- Indian consumers are adopting cost-cutting behaviors such as shopping from retailers that deliver products for free or at a discount.
- Consumers also say they would only buy certain products if they are on sale or on sale. There is also a shift to
buy value and bulk purchases. - The report also says that urban Indian consumers have tasted luxury and are resisting a reduction in their luxury consumption.
- More than 80% are willing to pay more for a product that is sourced/sourced locally, or made from recycled, sustainable or environmentally friendly materials.
Indian consumer confidence still appears to be far from the post-pandemic revenge spending trend. After experiencing a year of high inflation, many Indians are struggling with the rising cost of living. In a PricewaterhouseCoopers survey, six in ten Indians, or 63%, said they are cutting back on non-essential spending.
About seven in ten Indians or 74% of them are concerned about their personal finances, according to PwC Global Consumer Insights Pulse Survey, which captured the views of 500 Indians in 12 metropolitan areas.
“In the current economic environment, where economic growth has slowed to 4.4% in the third quarter of 2022 from 6.3% in the previous quarter, with a consumer price index hovering around 6-7% for more than a year , impact on consumer confidence is clearly visible,” said the research report.
Shift to bulk and value purchases
Over the next six months, consumers plan to adopt a series of cost-cutting behaviors and one of them is
Ravi Kapoor, partner and leader – retail and consumer at PwC India said the continued financial stress in consumers’ lives will have a potential dampening effect on spending in the highly discretionary electronics and luxury categories.
Nearly 47% of Indian consumers say they will shop from retailers that deliver products for free or at a discount. And 45% also say they will only buy certain products if they are on sale or if there is a special offer.
Consumers also plan to shop at retailers that offer better value for money; they also want to buy in bulk, sign up for subscription services, switch to cheaper brands and even miss out on a product they use regularly, the survey found.
Even as they tighten, consumers are willing to spend a few extra dollars for sustainable products. More than 80% are willing to pay more for a product that is sourced/sourced locally, or made from recycled, sustainable, or environmentally friendly materials, or produced by a company with a reputation for ethical practices, according to the survey.
“Consumers will continue to demand world-class buying experiences across both physical and digital channels, with work for brands to reduce costs, improve availability and go local,” said Kapoor.
Online shopping to become hybrid
As more Indians switch to cost-cutting mode, they want to shop more online. About 61% of respondents said they plan to shop online more often in the next six months. However, higher delivery costs are now starting to pinch them, and many of them are now eager to travel the distance to pick up their purchase – switching to hybrid e-commerce.
“The use of hybrid e-commerce models such as ‘click and collect’, where people buy or select articles online and collect them in the store or at a central collection point, is also gaining popularity. About 42% of Indian consumers say they will increase their use of click-and-collect services in the next six months,” the report said.
In the lap of luxury
To help improve their stressed financial conditions, Indians plan to cut most on luxury/premium or designer products, as reported by 38% of Indians.
At the same time, the report also says that urban Indian consumers have tasted luxury and are resisting a reduction in their luxury consumption. Half of the respondents said luxury goods make them feel good about themselves, and a similar number also seem to prefer them because the product quality is better than that of a non-luxury good.
The need to want to keep up with the latest trends also drives people towards luxury – indicating a hunger for future spending.
After luxury, most Indians would like to spend less on virtual online activities (32%), consumer electronics (32%) and fashion products such as clothing and footwear (31%). Travel (30%) and errands (21%) had the least reported planned spending reductions – indicating that the trend of revenge travel is likely to continue, especially among GenZs and millennials.
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