said Paul Walker, Managing Director, Nielsen Turkey. German consumer confidence dropped four index points in Q2 to 88 due primarily to increasing prices and the fear of inflation hampered by the Greek crisis and the Fukushima effect, but the German economy continues to show a bold recovery. The German economy has now been growing strongly for more than one year. Unemployment rates are declining and job prospects are good, said Ivar Michaelsen, Managing Director, Nielsen Germany. Overall confidence is still above the last two years and we expect this to be a temporary decline only. Consumer confidence levels in Russia remain low, dropping to 82 points since the beginning of 2011. Low perceptions on the state of personal finances combined with rising living costs have resulted in reluctance by consumers to spend. Overall, consumers in Russia feel more optimistic on the macro environment as job prospects in the next six months are favorable compared to last quarter, said Dwight Watson, Nielsen Regional Managing Director, Russia & North-Eastern Europe. But growing prices and utility bills are reducing consumers expectations to increase future purchases as Russians continue to be weary on the strength of their disposable income, which continues to hold down overall consumer confidence levels. In a welcomed sign of some positive news, while still below the European average of 74, Frances eight point confidence boost from 61 to 69 points was a result of the economys one percent growth in Q1 the largest growth increase France experienced since Q2 2006. Frances economic growth spurt at the start of the year exceeded expectations and the government is bullish about a two percent growth by the end of the year. This confidence has rubbed off on French consumers where one in three (33%) in Q2 expect personal finances for the coming year to be good/excellent up from 25 percent in Q1 2011. Consumer confidence in the United Kingdom also spiked five points in Q2 to 72 with consumers optimistic spirits buoyed by the warmest spring weather in years, several public holidays and the royal wedding mania.

Copyright 2011 The Nielsen Company.

33% 27% 7 55% 41% 18% 8 62% 2 57% 40% 53% 40% 31% 22% 18% 35% 37% 12%

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Copyright 2011 The Nielsen Company.

Latin American Regional Confidence Rises One Point

Latin America consumer confidence edges up one index point to 91, driven by positive quarterly performances in Argentina, Brazil and Peru. Argentina increases five points to a score of 93 a level reported for three quarters straight in 2010. The growth is driven by consumers positive outlook in regard to their personal finances, which is aligned with a 3.5 percent rise in shopping basket consumption tracked by Nielsen. Peru, a new market added to the Nielsen Global Online Survey in Q2, delivers the highest index in the region with a score of 99. The study results show the macroeconomic boom that the country has experienced in the last few years. Nevertheless, there is clear uncertainty among consumers with the recent electoral outcome during Q2 2011, said Armando Uriegas, Country Manager, Nieslen Peru. The possibility of drastic economic and political changes has spurred some fear in the minds of Peruvians. Brazil increased one point to an index of 96 in second quarter and Mexico held steady at 80 for two quarters straight. Colombias drop of two points since last quarter to 89 is driven by several factors: a harsh winter, which led to an increase in food prices, a rise in interest rates and a nine percent drop in the Colombian stock market. Two additional Latin American markets were added in second quarter: Chile, which delivered a consumer confidence index of 91 and Venezuela, which scored an 85.

25% 13% 3 53% 50% 11% 42% 49% 9 47% 48% 33%

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Copyright 2011 The Nielsen Company.

-1 97 VIETNAM +2 97 NEW ZEALAND

+1 98 NORWAY

+4 99 DENMARK

*
-2
86 SOUTH AFRICA

99 PERU

-5 126 INDIA

88 PAKISTAN

+1 96 BRAZIL

-4 88 GERMANY

85 VENEZUELA

+3 64 IRELAND

+5 65 UKRAINE +2 43 -2 45

0 66 POLAND
-3 66 ESTONIA

-1 101 CANADA

-2 89 TAIWAN
-6 103 SINGAPORE

+5 115 PHILIPPINES

-1 95 ISRAEL

+1
81 FINLAND

-3 60
LITHUANIA

PORTUGAL

+3 42

HUNGARY

CROATIA

-4 112 INDONESIA

-3 94 AUSTRIA

-1 60 SPAIN
0

-4 41
GREECE

+ or - Change from Q1 2011 -3

GLOBAL AVERAGE

ROMANIA

+1 47

89

SOUTH KOREA

+1 52

+8 69 FRANCE

-2 89 COLOMBIA

80 MEXICO

0 57 LATVIA

-2 55 ITALY

* 55 JAPAN

+5 72
UNITED KINGDOM

-4
90 NETHERLANDS

-7 103 AUSTRALIA

-5
+5 93 ARGENTINA
+5 110 MALAYSIA
78 UNITED STATES

+1

-6
77 TURKEY

76
CZECH REPUBLIC

*
91 CHILE

-10 92 EGYPT
+1 110 UNITED ARAB EMIRATES -2 108 SWITZERLAND

-3 105 CHINA

+4 +1
92 SWEDEN 91 BELGIUM

-1
105 THAILAND

-11 107 SAUDI ARABIA

0 107 HONG KONG

Copyright 2011 The Nielsen Company.

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Country Abbreviations:
Argentina Australia Austria Belgium Brazil Canada China Chile Colombia Croatia Czech Republic Denmark Egypt Estonia Finland France Germany Greece Hong Kong Hungary India Indonesia Ireland

AR AU AT BE BR CA CN CL CO HR CZ DK EG EE FI FR DE GR HK HU IN ID IE

Israel Italy Japan Latvia Lithuania Malaysia Mexico Netherlands New Zealand Norway Pakistan Peru Philippines Poland Portugal Romania Russia Saudi Arabia Singapore South Africa Singapore South Africa South Korea

IL IT JP LV LT MY MX NL NZ NO PK PE PH PL PT RO RU SA SG SA SG ZA KO

Spain Sweden Switzerland Taiwan Thailand Turkey United Arab Emirates Great Britain Ukraine United States Venezuela Vietnam

ES SE CH TW TH TR AE GB UA US VE VN

Region Abbreviations:
AP EU LA MEAP NA

Asia Pacific Europe Latin America Middle East, Africa North America

About the Nielsen Global Online Survey

The Nielsen Global Online Survey was conducted between May 20 and June 7, 2011 and polled more than 31,000 consumers in 56 countries throughout Asia Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of 0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or 10M online population for survey inclusion. The Nielsen Global Online Survey, which includes the Global Online Consumer Confidence Survey, was established in 2005.

About Nielsen
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, please visit www.nielsen.com.

For more information visit www.nielsen.com

Copyright 2011 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service names are trademarks or registered trademarks of their respective companies. 11/3510

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